Two weeks to 11 June 2021
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:
- Government responds to Treasury Committee’s ‘Tax after Coronavirus’ report
The Treasury Committee published its report on Tax After Coronavirus on 1 March 2021 and has now published the UK Government’s response to the report, together with commentary on a number of points in the response. - Parent companies and their subsidiaries: The importance of legal structures and sound corporate governance in mitigating risk
As businesses consider post Covid-19 recovery planning and a transition back towards normality, directors and shareholders are assessing their corporate purpose, culture and strategy and how these are positioned throughout their business and supply-chains. Over time corporate group structures have developed and evolved. However one principle that had largely remained the same was the general presumption that parent companies are separate legal entities, with separate legal personalities to their subsidiaries. Therefore, the parent companies are not typically responsible for the debts or actions of these subsidiaries. However, the recent Supreme Court decision of Okpabi v Royal Dutch Shell plc [2021] UKSC 3 following the lead set in the earlier Supreme Court case of Vedanta Resources plc and another v Lungowe and others [2019] UKSC20 has gone some way to undermine this principle. Read more.
Finance Bill 2021
Finance Bill 2021 received Royal Assent on 10 June 2021.
G7 Finance Ministers agree historic global tax agreement
At a recent G7 Finance Ministers meeting in London, chaired by Chancellor Rishi Sunak, the G7 agreed to back an historic international agreement on global tax reform which delivers on the Chancellor’s promise for big international companies to start paying their fair share. Read more in our Tax Policy Alert.
Notification of uncertain tax treatment by large businesses - second consultation
As noted in our last edition, large businesses (corporates and partnerships) will be required to send a specific notification to HMRC if their tax returns contain an Uncertain Tax Treatment (‘UTT’) from May 2022. This new obligation will apply to the legal interpretation of Corporation Tax, Income Tax (including PAYE) and Value Added Tax legislation, for returns that are due to be filed with HMRC after April 2022 and the tax amount involved is more than £5m. This new obligation has been the subject of an HMRC consultation, which ran from 23 March 2021 to 1 June 2021. See the ICAEW's response.
Draft legislation is expected in Summer 2021, but (for corporation tax purposes) any accounting period that started after 2 May 2020 and ends on or after 1 May 2021 may be subject to this new regime. Transactions that have already taken place, or are planned in the next few months, will need to be considered in light of this new obligation. Read this flyer for more information.
Brexit & other international trade developments
The UK has left the EU and negotiations on the future trading relationship of the UK and the EU have concluded with a deal agreed. So what next for businesses as we enter this new trading world?
- Brexit and EU law rights
As reported previously, Peter Halford and Mark Whitehouse have written an article on the impact of Brexit on EU law rights for the Tax Journal, which focuses on the implications for direct tax cases. A pdf of the article can now be found on our Suite here.
Visit our Beyond Brexit webpage for the latest updates.
Tax treaty update
- Double taxation treaty passport scheme register updated
HMRC have updated the double taxation treaty passport scheme register with 40 additions and two amendments. View the updated guidance here. - Australia/UK
HMRC has published the Australia-UK memorandum of understanding (MOU) on arbitration under Part VI of the Multilateral Instrument.
Transfer Pricing in 5 Minutes, Episode 2: Operational Transfer Pricing
The second of a regular series of short videos highlighting key issues and developments in the transfer pricing field. This episode discusses operational transfer pricing and how it supports implementation, execution and the management of risk for transfer pricing policies.
Approved offshore reporting funds
HMRC has updated its list of offshore funds that have applied for and been approved as reporting funds and that have entered the Reporting Fund Regime as at 31 May 2021.
EU
EU Tax News - March/April 2021
EU tax news is a bimonthly newsletter with 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. The newsletter is prepared by members of PwC's EU direct tax group (EUDTG) from across Europe. Read the latest edition.
G7 Summit - statement by President von der Leyen
President von der Leyen gave a joint press conference with President Michel ahead of the G7 Summit taking place in Cornwall over 11-13 June.
European Commission proposal to address distortions caused by foreign subsidies
The European Commission recently proposed a new regulation to address foreign subsidies, which in certain cases are seen to be distorting the internal market. This step, which follows the EC’s publication of a White Paper on distortive subsidies in June 2020, aims to ensure a level playing field in the internal market. Read more in this Tax Policy Alert.
Draft political agreement on Public CbCR between EU Parliament and Council
According to a Council of the EU’s press release, negotiators for the European Parliament and the Portuguese EU Council Presidency, on behalf of the Council of the EU, provisionally reached a compromise deal on the EU’s draft Directive on public country-by-country reporting for big multinational groups. Read more in our PwC EU Direct Tax Group news alert.
New European Tax Observatory to support fight against tax abuse through cutting-edge research
The European Commission announced the launch of the European Tax Observatory: a new research laboratory to assist in the EU's fight against tax abuse. The Observatory will be fully independent in conducting its research, objectively informing policymakers and suggesting initiatives that could help to better tackle tax evasion, tax avoidance and aggressive tax planning. Read more in this European Commission press release.
Tax avoidance – fighting the use of shell entities and arrangements for tax purposes
The European Commission has launched a public consultation to collect data and evidence needed to design new rules to fight the abuse of shell entities and arrangements for tax avoidance purposes. Interested stakeholders have until 27 August 2021 to contribute their views.
The EU needs new sources of revenue, MEPs stress
Budget Commissioner Johannes Hahn confirmed during a debate in the European Parliament that the Commission will table proposals for three new EU income streams on 14 July, rather than at the end of this month. The European Commission will release proposals for a carbon border adjustment mechanism (CBAM), a digital levy, and changes to the EU Emissions Trading System (ETS) in mid-July. Read more in this European Parliament 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) G7 reach historic minimum global corporate taxation rate agreement; 2) EU Council & Parliament reach provisional compromise on CbCR public disclosure; 3) EU launch consultation on fighting the use of shell entities for tax purposes; 4) EU Tax Observatory to identify means to combat tax avoidance in the EU; and 5) CFE Tax Academy webinar on cryptocurrency developments & digital regulation – 17 June. View previous editions here. - CFE Global Tax Top 10 - May 2021
This edition includes: 1) EU sets out new corporate tax reform proposals; 2) OECD to introduce cryptocurrency reporting by end 2021; 3) US Senate reservations on Biden’s tax proposals; 4) UN releases updated Transfer Pricing Manual; 5) OECD publish Inheritance Tax Report; 6) Tax Inspectors Without Borders mobilises over 1 Billion USD in tax revenues for developing countries; 7) EU Commission proposes new regulation to address distortion by foreign subsidies in single market; 8) OECD publish Taxing Wages 2021 Report; 9) European Union launches EU Tax Observatory; and 10) Tax Transparency in Africa Report 2021.
OECD
G7 Finance Ministers commit to Pillars One & Two, including global minimum tax rate of ‘at least’ 15%
The G7 Finance Ministers announced an agreement on 5 June in which the participating countries committed to new taxing rights that allow countries to reallocate some portion of profits of large multinational companies to markets (ie where sales arise—'Pillar One’), as well as enact a global minimum tax rate of at least 15% (‘Pillar Two’). The meeting marked an early test of whether the US position on the OECD Inclusive Framework’s ‘Taxation of the Digitalising Economy’ project would provide momentum to finding a common base for agreement.
- Read more in our Tax Policy Alert.
- See this Statement from OECD Secretary-General Mathias Cormann
- See this European Parliament press release
- For further coverage focused on the impact of the impact of this agreement for the digital economy, see the ‘Taxation of the digital economy’ item below
MLI scope continues to expand
The BEPS multilateral instrument (MLI) entered into force on 1 June 2021 for Croatia and Malaysia and will enter into force in Greece and Hungary on 1 July 2021. See here.
Public comments received on proposed changes to Commentaries in the OECD Model Tax Convention on Article 9 and on related articles
On 29 March 2021, as part of the ongoing work of the OECD/G20 Inclusive Framework on BEPS, the OECD secretariat invited public comments on proposed changes to the commentaries on Article 9 and related articles of the OECD Model Tax Convention. The OECD has now published the comments received.
The times they are a-changing: is now the time to sign up for the next round of ICAP?
The OECD’s International Compliance Assurance Programme (ICAP) expands the opportunities for MNE groups to achieve increased tax certainty and complements the use of Advance Pricing Agreements (APAs). The deadline for applying for the next round of ICAP risk assessments is 30 September 2021. Read more.
Other territories
International
Taxation of the digital economy
Keep track of the number of international initiatives that are underway to address the tax problems caused by digitalisation of our economy:
- Global Digital Tax Online
In a time when information is key and compliance is vital, GlobalDigitalTaxOnline (GDTO) is an essential tool to help navigate the complex world of tax and the reporting of various digital/electronic services. Read more about our new online subscription service.
- Digital tax byte
The latest edition from 10 June includes: digital tax developments in Spain; EU Observatory publishes research on the impact of imposition of a minimum tax; G7 statement on commitments on 20/10 for Pillar One and 15% for Pillar Two arguments; Czech Parliament progresses debate on its DST; digital tax developments in Maryland; USTR terminates remaining four investigations into DSTs; OECD’s outgoing and income Secretary-Generals comment on G7’s Pillar One and Two deal..
- Digital tax megabyte for May 2021
A collection of the brief insights throughout May 2021 of the type provided on an ad hoc basis in our Latest digital tax byte update. Read the newsletter here.
Australia
Monthly tax update: June 2021
Welcome to the June edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.
Update on ATO COVID measures on Permanent Establishments
We reported previously that the Australian Taxation Office (ATO) updated its guidance on the rules regarding the creation of a permanent establishment in Australia in response to the COVID-19 pandemic. On 12 May 2021, the ATO updated its Taxation Ruling TR 2002/5 on Permanent Establishments to formally recognise the ongoing COVID-19 pandemic as an “extraordinary circumstance”, where a forced presence of employees in Australia for more than six months may be considered “temporary” for the purposes of satisfying the temporal permanence requirement for foreign entities to trigger a PE in Australia. The ATO has also updated its website to confirm the extension to 31 December 2021 of its administrative guidance for foreign entities which may otherwise inadvertently create an Australian PE due to dislocated employees working in Australia as a result of the ongoing pandemic. Read more in this PwC Tax Alert.
Belgium
See here for latest updates.
New Administrative Circular regarding the Belgian Tax on Savings Income
The Belgian tax administration has issued Administrative Circular number 2021/C/56 regarding the Belgian Tax on Savings Income (BTSI). The main objective of the circular is to highlight methodological points regarding the Asset Test (i.e. percentage of the assets of an Undertaking for Collective Investment (UCI) invested in debt-related assets) and Belgian Taxable Income per Share (BTIS) computation required in the framework of the BTSI. Read more in this PwC Belgium news item.
Canada
2021 Newfoundland and Labrador budget – Tax highlights
On 31 May 2021 Newfoundland and Labrador's Minister of Finance presented the province's 2021 budget. The budget does not change corporate income tax rates, but does: 1) increase personal income tax rates on taxable incomes over $135,973, starting 2022; 2) introduce a refundable physical activity tax credit; and 3) increase tax rates on tobacco and introduce a sugar sweetened beverage tax. This Tax Insights discusses these and other tax initiatives proposed in the budget.d
Department of Finance launches consultations on tax implications of international accounting rules for insurance contracts (IFRS 17)
With IFRS 17 due to enter into effect on1 January 2023, the government has launched a consultation with industry stakeholders on its intention to maintain the current alignment between the taxation of profits and the timing of income earning activities.
Department of Finance launches consultations on investment tax credit for carbon capture, utilization, and storage
The Department of Finance is launching consultations with stakeholders on the recent federal budget’s proposal to introduce a new investment tax credit for capital invested in carbon capture, utilization, and storage (CCUS) projects. Stakeholders are invited to provide comments on the government’s proposed approach by 7 September 2021.
Government of Canada Announces Details of the New Canada Recovery Hiring Program and Extension of Business Support Programs
The Deputy Prime Minister and the Minister of Small Business recently announced that the new Canada Recovery Hiring Program would be available retroactively to 6 June 2021. They also announced that the Business Credit Availability Program and Highly Affected Sectors Credit Availability Program are being extended to 31 December 2021. Read more in this Department of Finance news item.
China (excluding Hong Kong)
China Tax Facts and Figures 2021
This PwC booklet provides an overview of taxes levied in the People’s Republic of China. The taxes applicable in mainland China do not cover Hong Kong and Macau who retain their own tax systems.
Croatia
BEPS MLI enters into force
The BEPS multilateral instrument (MLI) entered into force for Croatia on 1 June 2021, which has selected 65 treaties as covered agreements. The OECD has published the list of reservations and notifications Croatia has made, which explains which provisions it has agreed to adopt and for which treaties.
Cyprus
Cyprus ratifies first-time double tax treaty with Netherlands
The first-time double tax treaty between Cyprus and the Netherlands, which was signed on 1 June 2021, was ratified by Cyprus on 4 June 2021. See this PwC Tax Insights for an overview of the provisions
Falkland Islands
Governor's annual budget speech 2021
His Excellency Governor Phillips CBE delivered the annual address on 1 June 2021 to the Falklands Islands Assembly on the budget for the new financial year. Read the speech in this Government news item.
Germany
TP perspective on Act to Modernize the Relief from WHT and the Certification of CGT
The German Parliament (Bundestag) recently adopted an Act to Modernize the Relief from Withholding Taxes and the Certification of Capital Gains Tax. The German Federal Council (Bundesrat) passed the Act on 28 May 2021 so that the German legislative process has now been finalised. The Act also contains amendments or supplements to the Foreign Tax Act (AStG) and the General Tax Code (AO) that are relevant from a transfer pricing perspective. Our Newsflash provides an overview of the most important points. Read more in this PwC German newsflash
Abuse of legal forms in the case of merger
The Supreme Tax Court concluded that the offset of losses in the case of an upstream merger where the profits of the transferring company accrued during the period of retrospective application was not abusive and was in accordance with the legal (tax) provisions in force in the year of dispute (2008). Read more in this PwC Germany tax blog.
Greece
BEPS MLI to enter into force
The BEPS multilateral instrument (MLI) will enter into force for Greece on 1 July 2021, see here.
Hong Kong
Interest on Tax Reserve Certificates
A recent Government Gazette contained a Legal Notice to the effect that the Secretary for Financial Services and the Treasury has authorised a change in the rate of interest payable on Tax Reserve Certificates. From 7 June 2021 the new annual interest rate will be 0.05 per cent against the current rate of 0.0833 per cent, i.e. the new rate will be $0.0042 per month per $100. Read more in this IRD press release.
Hungary
BEPS MLI enters into force
The BEPS multilateral instrument (MLI) will enter into force for Hungary on 1 July 2021, see here.
Ireland
Revenue implement changes to provide CRSS enhanced restart week payment
The Irish Revenue has confirmed that it is implementing a change to the Covid Restrictions Support Scheme (CRSS) to increase restart payments for businesses opening from 2 June 2021. As part of the changes, eligible businesses resuming trading activities from 2 June 2021 can claim an enhanced restart payment to assist them with the additional costs of reopening. The enhanced restart payment provides a single payment in respect of a 3-week period, with the weekly entitlement calculated at double the normal weekly CRSS rate. Read more in this press release.
Fiscal Assessment Report - May 2021
In its latest Fiscal Assessment Report, Ireland’s budgetary watchdog, the Irish Fiscal Advisory Council (IFAC) has said that changes to the international tax landscape pose risks to Ireland's tax take and competitiveness.
Italy
Treaty credit claim can be made in relation to dividends to which Parent-Subsidiary Directive apply
The Supreme Court recently issued its decision in a case concerning dividends paid by an Italian company to its parent company resident in France. Overturning earlier rulings, it concluded that the French parent is entitled to request a refund of the tax credit set out in Article 10(4)(b) of the Italy-France double tax treaty, even though no withholding tax had been imposed on the dividend due to the operation of the Parent-Subsidiary Directive. This is on the basis that (following the CJEU case C-389/18, Brussels Securities, of 19 December 2019) the Directive alone does not necessarily eliminate the risk of economic double taxation or the violation of the principle of fiscal neutrality. Therefore, the Supreme Court upheld the French company’s appeal, redirecting the case to the Regional Tax Court to apply this legal principle. Read more in this PwC tax blog.
Japan
Transformation of tax filing processes under the 2021 Tax Reform
The 2021 Tax Reform Proposals contained several provisions accelerating the digital transformation of the administrative processes and procedures of the National Tax Agency, regional taxation bureaus and local tax offices (collectively, NTA). While discussion on these changes has been long ongoing, the COVID-19 pandemic made it clear that transformation was required urgently. The 2021 Tax Reform Proposals were passed into law by the Japanese government on 26 March 2021 and promulgated on 31 March 2021. This PwC newsletter provides a more detailed summary of the new legislation and guidance that the NTA has published.
Malaysia
Singapore explains new BEPS changes to Malaysia double tax treaty
The BEPS multilateral instrument entered into force on 1 June 2021 for Malaysia, which selected 73 treaties as covered agreements. The MLI changes to Singapore's double tax treaty with Malaysia entered into force on 1 June 2021.
Middle East
The business perspective on tax transformation
The tax landscape in the Middle East is changing faster than ever before, spurred on in many ways by the impact of COVID-19, and there has never been a more important time for us to take a snapshot of how organisations and their tax functions are operating and responding. Register here to view this recent webcast, where we examine the findings of our first Middle East Tax Leaders Survey and what they mean for organisations in the region.
UAE: Tax penalties - amendment, redetermination and waiver request
On 28 April 2021, the UAE Cabinet issued Decision No. 51 of 2021 to amend certain provisions related to the request for waiver of penalties as stipulated under the Cabinet Decision No. 36 on the Executive Regulations of Federal Law No. 7 of 2017 on Tax Procedures. On 25 and 27 May 2021 the Federal tax Authority issued two Public Clarifications, providing illustrative examples on the reduction and redetermination of penalties further to Cabinet Resolution No. 49/2021 issued earlier last month to amend the provisions of Cabinet Resolution No. 40/2017 relating to administrative penalties imposed for violation of Tax Laws in the UAE. See this PwC tax news item.
Netherlands
Impact Tax Plan 2021 - Tax loss changes substantively enacted
In December 2020 the Dutch Senate accepted the Dutch Tax Plan 2021. This means that some of the measures as included in the Dutch Tax Plan 2021 are considered to be substantively enacted under IFRS and Dutch GAAP. PwC Netherlands have updated this article with news on the loss compensation rules.
Cyprus ratifies first-time DTT with Netherlands
As reported above, the first-time DTT between Cyprus and the Netherlands, which was signed on 1 June 2021, was ratified by Cyprus on 4 June 2021. See this PwC Tax Insights for an overview of the provisions.
Russia to terminate double tax treaty with the Netherlands
The Russian Federation and the Netherlands failed to renegotiate their current double tax treaty (‘treaty’). The controversy between the Netherlands and Russia is over the higher WHT rates that Russia wants to impose on interest, royalty and dividend payments and the stricter conditions Russia wants to apply to companies in order to be eligible for treaty benefits. Under Bill No. 1147902-7, approved by the lower house of parliament earlier this month, Russia will notify the Netherlands of its intention to withdraw from the treaty by 1 July 2021, enabling it to terminate the deal with effect from 1 January 2022. The lack of a new treaty will also have consequences for all other taxable activities between Russia and the Netherlands. You can register here for a webcast taking place on Tuesday 22 June 2021 at 4pm (CEST) hosted by PwC. Read more in this PwC tax news item.
Russia
Movable property
In a ruling on the Yug-Novy Vek case, the Russian Supreme Court has formulated a method for qualifying property as movable (and thus non-taxable for organisations) and has reiterated its ruling from the Lesozavod 25 case from mid-2019. The new ruling highlights a gap in Russian tax legislation, even if the courts should not be doing the work of legislators. That said, we do not expect to see amendments to the clauses covering movable property in the Russian Tax Code (RTC) in the near future. Read more in this PwC Russia Tax Flash.
54.1 and eligibility for tax reconstruction
The Russian Supreme Court’s Judicial Board for Economic Disputes has issued a significant ruling on a case involving an alleged tax avoidance scheme. The decision concerns eligibility for the reconstruction of tax liabilities and the circumstances under which taxpayers could lose 100% of their expenses on transactions with bad suppliers. Read more in this PwC Russia Tax Flash.
Russia to terminate double tax treaty with the Netherlands
As reported above, the Russian Federation and the Netherlands failed to renegotiate their current double tax treaty (‘treaty’). The controversy between the Netherlands and Russia is over the higher WHT rates that Russia wants to impose on interest, royalty and dividend payments and the stricter conditions Russia wants to apply to companies in order to be eligible for treaty benefits. Under Bill No. 1147902-7, approved by the lower house of parliament earlier this month, Russia will notify the Netherlands of its intention to withdraw from the treaty by 1 July 2021, enabling it to terminate the deal with effect from 1 January 2022. The lack of a new treaty will also have consequences for all other taxable activities between Russia and the Netherlands. You can register here for a webcast taking place on Tuesday 22 June 2021 at 4pm (CEST) hosted by PwC. Read more in this PwC tax news item.
Singapore
Tax News - May 2021
This publication aims to share bite-sized information and updates from Singapore and around the region. Included in this issue: 1) Country-by-country reporting; and 2) Singapore and Serbia sign a tax treaty.
Singapore explains new BEPS changes to Malaysia double tax treaty
As reported above, the Government of Singapore recently released the synthesized text of the country's double tax treaty with Malaysia, as modified by the BEPS MLI. The MLI changes to Singapore's double tax treaty with Malaysia entered into force on 1 June 2021.
GST: Transfer Pricing Adjustments
The Inland Revenue Authority of Singapore (IRAS) recently issued a new goods and services tax (GST) guide which explains the GST treatment for adjustments on the transfer prices of transactions between related parties.
South Africa
The exchange of currency and apportionment of input tax
On 25 May 2021 the Supreme Court of Appeal (‘SCA’) delivered judgment in the matter of the Commissioner for the South African Revenue Services v Tourvest Financial Services (Pty) Ltd (435/2020) [2021] ZASCA 61. The judgment overturned the decision of the Tax Court in ABC (Pty) Ltd v Commissioner for the South African Revenue Service (1626) [2020] ZATC, which went in favour of the taxpayer. At issue in both matters was the nature of the sale of foreign currency in return for a commission by Tourvest Financial Services (Pty) Ltd (‘Tourvest’) and its corresponding entitlement to input tax. In short, the SCA found that the sale of foreign currency constitutes an exempt activity and, as such, where a commission is charged, the activity does not lose its exempt nature and a mixed supply is created. The result of the SCA decision is that Tourvest was required to apportion its input tax. This PwC Alert discusses the judgment delivered by the Supreme Court of Appeal.
Tax Synopsis - May 2021
Welcome to the May edition of Synopsis. Items in this edition include: 1) The Constitutional Court adjudicates another tax issue; 2) The concept of modification gains or losses – what should you take note of? and 3) SARS watch.
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
Tax update - May 2021
Topics covered in this issue: 1) Extension of tax filing and payment deadlines due to COVID-19; 2) MOF announced draft rule governing exemption from heavy taxation under Joint Property Tax System 2.0 for individuals and profit-seeking enterprises who sell building and land held for less than 5 years due to involuntary factors; and 3) MOF announced draft amendment to “Regulations Governing Application of Agreements for the Avoidance of Double Taxation with Respect to Taxes on Income”.
Turkey
Limitation on financial expenses deduction
Guidance has been released by the Turkish tax authorities on the application of the financial expense deduction limitation rule which became effective from 1 January 2021. Read more in this PwC Turkey tax bulletin.
US
Treasury ‘Green Book’
We reported previously that the US Treasury on 28 May released the much-anticipated 'General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals' ('Green Book'). The Green Book serves as a guidepost for the Administration’s proposed tax legislation, describing current law, proposed law, the Administration’s policy rationale for the proposals, and revenue projections. While the Green Book reflects the Biden Administration’s recommendations, Congress will be responsible for drafting and enacting any tax legislation. The following material is now available:
- Treasury ‘Green Book’ describes Biden’s tax proposals for businesses
This PwC Tax Insight covers the provisions (and proposed effective dates) that are applicable to businesses. - Treasury ‘Green Book’ fleshes out Biden ESG tax proposals
This PwC Tax Insight focuses on the discussion of the Biden tax proposals related to incentives for clean energy and domestic manufacturing listed in the Green Book under the heading ‘Prioritize Clean Energy.’ - Biden budget proposes increased information reporting
The President’s budget proposals include creation of a comprehensive financial account information reporting regime under which financial institutions would be required to report information on account inflows and outflows to increase reporting on earnings from investments and business activity. Similar reporting requirements would apply to crypto asset exchanges, custodians, and payment settlement entities. Read more in this PwC Tax Insight. - Explaining the explanation: Biden’s Greenbook
Doug HcHoney (PwC's US International Tax Services (ITS) Leader) discusses the Treasury Green Book with Pat Brown (PwC WNTS Policy Co-leader) in this episode from 8 June of his Cross-border tax talks series.
Tax and Investment in the USA
This publication provides updates on recent tax and trade issues and developments of interest to global companies operating in the United States. Topics covered include: 1) Trade developments; 2) Digital taxes; 3) ESG; and 4) Individual income taxation.
IRS issues GILTI accounting method change procedures
The IRS recently issued Rev. Proc. 2021-26, which provides automatic consent for certain accounting method changes to the alternative depreciation system (ADS) for purposes of the global intangible low-taxed income (GILTI) regime under Section 951A, and updates terms and conditions for accounting method changes to take into account the enactment of Section 951A. Taxpayers subject to the GILTI regime may want to consider whether a change to the ADS for GILTI purposes may be necessary or beneficial. Read more in this PwC Tax Insights.
California FTB considers comments on proposed market-based sourcing rules
The California Franchise Tax Board (FTB) recently held an Interested Parties Meeting (IPM) to discuss proposed amendments to the market-based sourcing rules under California Code of Regulations, title 18 (CCR), section 25136-2. Five previous IPMs for the market-based sourcing rules were held over 2017 – 2020. The new proposed amendments retain most of the changes in previous drafts of the regulation, but make new changes related to “professional services” providers, and change the applicability date of the amendments to tax years beginning on or after 1 January 2023. Read more in this PwC Tax Insights.
Illinois Legislature passes several bills proposing significant tax changes; governor expected to sign
The Illinois Legislature has passed several bills that the governor is expected to sign. Among the proposed changes are: 1) providing addbacks for the 50% GILTI deduction, IRC Section 245A deduction and IRC Section 243(e) deduction, starting in tax years ending on or after June 30, 2021; 2) implementing a three-year, $100,000 per-year net loss deduction limitation, starting in tax years ending on or after December 31, 2021; and 3) decoupling from 100% bonus depreciation for tax years ending on or after December 31, 2021. The bills as passed by the legislature are summarized in this Tax Insight.
Massachusetts Supreme Judicial Court affirms right to software tax apportionment
The Massachusetts Supreme Judicial Court recently affirmed the right to apportion sales tax on software transferred for use in more than one state, allowing the sellers’ application for abatement of tax on out-of-state software use. There may be a sales tax refund opportunity for Massachusetts-based purchasers of software for use outside of Massachusetts if the purchaser failed to timely tender a multiple points of use certificate to the vendor. Read more in this PwC Tax Insights.
New Jersey Tax Court precludes NOL adjustment in closed tax years
The New Jersey Tax Court recently found that the New Jersey Division of Taxation could not adjust NOL carryforwards that were created in years that were closed due to the state’s four-year statute of limitations against assessment. The Tax Court stated that such an adjustment would be “tantamount to an adjustment of the income reported in those years and thus constitutes an audit of closed years, which is impermissionable under the” New Jersey four-year statute of limitations. Read more in this PwC Tax Insights.
Subscribe for US tax alerts
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Webcasts & podcasts:
- Tax Function of the Future: R&D Innovation and Cloud
‘Cloud’ use is accelerating across the business... what’s the impact for Tax? Join us for this webcast on Wednesday 16 June 2021 at 7pm where we will explore why quantifying the bottom line tax impact of cloud computing while serving as a strategic partner for cloud efforts, such as R&D and ERP, are both critical tasks for Tax. - Q2 financial reporting considerations
Register here to join us on Wednesday 23 June 2021 at 7pm where our panel of Tax Accounting Services (TAS) specialists will take a deep dive into relevant tax accounting matters and recent tax developments.
- Cross-border tax talks
- Explaining the explanation: Biden’s Greenbook
As noted above, in this episode from 8 June, Doug McHoney (PwC's US International Tax Services (ITS) Leader) holds the second post-vaccine session live at the Westminster Studios with Pat Brown (PwC WNTS Policy Co-leader) to discuss President Biden’s FY 22 Budget and the much anticipated and related explanations of such proposals, also known as the Treasury Green Book.
- Explaining the explanation: Biden’s Greenbook
Previous episodes in this fabulous series of podcasts can be found here, as well as on Spotify, YouTube and other streaming services.
- Talking tax with Industrial Products: Insights on the Biden Administration’s tax policy agenda
In this podcast from 18 May, Scott McCandless and Janice Mays, senior members of PwC’s Tax Policy Services team, join John Livingstone, PwC’s Global Industrial Products Tax Leader, to discuss the potential implications of the Biden Administration’s tax policy agenda to industrial manufacturers.
Replays:
A number of previous webcasts are available for replay in our US tax reform hub here, including:
- Tax Readiness: Key state tax legislation and trends - What you need to know to navigate change
This webcast, held on Tuesday 8 June 2021, focused on key state legislation impacting corporate, passthrough entity, individual, and indirect taxes. Register here to watch the replay. - Tax Readiness: Treasury's Green Book is back, adding detail to President Biden's tax proposals
Register here to watch the relay of our PwC panel walking through Treasury's 'Green Book,' which adds details to President Biden's FY22 Budget proposals, and informs Congress. - Tax Readiness: Preparing for Deals in a Changing Environment
In this webcast, held on Wednesday 26 May 2021, PwC professionals from our Tax and Deals practices had a timely discussion of the many factors impacting the current deals environment including the prevalence of ESG, the use of SPACs, and anticipated tax changes. - Mexico's outsourcing services reform significantly impacts multinationals
As reported above, you can watch the replay here from this webcast on Thursday 27 May 2021 where we discussed the legislation recently published in Mexico that will significantly impact multinational entities with operations or investments in Mexico. - Zeroing in on your trade and supply chain strategy: How ready is your business?
If you missed this webcast, you can watch the replay from Wednesday 12 May 2021 where we examined potential steps that businesses can take in the near-term to proactively prepare for any changes in trade policy. - Tax Readiness: The intersection of ESG and Tax
Register here to watch the replay from our webcast on Wednesday 5 May 2021 to learn more about environmental, social and governance (ESG) and how tax leaders can engage with the C-suite to align tax with ESG transformation.
Other updates
For regular updates on this topic, check out our US tax reform hub on The Suite here.