Two weeks to 11 December 2020
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
UK
Responding to the business impacts of COVID-19
Visit our global crisis centre webpage and our COVID-19 hub on TheSuite to continue to keep up to date with developments on this topic. Of particular relevance to multinational companies operating in the UK, navigate the global tax, legal and economic measures in response to COVID-19 by territory here. In relation to the UK:
- Debating the potential shift in the 2021 tax landscape and the impact on UK business
With the pandemic initiating the biggest upheaval for UK plc in modern times and the UK’s transition period coming to an end on 31 December, this combined impact will no doubt affect the tax landscape. Register here for our live virtual event on Wednesday 16 December at 12.30pm, where we will be reflecting on the challenges that tax departments have had to contend with in 2020 and looking ahead to the tax changes we may see in the expected March Budget and to other potential tax developments in 2021. - What impact has COVID-19 had on corporate tax filing?
Although Companies House has provided companies with a 3-month filing extension, HMRC does not have a formal process for permitting an extension to the statutory filing deadline for corporation tax returns. HMRC has, though, issued some guidance which indicates that where a delay in submitting a corporation tax return on time was due to the impact of coronavirus (COVID-19) this will qualify as a reasonable excuse for submitting the return late, subject to some considerations. The impact of a late filing, if not agreed in advance with HMRC, could nonetheless be more than just a £100 penalty. Read more. - Corporate interest restriction - reasonable excuse for late filing
Where a business has a filing deadline which it is unable to meet due to the impact of COVID-19, we recommend it proactively contacts HMRC to discuss their circumstances, as it may be possible to agree a deferral of the issue of late filing penalties. HMRC has recently set out its policy for agreeing such a deferral of late filing penalties for corporate interest restriction (CIR) returns. Read more.
Brexit
With the end of the transition period just over a couple of weeks away, make sure your business is ready for the expected changes.
- Government publishes Taxation (Post-transition Period) Bill
On 8 December 2020 the Government published the Taxation (Post-transition Period) Bill, which takes forward changes to our tax system to support the smooth continuation of business across the UK. It will ensure legislation required for VAT, customs and excise duties and processes to support the practical implementation of the Northern Ireland Protocol is in place by the end of the Transition Period. It will also implement further changes to the tax system which are required ahead of the end of the Transition Period, including the introduction of a new system for collecting VAT on cross-border goods.
Time running out for claims under the EU Arbitration Convention and EU Dispute Resolution Directive
We’ve previously highlighted the uncertainty surrounding the impact of the UK’s departure from the EU on access to EU-specific mechanisms for relieving double taxation arising in relation to transfer pricing adjustments. As this article explains, HMRC has now confirmed that those options will cease to be available unless a request has been submitted before 31 December 2020.
HMRC updates its Double Taxation Treaty Passport Scheme register
HMRC's Double Taxation Treaty Passport Scheme register shows details of companies registered for the Double Taxation Treaty Passport Scheme. It has recently been updated with 12 additions and 1 amendment. Read more.
Correspondence regarding mass-marketed tax avoidance
This HMRC correspondence provides an update regarding HMRC’s publications and activities on their ongoing work to tackle mass-marketed tax avoidance. This includes what they are doing to meet the commitment to be more transparent about what they know about the avoidance market, as recommended in the Treasury Select Committee’s Report on ‘Disputing Tax’.
Introducing PwC’s Digital Tax Academy
By bringing together our expertise in tax and learning and development, we are proud to present our Digital Tax Academy on Learning Lab. With clients going through a period of unprecedented business change and tax teams increasingly managing a high volume of complex changes to tax legislation, rules and regulations - we believe this solution can equip tax teams with the skills and knowledge to maximise their influence and impact on how tax is managed within your organisation. Read more.
EU
EU Direct Tax Group Newsletter - September/October 2020
Welcome to the latest EUDTG bimonthly newsletter, featuring summaries of all the relevant ECJ and national court cases and decisions, and EU policy initiatives related to EU direct tax law and state aid. Read more.
Time running out for claims under the EU Arbitration Convention and EU Dispute Resolution Directive
As noted above, we have previously highlighted the uncertainty surrounding the impact of the UK’s departure from the EU on access to EU-specific mechanisms for relieving double taxation arising in relation to transfer pricing adjustments. As this article explains, HMRC has now confirmed that those options will cease to be available unless a request has been submitted before 31 December 2020.
Relations with the UK: Commission proposes targeted contingency measures to prepare for possible “no-deal” scenario
See this European Commission press release of 10 December as there is now significant uncertainty whether a deal will be in place on 1 January 2021.
Member States agree on new tax transparency rules on digital platforms (DAC7)
The European Commission has welcomed the recent compromise reached by Member States to extend EU tax transparency rules to digital platforms, making sure that those who make money through the sale of goods or services on platforms also pay their fair share of tax. Read more in this European Commission press release.
The EU prepares for the end of LIBOR: the Commission welcomes the agreement reached between the European Parliament and the Council on financial benchmarks
The European Commission has welcomed the agreement reached by the European Parliament and the Council on important amendments to EU rules on financial benchmarks. The Commission proposed these amendments on 24 July 2020 to ensure that the EU's financial stability is not harmed when a widely used benchmark is phased out, as will soon be the case with the London Interbank Offered Rate (LIBOR). Read more in this European Commission press release.
CFE Tax Advisers Europe
- CFE Tax Top 5 – Round-up of EU Tax Policy News
The latest edition looks at the following: 1) CFE’s 13th European Professional Affairs Conference; 2) FISC Hearing on Harmful Tax Practices & Distortion of the Single Market; 3) OECD Tax Revenue Trend Report; 4) EU Council Conclusions on Tax Challenges; and 5) IAFEI Global 50th World Congress – 11 December 2020. View previous editions here. - CFE’s Global Tax Top 10 – November 2020
This month’s edition covers: 1) US President-Elect Joe Biden’s Tax Plans; 2) OECD Publishes Revised Action 13 Peer Review Methodology; 3) CFE European Register Webinar: DAC6 EU Mandatory Disclosure Rules – 3 December; 4) OECD Publishes Report on Taxing Digital Currencies; 5) G20 Summit: Stronger International Collaboration Needed; 6) Chile & Panama Deposit Instruments of Ratification for BEPS MLI; 7) Forum on Harmful Tax Practices 2020 Reviews; 8) IAFEI Global 50th World Congress – 11 December; 9) OECD Releases 2019 MAP Statistics; and 10) France Proceeds With Digital Tax Collection Despite Likely Tariff Retaliation.
OECD
Tax Administration 3.0: The Digital Transformation of Tax Administration
This discussion document by the Forum on Tax Administration (FTA) sets out a vision for the digital transformation of tax administration, under which taxation becomes more of a seamless and frictionless process over time. The intention of this discussion paper, requested by Commissioners at the 2019 OECD Forum on Tax Administration Plenary in Santiago, is to stimulate debate and conversation, both on the vision and its component building blocks.
Bahrain signs MLI
Bahrain has signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI), becoming the 95th jurisdiction to join the Convention, which now covers over 1,700 bilateral tax treaties. See here for the latest list of signatories and parties to the MLI.
OECD tax revenues fall slightly before the COVID-19 pandemic, but countries face much larger decreases ahead, particularly from consumption taxes
Tax revenues fell across the OECD for the first time in a decade during 2019, but a much larger decrease is expected in 2020 as the COVID-19 pandemic drives down economic activity and consumption tax revenues, according to new OECD research published recently.
Heads of tax administration agree global actions to meet the current economic and administrative challenges
Tax administrations are playing a critical role as governments deal with the economic recovery from COVID-19 following an unprecedented global crisis. Senior officials from the 53 members of the OECD Forum on Tax Administration, which includes all OECD and G20 members, agreed an ambitious agenda for the next year, focused on enhancing resilience and tax certainty as well as the digital transformation of tax administrations. Read more in this OECD item.
New OECD self-assessment tool to help jurisdictions tackle tax crimes
A new diagnostic tool will allow jurisdictions to self-assess their capabilities across a range of legal, strategic and operational areas to support their efforts to tackle tax crime effectively. Read more in this OECD item.
Global Forum delivers new toolkit and report
The Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum) has worked since 2014 to support its members in implementing the Automatic Exchange of Information Standard developed by the OECD (AEOI Standard). It concludes, in this new report, that the AEOI Standard has so far been satisfactorily implemented by countries worldwide. The Global Forum has now produced a Confidentiality and Information Security Management Toolkit, designed to ensure more developing countries can benefit from AEOI (see this OECD item).
Other territories
International
Coronavirus business updates
As noted above, we have summarised the reliefs and measures which are being put forward by global governments in response to the pandemic here (last updated on 11 December), as well as an overview of the back to work provisions being introduced.
Australia
ATO releases final guidance on cross-border related party interest-free loans
The Australian Taxation Office (ATO) has finalised its guidance on outbound interest-free loans between related parties. It takes the form of a new Schedule 3 to its Practical Compliance Guideline PCG 2017/4 on cross-border related party financing arrangements. The guidance in Schedule 3 has retrospective effect from 1 January 2020, applying to existing and newly created related party interest-free loans. Read more.
Temporary full expensing of depreciating assets
As part of the response to the widespread economic impact of COVID-19, the Federal Government announced in the 2020-21 Budget that it will allow a deduction for the full cost of certain depreciating assets acquired and used by eligible businesses. This measure, known as ‘temporary full expensing’, broadly applies to eligible assets acquired from 7.30pm AEDT on 6 October 2020 (2020 Budget time) and first used or installed by 30 June 2022. Read more in this PwC Tax Alert.
ATO finalises its view on taxation of natural resource income paid to non-residents
The Australian Taxation Office (ATO) has issued Taxation Ruling TR 2020/5 which considers the tax treatment of natural resources income which is derived by a non-resident and calculated by reference to the value or quantity of natural resources produced and/or sold (“override royalties”). Read more in this PwC Tax Alert.
Finalised ATO guidance on non-concessional MIT income
On 18 November 2020, the Australian Taxation Office issued its finalised guidance in the form of a Law Companion Ruling LCR 2020/2 (the Final LCR) on the concept of “non-concessional MIT income” (NCMI). NCMI fund payments made by a Managed Investment Trust (MIT) to non-residents from 1 July 2019 are subject to a withholding tax rate of 30 per cent unless transitional rules apply. See this PwC Tax Alert for our key observations in relation to the Final LCR.
Monthly tax update - December 2020
Welcome to the December edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.
Belgium
See here for latest updates.
New Royal Decree of 23 September 2020 extends obligations of the Belgian UBO register
On 1 October 2020, the Royal Decree of 23 September 2020 was published in the Belgian Official Gazette which amends the Royal Decree of 30 July 2018 on the operation of the UBO register. In addition to textual adjustments and technical corrections, the new Royal Decree introduces new (disclosure) obligations. From 11 October 2020, all companies, (international) non-profit organisations, foundations, trusts and legal entities comparable to trusts under Belgian law are required to upload in the UBO-register any document that supports and demonstrates the adequacy, accuracy and topicality of the registered data. Read more in this PwC Belgium news item.
Update COVID-19 and cross-border employment: agreements with France and Netherlands extended
We reported previously the extension until 31 December 2020 of the mutual agreements between Belgium, France and the Netherlands, which includes a “force majeure tolerance” for cross-border workers in relation to COVID-19 (travel) restrictions. With home working still mandatory and the default position for many employees in the near foreseeable future, a further extension of the Belgian-French and Belgian-Dutch mutual agreement has been announced until 31 March 2021.
Canada
2020 Federal Fall Economic Statement – Tax highlights
The Deputy Prime Minister and federal Minister of Finance, Chrystia Freeland, recently presented the 2020 Federal Fall Economic Statement. The economic statement does not change personal or corporate income tax rates, but does: 1) clarify proposed rules for the taxation of employee stock options, to be effective for stock options granted after 30 June 2021; 2) provide details for the Canada Emergency Wage Subsidy (CEWS), Canada Emergency Rent Subsidy (CERS) and Lockdown Support programs for 20 December 2020 to 13 March 2021; 3) announce a simplified home office tax deduction for 2020 for employees; and 4) require non-resident vendors supplying digital products or services to consumers in Canada to register for Goods and Services Tax/Harmonized Sales Tax (GST/HST), effective 1 July 2021. This Tax Insights discusses these and other tax initiatives proposed in the economic statement.
China
China’s State Taxation Administration publishes 2019 APA Annual Report
The State Taxation Administration recently published the “China Advance Pricing Arrangement Annual Report (2019)” (2019 Annual Report). The 2019 Annual Report contains statistical data and analysis of the advance pricing arrangement (APA) cases from 2005 to 2019. Read more.
Germany
WHT do you mean? A 95 year old German withholding tax on royalties
In this episode of his Cross-border tax talks series, Doug McHoney (PwC's US International Tax Services (ITS) Leader) discusses withholding taxation in Germany pursuant to Section 49 of Germany's tax code with Dr. Arne Schnitger (Head of PwC Germany's National Tax Office).
German Ministry of Finance proposes legal changes to increase the appeal of Germany as a fund holding jurisdiction
The German legislator joins other ongoing initiatives considering changes to the regulation of alternative investment funds at European level. Following the recent issue of draft legislation proposing simplifications to the German fund regime, the German Ministry of Finance is consulting with industry associations on possible improvements targeted at making Germany more attractive as a fund location. The improvement of the existing German fund regime is intended to result in overarching economic benefits for the German fund industry. Read more.
Higher penalties for organized tax evasion?
The representatives of the German provinces (the upper chamber of parliament – Bundesrat) would like higher penalties for organized tax evasion and further suggest improving the investigation of such crimes. On 27 November 2020 the upper chamber decided to introduce a corresponding bill in the German Bundestag to amend the German Fiscal Code. Read more in this PwC Germany tax blog.
RETT: Change of shareholders in real estate partnership
The Supreme Tax Court has granted a taxpayer’s appeal against a real estate transfer tax (RETT) assessment on the grounds that an indirect change in the shareholdings in the members of a real estate partnership was less than a complete change of interest in the partnership. With its decision the court has confirmed its case law regarding share transactions made prior to the enactment of the Tax Amendment Act 2015. Read more in this PwC Germany tax blog.
Retroactive financial integration in case of change in shareholding during the year?
A continuous and retroactive financial integration is also possible where a change in shareholder takes place during the year. The Lower Tax Court of Duesseldorf held that a fiscal unity or tax consolidation group for corporation income tax may be established already for the whole year in which the exchange of shares took place. In its judgement the court disagrees with the tax authorities’ official opinion on this issue. The Supreme Tax Court is now in charge and must finally decide the dispute. Read more in this PwC Germany tax blog.
Ireland
Revenue guidance on the Irish Real Estate Fund rules
The Irish Real Estate Fund (IREF) rules, originally introduced in Finance Act 2016, are very complex. They have been further complicated by an interest capping element contained in Finance Act 2019 (FA19). Revenue has now issued guidance notes to help businesses interpret them. These notes have been eagerly anticipated, particularly around the FA19 amendments. Read more in this PwC Ireland news item.
Italy
Italy reshapes format, contents, and requirements for transfer pricing documentation
The Italian Revenue Agency recently issued the long-awaited Act of the Director of the Revenue Agency no. 360494 (New Act). The New Act introduces significant and substantial changes to the rules related to the ‘appropriate’ Transfer Pricing documentation that must be prepared in order to support the application of the arm’s-length principle to intercompany transactions, and hence establishes the new requirements for opting-in the Italian penalty protection regime. Read more.
New guidance issued by the Italian tax authorities on carried interest instruments
With the ruling 565/2020, the Italian tax authorities express (again) their view on management incentive plans (“MIP”) based on the attribution of shares or financial instruments with enhanced economic rights (so-called carried interest instruments). In particular, the question submitted to the Italian tax authorities is related to the tax characterization of the income deriving from the holding of specific classes of shares (so-called, “Sweet Equity” and “Ordinary” shares) issued by a Luxembourg company and subscribed by an Italian manager of an Italian company belonging to the same group of the Issuer. Read more in this PwC Italy tax blog.
Middle East
Bahrain signs MLI
Bahrain has signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI), becoming the 95th jurisdiction to join the Convention, which now covers over 1,700 bilateral tax treaties. See here for the latest list of signatories and parties to the MLI.
Oman: Appointment of the Tax Grievance Committee members
In September 2020 a Royal Decree was issued amending certain provisions of the Income Tax Law (“ITL”). Those amendments included the formation of a Tax Grievance Committee (“TGC”). The Chairman of the Tax Authority has now appointed the Chairman, Deputy Chairman, and three members to the newly formed TGC. The formation of the TGC is part of government reforms witnessed in the Sultanate, with the aim of improving overall performance and efficiency of the Omani government. Read more in this PwC Middle East news item.
New Zealand
Tax Tips Alert: The new 39% tax rate: what happens now?
On Wednesday 2 December, the New Zealand Government introduced a new tax bill to Parliament under urgency, which proposes a 39% tax rate on individual income over $180,000. In this Tax Tips Alert, we discuss the implications of the new rate and what this means for you and your business.
Poland
Obligation to prepare and publish information on the execution of tax strategy
The Polish Parliament recently adopted a bill introducing changes to the Corporate Income Tax Law, Personal Income Tax Law and certain other acts, including an obligation to prepare and publish information on the execution of tax strategy. The bill has already been signed by the President and published in the Journal of Laws. The new regulation enters into force on 1 January 2021. Read more in this PwC Poland news item.
Revolutionary changes in the taxation of income of partners in partnerships
The Polish President has signed a bill introducing revolutionary changes to the Personal Income Tax Law and the Corporate Income Tax Law. It provides for, inter alia, changes in the taxation of partners of limited partnerships (spółka komandytowa) and selected general partnerships (spółka jawna), which are a consequence of taxation of limited partnerships and certain general partnerships with CIT. Read more in this PwC Poland news item.
Changes in taxation of gain on disposal of real estate-rich companies
On 28 November 2020, the President signed a bill introducing changes to a number of tax acts. See this PwC news item for a summary of key changes impacting real estate business in Poland.
Retail Sales Tax will come into force on 1 January 2021, according to the Ministry of Finance
Retail sales tax (RST) in Poland has been already formally introduced into the Polish legal system. However, due to court proceedings before the Court of Justice of the European Union, the Ministry of Finance has suspended RST. From a formal point of view, in case there will be no additional suspension, the retail tax will be due starting from 1 January 2021. Read more in this PwC Poland news item.
Russia
Is it correct to charge late payment interest on late payments where there are VAT arrears and overpaid corporate income tax?
The Russian Supreme Court overturned a decision made by the Russian Federal Tax Service Inspectorate on charging late payment interest on the late VAT payment, while the income tax was overpaid. The key message behind the Supreme Court’s decision is that the taxpayer acted in good faith and there was no underpayment of taxes due to the budget, and therefore, it was unlawful to charge late payment interest. Read more in this PwC Russia Tax Flash.
South Africa
Tax Synopsis - November/December 2020
This edition includes: 1) Unbundling transactions: latest amendments; 2) Employment tax COVID-19 chronicles: Employer-provided benefits – let’s get creative; 3) SARS letters of demand: what to do upon receipt thereof? and 4) SARS watch.
Spain
Spanish Draft 2021 Budget Bill: Preparing for the proposed tax measures in the real estate industry
The Spanish coalition Government recently approved the Draft 2021 Budget Bill. One key corporate tax provision is to reduce the participation exemption for dividends and capital gains to 95%. We analyse the corporate and individual tax measures included in this Bill and, in particular, those which may require action by investors in Spanish real estate to ensure that tax implications are effectively managed, here.
Tax residency analysis for dislocated individuals due to COVID19 not in line with OECD guidance
While the OECD Secretariat issued guidance on interpreting the tax implications of the COVID-19 crisis relating to dislocated cross-border workers, the Spanish Tax Authorities maintain their position of counting the days of physical presence in Spain, regardless of whether this presence has been caused by COVID-19. Read more.
Sweden
New economic employer concept implemented from 1 January 2021
The Swedish government has implemented the concept of ‘economic employer’ into Swedish tax law. Previously, Sweden applied a more formal employer concept. The new concept will particularly be applied when interpreting the so-called ‘183-days rule’ in tax treaties where Sweden is a contracting state. Read more.
Switzerland
COVID-19 webinar series
See here for upcoming and recorded webinars.
For the latest updates on current topics, see this PwC Switzerland Insights page.
Taiwan
Taiwan Tax Update - November 2020
In this edition: 1) Ministry of Economic Affairs announce draft amendment to Act for Development of Biotech and Pharmaceuticals Industry; 2) Ministry of Economic Affairs and Ministry of Finance announce amendment to regulations governing the application of tax credits for corporate or limited partnership R&D expenditures; and 3) Ministry of Finance announce Switzerland being added as one of the countries eligible for effective information exchange of Country-by-Country Report (“CbCR”) for fiscal years beginning after 1 January 2019.
US
Election 2020:
- Tracking the top policy issues at play and their business impact
While the US election outcome faces legal actions in several states, and control of the Senate is still undecided, businesses are nonetheless looking ahead to January when the 117th Congress will convene to certify the election results and likely put Democrat Joe Biden on course to take the oath on Inauguration Day. Visit our PwC US election web page to keep up to date with developments. - Post-election: What stands ahead for state and local tax
The November elections surprised many at the federal level, and the same is true at the state level: what was thought to be a possible ‘blue wave’ in the statehouses did not materialize. However, combined with significant tax ballot measures and continuing fiscal pressures due to COVID-19, these election results will influence state tax policy in 2020 and beyond. Read more. - The road after the election: Supply chain considerations in 2021 and beyond
With the Presidential election decided, the House retained by the Democrats, and control of the Senate still up in the air, many questions remain. Where should companies look for guidance regarding supply chain proposals? And what should they analyze? If Biden’s tax increase proposals are the ‘sticks’ that likely can be passed only if Democrats control both the House and Senate, then which proposals are the ‘carrots’ that might gain support from both Democrats and Republicans? Read more.
Final Section 163(j) regulations - an inbound perspective
Section 163(j), which was amended by the 2017 tax reform legislation and by the CARES Act, generally limits US business interest expense deductions to the sum of business interest income, 30% (or 50%, as applicable) of adjusted taxable income (ATI), and floor-plan financing interest for the tax year. The final regulations generally finalize proposed regulations published in November 2018 (2018 proposed regulations). This Insight describes key changes from the 2018 proposed regulations as these changes affect US inbound companies.
Treasury releases final and proposed PFIC regulations
Treasury and the IRS have released guidance under the passive foreign investment company (PFIC) regime in the form of two regulation packages: Final Regulations (which finalize the 2019 Proposed Regulations published 11 July 2019) under Sections 1291, 1297, and 1298; and new Proposed Regulations under Sections 250, 951A, 1291, 1297, and 1298. Broadly, these regulation packages address the attribution of PFIC stock to US investors, the determination of a foreign corporation’s PFIC status, and the application of the PFIC insurance and banking exceptions. Read more.
Final regulations revise Section 1031 real property definition
Section 1031 provides nonrecognition treatment for certain exchanges of like-kind property. The 2017 tax reform act (the Act) amended Section 1031, for exchanges completed after 31 December 2017, to limit non-recognition treatment to exchanges of real property. The IRS and Treasury have released final regulations defining ‘real property.’ The final regulations largely adopt the definitions in proposed regulations published in June 2020, with several significant changes. Read more in this PwC Tax Insights.
State tax considerations of the GILTI high-tax exclusion election
Final Treasury regulations published 23 July provide guidance related to taxpayers’ ability to exclude gross income from tested income of CFCs by reason of the high-tax election (HTE) under Section 951A. Income exempt from GILTI due to the HTE would not constitute previously taxed income (PTEP) federally and would be subject to tax if distributed were it not for the Section 245A exemption. State tax complications arise due to the different ways states conform to the Internal Revenue Code. Taxpayers may be surprised to be subject to state tax on income that is exempt for federal income tax purposes. Read more in this PwC Tax Insights.
California provides additional indirect tax relief to businesses
The California Department of Tax and Fee Administration (CDTFA) on 1 December announced that business owners needing financial assistance may receive immediate indirect tax relief in the form of automatic filing extensions, interest-free payment plans, or a hiring tax credit of up to $100,000 to offset income or sales and use taxes. Read more in this PwC Tax Insights.
California Proposition 19 limits protections for intrafamily property transfers
California voters last month approved Proposition 19 by a slim margin, making significant changes to the tax provisions governing transfers of a principal residence from parents to their children. These changes take effect on 16 February 2021, and could impact existing California property transfer planning by subjecting such transferred residences to property tax reassessment. Read more.
Chicago budget includes ‘cloud tax’ increase
The Chicago City Council has approved an increase to its personal property lease transaction tax as it applies to nonpossessory computer leases. Effective 1 January 2021, the tax rate applied to certain cloud services will increase from 7.25% to 9%, which is the rate generally applied to personal property leases. Especially in the current remote work environment, taxpayers should examine such use in their organizations to determine the appropriate sourcing of remote software access charges and file refund claims where supported by such analysis. Read more in this PwC Tax Insights.
Colorado and Alaska adopt centralized systems for local sales taxes
In the two years since the US Supreme Court decided Wayfair, some states have sought to simplify complex local sales and use tax requirements. Of those states, Colorado and Alaska in 2020 adopted centralized taxing and remittance systems to address challenges facing businesses subject to the taxes. Colorado partnered with third-party providers to create a new sales and use tax portal for companies to remit sales and use taxes to all participating jurisdictions. Alaska localities have joined a statewide intergovernmental agreement to administer sales and use tax functions. Read more in this PwC Tax Insights.
New York increases rate of MTA surcharge in 2021
The New York Department of Taxation and Finance announced that the rate of New York’s metropolitan transportation business tax surcharge will increase to 30%, effective for tax years beginning on or after 1 January 2021. Read more in this PwC Tax Insights.
Webcasts, blogs and podcasts:
- State Tax Outlook for 2021 and beyond
Join us on Tuesday, 15 December at 7pm for this webcast. Register here. - US Inbound Insights: US Economic, Policy and Tax Webcast
Join us on Wednesday, 16 December at 6pm for this webcast where our PwC panel share potential implications of the US elections on US operations of global companies headquartered outside the United States. Register here. - Are you prepared for the tax & accounting implications in the transition from LIBOR?
Register here for this webcast on Wednesday, 16 December at 6pm. - Tap into Tax
PwC’s new podcast series, Tap into Tax, combines perspectives from our tax technical specialists and our professionals focusing on the evolving tax function for a holistic look at tax. Listen to the latest episode:
Further episodes in this series are available here, as well as on Spotify and other streaming services.
- Cross-border tax talks
- WHT do you mean? A 95 year old German withholding tax on royalties
In this episode, Doug McHoney (PwC's US International Tax Services (ITS) Leader) and Dr. Arne Schnitger (Head of PwC Germany's National Tax Office) discuss withholding taxation in Germany pursuant to Section 49 of Germany's tax code. - Extension cord: The story of tax extenders
In this episode, Doug McHoney (PwC's US International Tax Services (ITS) Leader) and Rohit Kumar (Co-Leader of PwC's Washington National Tax Services practice) discuss the past, present, and future of tax extenders.
Previous episodes in this fabulous series of podcasts can be found here, as well as on Spotify, YouTube and other streaming services.
- Blog: R&D Tax Credits - Are you ready for what’s next?
One thing is certain about 2020, the ground beneath us is constantly shifting. Navigating these shifts can be challenging, but with the proper planning it can be rewarding. The question is are you ready to navigate this evolving landscape, capitalize on these opportunities and prepared to move when the time is right.
Replays:
A number of previous webcasts are available for replay in our US tax reform hub here, including:
- Tax Readiness: Q4 financial reporting considerations webcast
Register here to watch the recording of this webcast held on Wednesday, 9 December. - Election 2020: How tax leaders are navigating uncertainty
If you missed this webcast on Thursday, 3 December, you can watch the replay here. - PwC Pulse on Election webcast Part III
Now that the November 3 Election has passed, are you prepared for how potential policy and regulatory shifts may impact your business? This was recorded as an on-demand webcast. Register here to have the recording emailed to you to watch at your convenience. - Tax Readiness: Key highlights of the 2020 final and proposed foreign tax credit regulations
If you missed this webcast on Wednesday 21 October, you can watch the replay here. - Enhancing Tax function transparency
Watch the replay from this latest Tax Function of the Future webcast held on Tuesday 20 October. - PwC Pulse on Election 2020 Part II: Tracking policy and business issues
Watch this replay from our webcast held on 14 October for the results of the latest PwC Pulse survey, which will feature what’s on the minds of senior executives heading into this historic election and how businesses can prepare for potential impacts.
Other updates
For regular updates on this topic, check out our US tax reform hub on The Suite here.
Vietnam
The annual year end compliance? How ready are you?
In the past, many employers/employees already found year end reporting an inherently daunting task. This year, apart from the inherent challenges, there are added complexities due to COVID-19. As an employer and employee, how ready are you on reconciling data, deriving deductibles, and finalising year end reporting? Read more in this PwC Vietnam news brief.
