Four weeks to 16 September 2022
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
UK
Budget
Chancellor Kwasi Kwarteng will hold a 'Fiscal event' on Friday 23 September (the precise timing of which is yet to be confirmed).
- Tax experts identify three strategic priorities for the new prime minister to improve the tax system
The President of the Chartered Institute of Taxation, Susan Ball, has written to both Rishi Sunak and Liz Truss setting out the Institute’s views on what should be the new Prime Minister’s priorities for the tax system. Read more in this CIOT news release. - UK Economic Outlook
Explore our latest analysis of the UK economy, which focuses on how we expect geopolitical changes and the rising cost of living to impact the outlook for GDP growth and inflation, as well as policy recommendations to promote growth.
Internal Debt Reorganisations
Since the COVID pandemic, and in an environment of rising costs, we have seen a lot of businesses seeking to simplify and rationalise their group structures in order to respond to M&A activity, remove unnecessary entities, or resolve distributable reserve blocks. Often this activity also involves rationalising and managing intercompany loan positions, and this can often be a challenging exercise. Such programmes can carry the risk of unexpected taxable gains arising, withholding tax challenges, or the potential claw back of previously deducted management expenses. Read more.
Blackrock Holdco 5 LLC v HMRC - Upper Tribunal Decision
The Upper Tribunal has handed down its decision in the Blackrock appeal (Blackrock Holdco 5 LLC v HMRC [2022] UKUT 00199 (TCC) ). This decision, which creates legal precedent, has important implications for the deductibility of interest by companies under both the “Unallowable Purpose Rule” and the transfer pricing rules. Read more.
Nexus patent box regime changes from 1 July 2021 - action needed in advance of submitting tax returns
As you may be aware, the Nexus Patent Box regime took effect from 1 July 2021 and grandfathering under the old scheme ended. This means that all companies, irrespective of the date IP has been granted, will need to prepare their patent box claims under the new scheme from this date. Read more in this article which provides more information on the changes.
HMRC manual changes
- Entity classification
- International Manual (INTM180030) - Removing the Dutch entity Cooperatie uitsluiting Aansprakelijheid (Coop UA) from the Foreign entity classification for UK tax purposes list.
- Company Taxation Manual (CTM00510) - Updates to the guidance on the meaning of ‘body corporate’ and the process and effect of incorporation and addition of historical context.
- Treaty relief - payments made prior to grant of treaty clearance
On 19 August 2022, HMRC made a minor change to its manual at INTM413230 regarding the procedure for claiming repayment of tax withheld on payments made prior to the grant of clearance to apply the treaty rate of withholding tax to such payments. As a result, taxpayers will find that the period for which such claims can be made has been reduced by a number of months - the precise number depending on the taxpayer’s year end.
Treaty updates
- HMRC update UK-Germany double tax treaty information
HMRC have added the 2010 Germany-UK Double Taxation Convention as amended by the 2021 Protocol (in force) to their online guidance covering tax treaties and related documents between the UK and Germany.
R&D Claims are coming under increasing scrutiny
This article explores the impact of new information requirements for claimants of UK research and development (“R&D”) tax relief, which have been implemented as part of HMRC’s strengthened resolve in policing the R&D regime.
Offshore Corporates Owning UK Property – HMRC campaign
HMRC have told the Chartered Institute of Taxation (CIOT) that they will be launching a new campaign in September 2022 to tackle non-compliance linked to offshore corporates owning UK property. Read more in this CIOT news article.
Delivering Tax - Value Creation
With international and domestic taxes on the rise, and becoming increasingly complex, more than ever - tax is key to creating value in transactions. Find out how tax enriches every part of the deal lifecycle in our latest Delivering Tax webcast.
HMRC issues nudge letters for rollover relief claims on residential letting sales
This article explores the implications of HMRC's recent nudge letters for rollover relief claims on residential letting sales.
Approved offshore reporting funds
HMRC has updated the list of approved offshore reporting funds to include the latest funds that have entered the Reporting Fund Regime. The list has been updated to include the funds that have entered as at 2 September 2022. View the updated list.
Trust, technology and transformation: The TMT trends affecting us all
Following the pandemic we’re more online, more aware of emerging technology and more likely to place as much greater emphasis on a brand’s reputation and purpose as their products or services. So what does this mean for businesses looking to connect with their customers? Listen to this latest Business in Focus podcast.
Taking Statutory Financial Statement preparation into the future
With the ever growing complexity of completing businesses’ statutory accounting and year end cycles and the demand for more insights, transparency & accountability, businesses need a forward looking approach to statutory financial statement preparation. Our latest blog post discusses how we can best help clients and ensure they are ready for change
EU
Pillar Two
- Key EU members reaffirm their commitment to implement in 2023
On 9 September, at the informal ECOFIN meeting in Prague, the finance ministers of France, Spain, Italy, the Netherlands and Germany issued a joint statement. In it, they reaffirmed their commitment to implement Pillar 2 in 2023, even if unanimity could not be reached among EU member states. They also stated their commitment to completing the work on Amount A of Pillar 1, with the objective of signing a multilateral convention on the matter by mid-2023.
CFE Tax Advisers Europe
- EU Tax Policy News Top 5
The latest round-up of EU Tax Policy news from the Confédération Fiscale Européenne (CFE). The latest edition from 12 September includes: 1) CFE President addresses EU Finance Ministers at informal ECOFIN meeting in Prague; 2) EU Pillar II implementation: certain Member States to proceed unilaterally; 3) OECD: Tax Morale II – Building trust between tax administrations & large businesses; 4) IFA Czech Republic Conference on the use of technology in tax administration & professional ethics in taxes: 16 September 2022; and 5) Forum on Tax Administration publishes tax capacity building guide. Visit their latest news page here.
OECD
Pillar One Model Rules - Amount A
- Public comments received on the Progress Report
On 11 July 2022, as part of the ongoing work of the OECD/G20 Inclusive Framework on BEPS to implement the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy, the OECD invited public comments on the Progress Report on Amount A of Pillar One to assist members in further refining and finalising the relevant rules. The OECD has now published the public comments received.OECD pu - Public consultation meeting
The OECD’s public consultation on the Progress Report on Amount A of Pillar One (‘The Progress Report’) was held on 12 September 2022. This PwC Tax Policy alert provides an overview of the consultation meeting and some initial observations. You can watch the replay of the meeting here.
MLI
- Bulgaria deposits an instrument for the ratification of the MLI
Bulgaria has deposited its instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). The MLI will enter into force on 1 January 2023 for Bulgaria. See https://oe.cd/mli.
BEPS Action 14 New peer review assessments
The OECD has released Stage 2 peer review monitoring reports for Aruba, Bahrain, Barbados, Gibraltar, Greenland, Kazakhstan, Oman, Qatar, Saint Kitts and Nevis, Thailand, Trinidad and Tobago, United Arab Emirates and Vietnam.
Pascal Saint-Amans to step down
After 15 years at the OECD, including 10 years as the Director of the Centre for Tax Policy and Administration (CTP), Pascal Saint-Amans will retire from the organisation at the end of October 2022, see here. Will Morris, PwC’s Deputy Global Tax Policy Leader, shares his insights into his departure here, and addresses the question he is receiving the most: What does Pascal’s departure mean for the Pillar One and Two project?
OECD releases a practical guide to assist tax administrations in designing and carrying out tax capacity building programmes for developing countries
This report sets out considerations that administrations might want to take into account in establishing a capacity building strategy and describes the main diagnostic tools available to help understand a partner jurisdiction’s level of maturity and identify possible needs. Read more.
Building mutual trust and improving communications between tax administrations and business is critical for improving voluntary compliance
Effective taxation of large businesses would benefit from increased efforts to build trust and improve communication between tax administrations and Multinational Enterprises (MNEs), according to a new report from the OECD. Read more.
Other territories
International
Digital tax byte
The latest addition to our series of brief insights into the workings of the UK and supranational bodies reviewing the taxation of digitalisation of business. The latest edition from 7 September includes clarification from Kenya on the exemption for registered non-resident suppliers of digital services from issuing electronic tax invoices and news from Australia that the new Government has reintroduced plans for digital platform reporting. The European Commission has also adopted an implementing Regulation on DAC7 schema and statistical reporting.
Digital tax megabyte
This edition, to the end of August, includes comments on a G24 response to the Pillar 1 Amount A Progress Report, as well as Korean draft legislation and Malaysian and Swiss consultation documents for implementing Pillar 2, while Hong Kong has announced delays in implementing Pillar 2. It also includes guidance from the Irish Revenue on the deductibility of digital services taxes (DSTs) and our summation of the European Commission's report on its public consultation on 'VAT in the Digital Age'. A New Zealand Tax Bill also provides draft legislation extending the GST charge on electronic marketplace operators, as well as incorporating the OECD model rules on reporting by such platforms while Bulgaria is consulting about the adoption of the EU equivalent DAC7 provisions.
Environmental, Social and Governance (ESG)
- The General Counsel’s role in ESG
GCs have a key role on the governance side of an ESG strategy, addressing SEC climate-related disclosure rules and liability concerns. See here for 10 questions to ask. - The Inflation Reduction Act and your business
The Inflation Reduction Act (IRA) is the largest climate legislation in US History. PwC lays out ESG opportunities and climate considerations for companies. Read more. - Tax Readiness: ESG Tax Incentives in the Inflation Reduction Act
Join our panel of specialists on Tuesday 4 October at 6pm, as they discuss the various tax and investment opportunities and how companies should consider these credits as a part of their broader ESG goals and strategy. Register here.
Argentina
Argentina temporarily suspends its mandatory tax planning disclosure regime
The Argentine Tax Authorities (‘AFIP’) issued a resolution on 1 September that temporarily suspends, for 60 calendar days, the mandatory disclosure regime established in a 2020 resolution related to domestic and international tax planning strategies. During the suspension period, AFIP expects to clarify the current rules for purposes of improving the efficiency of the regime. Read more in this PwC Tax Insights.
Australia
Australian Monthly Tax Update - September 2022
Welcome to the September 2022 edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.
Review of the Tax Treatment of Digital Assets and Transactions in Australia
In August 2022, the Board published a Consultation Guide which provides an overview of crypto assets and their current taxation treatment within Australia. The guide outlines recent relevant government reports and announcements and poses a series of questions for interested parties to consider when formulating input to the review. Comments are invited until 30 September.
Belgium
See here for latest updates.
Major changes to Belgian tax procedures in the pipeline
Reports of important amendments to the Belgian tax procedures appeared in the press, prior to the parliament’s summer recess. This newsflash summarises the main aspects and current status of the proposed measures.
Bulgaria
Bulgaria deposits an instrument for the ratification of the MLI
Bulgaria has deposited its instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). The BEPS Convention will enter into force on 1 January 2023 for Bulgaria. See https://oe.cd/mli.
Canada
Finance releases draft legislative proposals ─ Mandatory Disclosure Rules (MDR)
The Department of Finance recently released draft legislative proposals to implement numerous 2022 federal budget and other measures, including those to enhance Canada’s mandatory disclosure rules. The new draft legislative proposals are generally similar to those released in February 2022, except that the effective date of the rules is deferred by one year, so that they will apply to taxation years that begin (and transactions entered into) after 2022 (instead of after 2021). Interested parties are asked to provide comments to the Department of Finance on the draft legislative proposals by 30 September 2022. This PwC tax alert summarises the original proposals released in February.
Finland
Government publishes draft bill extending capital gains taxation of non- resident companies investing in Finnish real estate
Currently, non-resident real estate investors are subject to Finnish capital gains tax when making direct disposals of Finnish real estate assets, shares in Finnish mutual real estate companies or Finnish limited liability companies directly holding a majority of their assets in Finnish real estate. A draft bill published at the beginning of August is about to extend the capital gains taxation to transfers of entities indirectly holding Finnish real estate. Read more.
France
Key EU members reaffirm their commitment to implement in 2023
On 9 September, at the informal ECOFIN meeting in Prague, the finance ministers of France, Spain, Italy, the Netherlands and Germany issued a joint statement. In it, they reaffirmed their commitment to implement Pillar 2 in 2023, even if unanimity could not be reached among EU member states. They also stated their commitment to completing the work on Amount A of Pillar 1, with the objective of signing a multilateral convention on the matter by mid-2023.
Germany
Key EU members reaffirm their commitment to implement in 2023
On 9 September, at the informal ECOFIN meeting in Prague, the finance ministers of France, Spain, Italy, the Netherlands and Germany issued a joint statement. In it, they reaffirmed their commitment to implement Pillar 2 in 2023, even if unanimity could not be reached among EU member states. They also stated their commitment to completing the work on Amount A of Pillar 1, with the objective of signing a multilateral convention on the matter by mid-2023.
Liability of the Controlled Company arising after the termination of an Organschaft
In a recent case, the Supreme Tax Court decided that the liability of a controlled company (subsidiary) in a tax consolidation group (“Organschaft”) for the tax liability of its controlling company (parent in the Organschaft) is not necessarily limited to such taxes which arose during the existence of the Organschaft. The controlled company may be liable to the extent that the parent is required to pay tax on the controlled company’s turnover and may deduct input tax amounts from invoices for services obtained by the controlled company. Read more in this PwC blog.
No retroactive change of legal form effective for tax purposes if the contribution requirements are not met when the resolution is adopted
In its ruling of 21 February 2022 (I R 13/19), the Supreme Tax Court rejected the tax office's appeal against the ruling of the Lower Saxony Tax and ruled that the (retroactive) change of legal form of a partnership into a corporation under Section 25 Sentence 1 in conjunction with Section§ Section 20 (1) Reorganisations Tax Act is prohibited for tax purposes if, at the time of the resolution to convert, the partnership changing its legal form no longer engages in a commercial activity. Read more in this recent PwC blog.
Ministry of Finance announces full commitment against financial crime
The German Federal Ministry of Finance (MOF) recently published the key points for a more powerful fight against financial crime and a more effective enforcement of sanctions in Germany. With the planned measures it is envisaged to bundle the most important responsibilities and competencies under the umbrella of a new federal authority. Read more in this PwC tax blog.
India
Option agreement with a group entity for interim funding is commercially prudent and not a sham transaction
The Mumbai bench of the Income-tax Appellate Tribunal recently allowed an appeal in favour of the taxpayer company, stating that the Revenue cannot step in the shoes of the business person and question the commercial expediency of the transaction entered by the taxpayer-company. The Tribunal also held that the price determined under the option agreement can only be determined in accordance with the provisions of sections 50C or 43CA of the Income-tax Act, 1961. In addition, with respect to disallowance under section 14A of the Act, the Tribunal held that such disallowance had to be restricted to the extent of exempt income. Read more in this PwC Tax Insights.
Ireland
Budget 2023
This year's Budget, which is taking place on Tuesday 27 September, has been described as a 'cost of living' budget. We can therefore expect many measures that tackle inflation and support those struggling with increasing costs. However, the Government will be wary of further fuelling inflation as they consider their options. What measures can we expect the Minister for Finance, Paschal Donohoe, to announce in Budget 2023? Watch our pre-budget webcast and visit our Budget 2023 webpage to stay up to date with our latest insights.
Italy
Key EU members reaffirm their commitment to implement in 2023
On 9 September, at the informal ECOFIN meeting in Prague, the finance ministers of France, Spain, Italy, the Netherlands and Germany issued a joint statement. In it, they reaffirmed their commitment to implement Pillar 2 in 2023, even if unanimity could not be reached among EU member states. They also stated their commitment to completing the work on Amount A of Pillar 1, with the objective of signing a multilateral convention on the matter by mid-2023.
Supreme Court recognizes the right of foreign companies to receive refund of the tax paid in Italy on dividends distributed by resident companies
Decisions no. 26681/2022 and 26684/2022, lodged on 9 September 2022 by the Italian Supreme Court, ruled in cases relating to two different Dutch banks which had suffered 15% taxation on dividends distributed by an Italian company in the years 2005, 2006 and 2007. If the payments had been made to Italian companies in the same circumstances, they would have been taxed at a rate of only 1.65%. The Court ruled in favour of the taxpayers on the basis that (1) a reduced withholding tax of 1.65% should also apply to foreign entities, provided they are ‘subject to tax’ in their country of residence; and (2) the companies concerned satisfied this test despite qualifying for a participation exemption domestically. Read more in this PwC tax blog.
Japan
Revisions to Anti-Tax Avoidance Rule requiring reduction in basis of subsidiary’s shares after receiving dividends from subsidiary
Japan’s tax reform for 2022 increased the scope of certain exceptions to the application of the Anti-Tax Avoidance Rule; specifically, regarding (i) the calculation of retained earnings as of a specified control date and (ii) application of the ‘10-year holding period’ exception to controlled subsidiaries that have received dividends from second- or lower-tier subsidiaries or that have carried out a merger or spin-off within intra-group subsidiaries. The revised statutes of the Anti-Tax Avoidance Rule (provided in the Corporate Tax Law Enforcement Order) entered into force on 1 April 2022 and apply retroactively with regard to dividends received by taxpayers in fiscal years commencing on or after 1 April 2020. Foreign companies with a Japanese affiliate should be aware of the Rule prior to undertaking a restructuring or to the Japanese affiliate receiving dividends from a lower-tier subsidiary. Read more in this PwC tax update.
Korea
Tax Update - September 2022
This issue includes: 1) Cabinet Approves the Government’s Tax Reform Bill for 2022; 2) MOEF Forecasts the National Tax Revenue for 2022-2023 and Submits the National Tax Expenditure Plan for 2023; 3) MOEF to Consider a Measure to Cope with the Introduction of Foreign Rules on Reverse Hybrid Entity; and 4) Rulings update.
Middle East
Saudi Arabia: Amendments to Article (63) of the Income Tax By-Laws
The Zakat, Tax and Customs Authority (ZATCA) recently announced proposed amendments of Article (63) of the Income Tax By-laws, as a part of the ongoing transformation and development of the tax practice in the Kingdom of Saudi Arabia (KSA). Article (63), in particular, addresses the Withholding Tax imposed on non-residents who earn income from a source in KSA. Read more in this PwC tax alert.
Saudi Arabia: Approved amendments to the Real Estate Transaction Tax Regulations
The Board of Directors of Zakat, Tax and Customs Authority (‘ZATCA’) recently approved the amendments to various Articles of the Real Estate Transaction Tax (“RETT”) Regulations. These amendments will take effect as of 19 August 2022. Read more in this PwC tax alert.
UAE: How should financial services groups prepare for UAE corporate tax?
There are a number of areas financial services groups should consider as they prepare for the introduction of UAE corporation tax, including: (1) IFRS9 and loan provisioning; (2) deferred tax; and (3) the investment management exemption. If you want to know more, see our summary and meet our team dedicated to supporting taxpayers in the UAE here.
Netherlands
Dutch Budget Day 2022 from a Deals tax perspective
The Dutch government will present their Tax Plan 2023 on 20 September 2022, and we anticipate tax law changes which could be relevant for groups investing in or through the Netherlands. Join our virtual seminar, in which we will share our views on the Tax Plan from a deals tax perspective, and provide practical insights on its potential impact on Dutch structures. We’ll also provide an update on other items, such as the pending transparency legislation regarding the Dutch transparency rules. Join online by using this link.
Key EU members reaffirm their commitment to implement in 2023
On 9 September, at the informal ECOFIN meeting in Prague, the finance ministers of France, Spain, Italy, the Netherlands and Germany issued a joint statement. In it, they reaffirmed their commitment to implement Pillar 2 in 2023, even if unanimity could not be reached among EU member states. They also stated their commitment to completing the work on Amount A of Pillar 1, with the objective of signing a multilateral convention on the matter by mid-2023.
Supreme Court asks CJEU on interpretation of Lexel judgement
On Friday 2 September 2022, the Dutch Supreme Court put preliminary questions to the CJEU in the PwC case of the Belgian coordination centre, where the interest deduction in the Netherlands in respect of an acquisition debt was at issue. The questions concern the interpretation of the CJEU judgement in the Lexel case with respect to article 10a of the Dutch Corporate Income Tax Act (CITA). The Supreme Court decided to stay the proceedings in this case pending the answers of the ECJ. In this article, we explain which preliminary questions the Supreme Court has raised and what consequences the line of reasoning of PwC may have for your company. Read more in this PwC tax news item.
New Zealand
Omnibus Taxation Bill introduced to Parliament
The Government recently introduced the Taxation (Annual Rates for 2022-23, Platform Economy, and Remedial Matters) Bill (“the Bill”) to Parliament. The Bill as originally introduced attracted significant attention for its proposals relating to GST for managed funds, and the flow-on impact on KiwiSaver balances. The Government subsequently announced that the proposals would not be going ahead, and the Bill was withdrawn and subsequently reintroduced to Parliament on 8 September. In addition to the now scrapped proposal referred to above, the Bill includes a number of other significant tax changes. In this Tax Tips, we discuss the main proposals.
South Africa
PwC Synopsis - August 2022
The latest edition includes: 1) the Transfer Pricing and Customs Valuation Series: Article 1; 2) VAT apportionment and securitisation; and 3) SARS watch.
Spain
Key EU members reaffirm their commitment to implement in 2023
On 9 September, at the informal ECOFIN meeting in Prague, the finance ministers of France, Spain, Italy, the Netherlands and Germany issued a joint statement. In it, they reaffirmed their commitment to implement Pillar 2 in 2023, even if unanimity could not be reached among EU member states. They also stated their commitment to completing the work on Amount A of Pillar 1, with the objective of signing a multilateral convention on the matter by mid-2023.
Switzerland
For the latest updates on current topics, see this PwC Switzerland Insights page.
Switzerland publishes draft Pillar Two ordinance for public consultation
The Swiss Federal Council recently launched a public consultation concerning the draft ordinance laying out the material aspects of the Pillar Two implementation in Switzerland. Interested parties have until 17 November to submit comments to the Swiss administration. Read more in this PwC Tax Insights.
Taiwan
Taiwan Tax Update August 2022
This edition includes: 1) Ministry of Finance announced draft amendments to Income Tax Act; and 2) profit-seeking enterprises impacted by COVID-19 can be exempt from 2022 provisional income tax filing.
Uruguay
Uruguay proposes to amend how foreign passive income without substance is taxed
Uruguay's Ministry of Economy and Finance recently published a public consultation until 15 August, on a draft bill that will be submitted to Congress in September. The draft bill includes measures to comply with certain commitments agreed with the European Union (EU) in 2021. In particular, Uruguay committed to amend its corporate income tax (CIT) rules to address certain aspects identified by the EU Code of Conduct Group as potentially tax harmful. Read more in this PwC Tax Insights.
US
Inflation Reduction Act
The Inflation Reduction Act was signed into law by President Biden on 16 August.
- US minimum tax on book income and Pillar 2
Find out what implications the introduction of the Inflation Reduction Act (IRA) could have for Pillar 2 and your business. Read more. - Inflation Reduction Act: Considerations for tax-exempt organisations
This PwC Insight focuses on a few key provisions of interest to exempt organisations. - Book minimum tax - select international tax considerations
One key-revenue raising provision of the Act is a 15% minimum tax based on adjusted financial statement income (book minimum tax, or BMT). This PwC Insight focuses on certain international aspects of the BMT. - Tax Readiness: Overview of the Inflation Reduction Act
How will the tax provisions in the Inflation Reduction Act impact organisations? Watch the replay from 25 August where our panel of specialists discuss the bill's tax incentives, 15% book minimum tax (BMT), and 1% stock buyback excise tax. - The Inflation Reduction Act and your business
The Inflation Reduction Act (IRA) is the largest climate legislation in US History. PwC lays out ESG opportunities and climate considerations for companies. Read more.
Treasury defers applicability dates for foreign currency guidance
Treasury and the IRS recently issued Notice 2022-34, which states plans to defer the applicability date of certain final Section 987 regulations and certain related regulations by an additional year, now to tax years beginning after 7 December 2023. These regulations previously had been deferred under prior Notices, including most recently under Notice 2021-59. Read more in this PwC Tax Insights.
IRS provides penalty relief for certain 2019 and 2020 tax returns
The IRS has issued Notice 2022-36 providing relief for certain individual and business taxpayers affected by the COVID pandemic from certain failure-to-file penalties and certain international information return (IRR) penalties with respect to tax returns for tax years 2019 and 2020 (which were due in 2020 and 2021) filed on or before 30 September 2022. Read more in this PwC Tax Insights.
Section 871(m) dividend equivalent rules phase-in period extended
The IRS recently issued Notice 2022-37, providing an extension of the transition relief phase-in period of the regulations under Section 871(m) for select transactions through 2024. Notice 2022-37 extends a phase-in period that previously had been provided for certain provisions of the Section 871(m) Regulations and permits withholding agents to apply the transition rules from Notice 2010-46 in 2023 and 2024. Read more in this PwC Tax Insights.
Economic nexus adopted for New York City business corporation tax and NYC PTET now effective for 2022
New York Governor Kathy Hochul recently signed legislation (S9454/A10506) adopting an economic nexus threshold of $1 million of New York City (NYC) receipts for purposes of the NYC business corporation tax, for tax years starting on or after 1 January 2022. As a result, the NYC nexus provisions mirror those of New York State. The legislation also made the recently enacted elective NYC pass-through entity tax (PTET) effective retroactively to tax years beginning on or after 1 January 2022. Read more in this PwC Tax Insights.
Policy on Demand series
- Chairman Camp on year-end tax bill
In this episode from 6 September, Chairman Dave Camp shares his insights on what Congress must accomplish during its tightened work period leading up to the midterm elections and how the economy and the outcome of the elections will impact the prospects for a year-end tax bill. - Week in Review
- In this episode from 16 September, Rohit Kumar shares his insights on the declining prospect for a year-end tax bill and whether there is the requisite consensus to pass a bill to delay the Section 174 capitalization provision. He advises clients to pay close attention to the continuing resolution process to fund the federal government.
- In this episode from 9 September, Will Morris shares his insights on the departure of Pascal Saint-Amans, the OECD’s head of tax. He also addresses the question he is receiving the most: What does Pascal’s departure mean for the Pillar One and Two project?
- In this episode from 2 September, Janice Mays shares her insights on how companies are assessing the impact of the Inflation Reduction Act. She also addresses questions she is receiving regarding whether provisions left out of the Act may be enacted later this year. She advises companies to be strong advocates for delay of the Section 174 capitalization provision.
- In this episode from 26 August, Karl Russo shares his insights on inflation going forward and the potential economic impact of President Biden’s student loan forgiveness program. He also addresses how companies should focus on potential benefits from the clean energy provisions in the Inflation Reduction Act.
Cross-border tax talks
- The Metaverse and Tax: A non fungible discussion
In this episode from 13 September, Doug McHoney (PwC Global International Tax Services Leader) welcomes Rebecca Lee, International Tax Services Principal in the Washington National Tax Practice for her sixth visit. Doug and Rebecca dispel myths associated with cryptocurrency and the metaverse. They break down definitions of some of the trickiest metaverse jargon, the tax implications of metaverse transactions, and where we are heading in the near future. - Let's make a Deal: What’s behind Pillar Two?
In this episode from 30 August, Doug McHoney (PwC Global International Tax Services Leader) welcomes back podcast regular Calum Dewar (Principal, International Tax Services) to discuss Pillar Two. This time Doug and Calum dive deep into the deals area, including the Pillar Two tax consequences of specific deal transactions and structures. They also talk about the recent release of both the South Korea and UK Pillar Two draft rules.
Tax Readiness webcast series:
- Tax Readiness: ESG Tax Incentives in the Inflation Reduction Act
Join our panel of specialists on Tuesday 4 October at 6pm, as they discuss the various tax and investment opportunities and how companies should consider these credits as a part of their broader ESG goals and strategy. Register here. - Tax Readiness: Q3 financial reporting considerations
Register here to join us on Wednesday 28 September at 7pm, as our panel of Tax Accounting Services (TAS) specialists takes a deep dive into relevant tax accounting matters and recent tax developments. On this webcast, we will discuss key financial reporting considerations for the IRA and CHIPS Act as well as the current economic environment. - Tax Readiness: How does current law interact with Pillar Two?
In this webcast held on Thursday 18 August, our specialists discussed the significant interplay between current US tax law and Pillar Two. Watch the replay where our panel talk about the latest developments, and how, for example, Pillar Two will interact with GILTI and the foreign tax credit. - Tax Readiness: Sourcing and Supply Chain Disruption
In this webcast taking place on Wednesday 31 August at 8pm, our specialists will discuss global sourcing of products and services being influenced by external market factors and how companies can take a solution oriented approach through cost proofing, simplification, and digital transformation. Register here.
You can sign up for Tax Alerts issued by the US to be emailed to you. Subscribe using the link on this page and a back catalogue of previous webcasts and other resources are available on our US tax reform hub here.