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Two weeks to 2 February 2024

Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK. 


Talking Tax - January 2024
We are delighted to bring you the January edition of Talking Tax, with a range of views and insights from specialists across our business including: 

Spring Budget 2024: Reactions Webcast
UK Chancellor Jeremy Hunt will deliver his Spring Budget on Wednesday 6th March. Register to join our webcast taking place at 9am on Thursday 7 March, where we will discuss what the announcements could mean for individuals, employers and businesses.

Lords Committee publishes report on Finance Bill 2023-24 
The House of Lords Economic Affairs Committee appoints a Finance Bill-Sub-Committee each year to inquire into the draft Finance Bill. The Sub-Committee’s inquiries focus on technical issues of tax administration, clarification, and simplification rather than on rates or incidence of tax. The Economics Affairs Finance Bill Sub-Committee has published its report, which covers the Government’s draft Finance Bill 2023-24 which was published on 18 July 2023. The report covers its reforms on Research and Development (R&D) tax relief, the requirement for businesses to provide additional information to HMRC, measures dealing with promoters of tax avoidance, and the doubling of the maximum prison term for tax fraud. Read more in this press release.

HMRC releases its latest Transfer Pricing and Diverted Profits Tax statistics covering the period 1 April 2022 to 31 March 2023
HMRC has released its latest Transfer Pricing (TP) and Diverted Profits Tax (DPT) statistics covering the period 1 April 2022 to 31 March 2023, which show that transfer pricing remains a key priority for HMRC. Given the very significant yield resulting from TP enquiries, HMRC is likely to continue to deploy significant resources into TP and international tax risk. It is therefore no surprise that we’re currently seeing an increase in activity from HMRC in this space. APAs and MAPs continue to provide effective mechanisms for increasing cross border tax certainty. HMRC has said that it intends to increase the number of Profit Diversion Compliance Facility nudge letters it issues. Read more in this PwC article.

HMRC Manual & guidance updates 
The following changes have recently been made by HMRC following review:

  • Claiming Double Taxation Relief for companies and other concerns
    HMRC updated this guidance on 22 January to include a new paragraph about the ability to obtain treaty relief on royalties without prior HMRC authorisation (and to insert some other useful links). The update does not change existing law or practice, as this has long been the case, but merely highlights the distinct treatment of royalties in this regard.
  • Transfer Pricing and Diverted Profits Tax statistics 2022 to 2023
    As reported above, on 25 January 2024, HMRC released the latest publication of its Transfer Pricing (TP) and Diverted Profits Tax (DPT) statistics. 
  • International Manual
    • INTM485023 - HMRC published a new chapter within their International Manual ‘Transfer Pricing: Operational guidance’ called ‘Risk Allocation’ on 26 January. This manual then refers to another new chapter called ‘Transfer pricing operational guidance: Accurate delineation of the actual transaction: Risk’ (link to this chapter is here) which provides detailed guidance on HMRC’s interpretation and proposed application of the six-step risk framework, as outlined in the OECD Transfer Pricing Guidelines (“TPG”).
  • International Exchange of Information Manual
    • IEIM660110 - Special reduction - Content updated 23 January, as legislation is being replaced.
    • IEIM403140 - Due Diligence: New Individual Accounts: Self Certifications - small update to guidance on 22 January
    • IEIM403440 - Due Diligence: New Entity Accounts: Reportable Person - small update to guidance on 22 January

Case law update

  • Post-Prudential group litigation - DTR on foreign dividend income of portfolio holders
    The Upper Tribunal decision in this case, [2024] UKUT 00023 (TCC), concerning double taxation relief (DTR) on foreign dividend income from portfolio holdings (ie where the shareholder holds less than 10% of the company’s share capital) was given on 25 January 2024.  There has been a long history of litigation concerning the UK tax treatment of foreign tax on such dividends. It is now established that the UK tax provisions breached EU law in failing to make appropriate provision for DTR. The appeals considered in this judgment concern the procedural methods by which the taxpayers could or should have reclaimed the tax which HMRC accepted was overpaid and certain other procedural issues. Certain substantive issues also arise as to the amount of relief available.

Treaty updates

  • UK-Norway Tax Treaty
    Synthesised text of the Multilateral Instrument and the 2013 UK-Norway Double Taxation Convention has been added to this HMRC page.

Double Taxation Treaty Passport Scheme register
HMRC has updated the register of overseas corporate lenders who are passport holders for Double Taxation Relief on UK loan interest. The register has been updated as of 2 February with 241 additions, 18 amendments and 124 removals.


Pillar Two

  • EU infringement action over Pillar Two implementation
    The European Commission has started infringement procedures for 9 Member States – Estonia, Greece, Spain, Cyprus, Latvia, Lithuania, Malta, Poland and Portugal – that did not communicate national measures transposing the Directive by the deadline of 31 December 2023.

Germany and Poland challenged on DAC7 implementation 
The European Commission has launched infringement proceedings against Germany and Poland on the implementation of the seventh EU Directive on Administrative Cooperation in Tax Matters. DAC 7 introduced, as of 1 January 2023, new tax transparency rules for transactions on digital platforms so Member States can better identify situations where tax should be paid. In addition, as of 1 January 2024, it also strengthened rules for joint audits between Member States in the area of taxation in general. All Member States had to notify complete transposition of those new rules on joint audits into their national legislation and inform the Commission before the end of 2023. Germany and Poland have failed to do so.

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 29 January  includes: 1) OECD Release Updated Assessment of Impact of Global Minimum TaxCFE Publishes Statement on European Corporate Tax Reform (BEFIT); 2) EU Infringement Action Against Member States on Pillar 2 Implementation; 3) UN Framework Convention: Website Launch & Structure Update; 4) EU Agreement on AML Reform; and 5) CFE’s 2023 Tax Policy Report. Visit their latest news page here.
  • CFE Opinion Statement on the EU Commission HOT Proposal
    CFE Tax Advisers Europe has issued an Opinion Statement on the EU Commission Proposal on establishing a Head Office Tax system for micro, small and medium sized enterprises and amending Directive 2011/16/EU.


Pillar Two

  • Pillar Two: how safe is the safe harbour?
    In this Cross-border Tax Talks episode, Doug McHoney (PwC’s International Tax Services Global Leader) is joined by Steve Kohar (PwC international tax partner based in New York, and a former adviser for the OECD Center for Tax Policy and Administration). Doug and Steve discuss the OECD’s latest Pillar Two Administrative Guidance, which was published on 18 December 2023 and primarily covers the transitional country by country Safe Harbor. More specifically, they address how jurisdictions will implement the guidance, purchase price accounting adjustments, consistent use of data, hybrid arbitrage arrangements, the allocation of CFC taxes, and whether the OECD will provide additional guidance in 2024.

OECD releases statistics from the International Compliance Assurance Programme (ICAP) 
The OECD Forum on Tax Administration released the first aggregated statistics from the International Compliance Assurance Programme (ICAP) for a multilateral risk assessment of a Multinational Enterprise (MNE) group’s key international tax risks. Portugal has confirmed its support for greater tax certainty by being the latest tax administration to join ICAP, bringing the total number of participating tax administrations to 23. The next three deadlines for MNEs interested in applying for ICAP are: 31 March 2024, 30 September 2024 and 31 March 2025. Read more in this OECD item.

Latest updates, the text of the BEPS Convention, the explanatory statement, background information, database, and positions of each signatory and parties are available at

Other territories


International Tax News - January 2024 
International Tax News is designed to help multinational organisations keep up with the constant flow of tax developments. Among the topics featured in this month's edition are: 1) Singapore introduces changes to its tax regime for gains on disposal of foreign assets; 2) Liechtenstein, Bulgaria, and Italy complete implementation of Pillar Two; 3) Belgium makes changes to its CFC regime; and 4) India amends Safe Harbor Rules for international transactions.

PwC Annual Global Crypto Tax Report 2024
PwC's Global Crypto Tax Report 2024 provides detailed analyses of the tax treatment of digital assets in 59 jurisdictions. The top three tax trends explored are: 1) crypto tax reporting (e.g. the Crypto Asset Tax Reporting Framework) has become a global phenomenon; 2) the tax implications of real-world asset tokenisation need case-by-case consideration; and 3) the transition to tokenised payments may have unforeseen tax consequences. Read more here.

Digital tax byte
The latest edition in our series of brief insights into the workings of the UK and supranational bodies reviewing the taxation of digitalisation of business. In this edition, from 29 January, we cover:

  • the European Commission's last minute publication of some Frequently Asked Questions before the commencement of many Member State Pillar Two regimes following the Minimum Tax Directive;
  • a failed challenge to the EU's Directive before the Court of Justice and revised estimates of the impact coming from the OECD;
  • the European Commission's announcement of the coming into force of new cross-border VAT reporting measures;
  • the extension of the deadline in Germany for complying with various requirements of the rules implementing DAC7 on reporting by digital platforms (plus action from the European Commission on Germany and Poland for failure to communicate implementation); 
  • India has also issued the third set of guidelines on its 1% e-commerce Withholding Tax; and
  • the Australian Tax Office has published an updated draft ruling on software taxation.

Environmental, Social and Governance (ESG)

  • LinkedIn audio - Reporting matters: how does transparency build trust?
    With the UK facing complex market challenges, there is an increasing demand from stakeholders for organisations to provide transparent, clear and insightful reporting. Why does reporting matter and how can transparency help build trust? At 12pm on Friday 16 February, Hemione Hudson (Head of Audit at PwC UK), Jon Mortimore (CFO at Dr Martens) and Claire Hawkins (Director of Corporate Affairs and Investor Relations at Phoenix Group) will discuss these questions and more. You and your clients can register here.

Australia updates hybrid mismatch rule guidance
New guidance has been released by the Australian Taxation Office to explain the country's hybrid mismatch rules and their application. In particular, the new guidance provides an overview of the various changes made to those rules by the Treasury Laws Amendment (2020 Measures No.2) Act 2020, which received Royal Assent on 3 September 2020.

here for latest updates.

Arm’s length character of interest rates on intercompany loans 
In recent years, the Belgian Tax Authorities (BTA) have intensified their focus on the (intercompany) financing arrangements of MNE groups.  Some recent Belgian case law offers valuable insights into the approach that the BTA and the Courts adopt when assessing the arm’s length character of intercompany financing conditions. Read more in this PwC article.

2024 Annual tax filing and remittance deadlines for corporations
Canadian corporations are required to file annual income and capital tax returns (due six months following each taxation year‑end), and to meet several other Canadian annual filing and remittance deadlines. This PwC Tax Insights outlines some of the more common compliance requirements to be considered at this time of year. Others also may apply (e.g. T4A information return to report certain benefits to shareholders). Some of the compliance requirements discussed also apply to individuals, trusts and partnerships.

China’s State Taxation Administration publishes its 2022 APA Annual Report
China’s State Taxation Administration (STA) recently published the “China Advance Pricing Arrangement Annual Report (2022)” (2022 Annual Report), which contains statistical data and analysis of the advance pricing arrangement (APA) cases from 2005 to 2022. According to the 2022 Annual Report, the STA signed 19 unilateral APAs (including three renewals) and 15 bilateral APAs (including seven renewals). In total, 34 APAs were signed during 2022, reaching a record high from 2005 to 2022. Similar to the previous years, the manufacturing industry accounted for the majority of APAs signed. Read more in this PwC Tax Insights.

Hong Kong and Croatia sign comprehensive double tax treaty
The Secretary for Financial Services and the Treasury, on behalf of the Hong Kong Special Administrative Region Government, signed a comprehensive double tax treaty (treaty) with Croatia in Hong Kong on 24 January 2024. Under the new treaty, any tax a Hong Kong company pays in Croatia in accordance with the treaty, whether directly or by deduction, will be allowed as a credit against the tax payable in Hong Kong in respect of the same income, subject to the provisions of the tax laws of Hong Kong. The new treaty also provides: 1) Croatia's withholding tax rates for Hong Kong residents on dividends, interest and royalties will be capped at 5 per cent; and 2) profits from international shipping transport earned by Hong Kong residents arising in Croatia will not be taxed in Croatia. This treaty will come into force after the completion of ratification procedures by both jurisdictions.  Read more in this press release.

Update: “Tainting effect” of trading activity for trade tax purposes also for asset-management partnership
A constitutional complaint has been launched against a Supreme Tax Court decision that held that losses from a genuine business activity of an asset-management civil-law partnership (GbR) can lead to the reclassification of the otherwise asset-managing (non-business) activity as trading income if the de minimis limit is exceeded. The matter is currently pending before the Federal Constitutional Court (case reference no. 2 BvR 2113/22). Read more in this PwC blog.

German Federal Fiscal Court decides on discrimination of foreign real estate funds under the German Investment Tax Act (InvStG) 2004 following up on European Court of Justice (ECJ) 
On 27 April 2023, the ECJ had issued its judgment (L Fund (C-537/20)) on an appeal pending before the Federal Fiscal Court of Germany (Bundesfinanzhof, or BFH) in respect of the tax exemption provided for under section 11(1) sentence 2 of the German Investment Tax Act for German real estate funds (in the version applicable until 31 December 2017). The question of the appeal was whether the failure to grant the exemption constitutes discrimination against foreign real estate investment funds and violates the free movement of capital principle. After the BFH suspended the proceedings and asked the ECJ for a preliminary ruling, the ECJ decided that the German law was discriminating against foreign funds and therefore an exemption should also be granted to comparable foreign funds. On 1 February 2024, after having held a court hearing and reflected on the guidance issued by the ECJ, the BFH published its decision of 11 October 2023 (I R 23/23). The decision confirms the discrimination of foreign funds and therefore the exemption should be granted in the concrete case in the same way as for the comparable German fund type. It rejected all the German Ministry of Finance‘s arguments against a discrimination. Read more in this PwC alert.

Hong Kong
Hong Kong tax review 2023
Hong Kong remains determined to enhance international tax cooperation and competitiveness amid challenges. PwC’s Hong Kong Tax Review 2023 summarises the significant tax updates in 2023 and previews the upcoming tax developments in 2024.

Hong Kong and Croatia sign comprehensive double tax treaty
The Secretary for Financial Services and the Treasury, on behalf of the Hong Kong Special Administrative Region Government, signed a comprehensive double tax treaty (treaty) with Croatia in Hong Kong on 24 January 2024. Under the new treaty, any tax a Hong Kong company pays in Croatia in accordance with the treaty, whether directly or by deduction, will be allowed as a credit against the tax payable in Hong Kong in respect of the same income, subject to the provisions of the tax laws of Hong Kong. The new treaty also provides: 1) Croatia's withholding tax rates for Hong Kong residents on dividends, interest and royalties will be capped at 5 per cent; and 2) profits from international shipping transport earned by Hong Kong residents arising in Croatia will not be taxed in Croatia. This treaty will come into force after the completion of ratification procedures by both jurisdictions.  Read more in this press release.

Investing in Ireland: Issue 57
Our latest edition explores the newly released IDA Ireland 2023 results, Ireland’s semiconductor industry and Ireland’s gaming sector, all from a foreign direct investment (FDI) perspective.

Revenue eBrief No. 030/24 
The Irish Revenue has updated Tax and Duty Manual 04-06-04 - Leasing of Machinery or Plant – General Principles of Taxation on the leasing of machinery or plant, to reflect the general legislative framework applicable when calculating taxable profits and gains related to leases of machinery or plant following the commencement of Finance (No. 2) Act 2023 on 1 January 2024.

Main changes regarding incentives for businesses provided for by the Stability Law 2024 and related provisions
Among the changes introduced by the Budget Law on 30 December 2023 regarding incentives for businesses, were: i) the definition of a national budget for the SEZ tax credit applicable for 2024; ii) the refinancing of the “Nuova Sabatini” pursuant to art. 2 of Legislative Decree 69/2013; iii) the refinancing of Development Contracts relating to industrial development projects pursuant to art. 1 co. 253 – 254 of Law 213/2023; iv) the extension for the years 2024 and 2025 of the tax credit for the purchase of paper in favour of newspaper and periodical publishing companies; v) the new regulation about the tax credits for film and audiovisual production companies; and vi) introduction of the prohibition of offsetting in case of tax debts recorded in the register for collection exceeding 100,000 euros. This PwC blog provides a brief analysis of these changes.

Italy imposes new deadline for the preparation of transfer pricing documentation
Italy published Law No. 213 on 30 December 2023 (2024 budget law), enacting some tax measures and changes. Among these changes, the 2024 budget law changed the term of the yearly tax return filing, impacting the deadline for the preparation of transfer pricing documentation for penalty protection purposes. As detailed in this PwC Tax Insights, for taxpayers with a fiscal year ending on 31 December 2023, the new deadline is 30 September 2024 instead of 30 November.

Government’s Bill to Amend Presidential Decrees of Tax Laws 
Following the amendment of tax laws at the end of December 2023, the Ministry of Economy and Finance (MOEF) announced the government’s bill to amend the Presidential Decrees of these tax laws on 23 January 2024 to seek public comments thereon until 14 February  2024. The government’s bill will be proclaimed at the end of February 2024 after being finalised in the cabinet meeting. If approved, most of the proposed amendments to the Presidential Decrees will take effect from the date the amended rules are proclaimed or from the fiscal year in which the effective date falls, unless otherwise specified. This PwC alert provides a brief summary of the most significant changes contained in the government’s bill.

Middle East
Pillar Two Guide for Multinational Enterprises 
Whilst the majority of jurisdictions in the Middle East are yet to publicly announce how and when they will implement the Pillar Two rules, dome have already taken steps towards implementation. Read more in this PwC news item.

CRS Overview and Latest Developments
The Inland Revenue Authority of Singapore recently updated the List of Participating Jurisdictions for the Common Reporting Standard. Kenya and Thailand have been added and Niue has been removed.

South Africa
New beneficial ownership tax disclosure requirements for trusts
Trusts registered in South Africa are required to comply with the recent amendment to the Tax Administration Act No. 28 of 2011, whereby certain additional disclosures are required to be made to the South African Revenue Service in relation to the ‘beneficial owner' of the trust. Read more in this PwC alert.

For the latest updates on current topics, see this PwC Switzerland Insights page.

Switzerland publishes updated safe harbour interest rates for 2024
The Swiss Federal Tax Administration (SFTA) has published two circulars outlining the safe harbour interest rates applicable to shareholder and intercompany loans, denominated in Swiss Francs and foreign currencies, applicable for 2024. The Swiss Franc transaction safe harbour interest rates included in this year’s circular remain largely unchanged, whilst most foreign currency transaction rates have decreased compared to the interest rates that were applicable for 2023. Swiss taxpayers can deviate from these interest rates so long as they are able to demonstrate that the interest rates that they apply are in line with the arm’s length principle – in practice, this means that the interest rates must be supported by a transfer pricing study. Read more in this PwC blog.

House clears bipartisan business and family tax relief bill for Senate action 
On 31 January 2024, the House voted 357 to 70 to approve H.R. 7024 (the Tax Relief for American Families and Workers Act of 2024) which reflects the bipartisan, bicameral tax framework agreement announced on 16 January by House Ways and Means Committee Chairman Jason Smith (R-MO) and Senate Finance Committee Chairman Ron Wyden (D-OR). H.R. 7024 was earlier approved 40 to 3 on 19 January by the Ways and Means Committee. The Senate must now determine when and under what circumstances it will begin consideration of the House-passed Tax Relief for American Families and Workers Act of 2024. It remains unclear if the Senate will act on it before the two-week recess scheduled to begin the week of 12 February. Read more in this PwC Tax Insights. Also see the ‘What to expect as House takes up tax bill’ episode from our Policy on Demand series here.

2023 year in review and looking forward to 2024
Information reporting and withholding requirements continued to be a key tax issue both in and outside the United States during 2023 and additional changes should be expected. The IRS and tax authorities outside the United States have updated various forms used for information reporting, made a number of administrative changes, and issued proposed guidance for digital asset reporting. Read more in this PwC alert.

Policy on Demand series 

  • What to expect as House takes up tax bill 
    Taxpayers are watching closely this week, as the tax bill could be taken up by the House as soon as Tuesday. Adjacent to conversations about the bill’s details are questions about possible political implications. Watch here.
  • Election Watch 2024
    In this episode from 24 January, Rohit Kumar, Janice Mays, and Chairman Dave Camp kick-off Election Watch 2024 after the first major election events of the year. They discuss key takeaways of the Iowa Republican caucus, the New Hampshire Presidential Primary, and what comes next.
  • Week in Review
    • 2  February – The tax package restoring key business tax provisions passed the House with overwhelming bipartisan support, but faces challenges in the Senate. The cost of the bill is almost fully offset, indicating that Congress is concerned about the growing budget deficit. Watch here.
    • 26 January –  This week, Janice Mays talks about the bipartisan tax bill and stresses now is the time for companies to “double down” on conveying tax policy priorities to House and Senate Republicans. Watch here.

Tax Readiness webcast series

  • Tax Readiness: How trusted tax data powers reporting and strategic business planning
    How much time does your tax team spend wrangling with data? Many companies are looking to “standardise” processes, but this may be difficult if the data is so disparate and not well understood. Join our specialists on Tuesday 27 February at 7pm, as they discuss actions to build trusted, accessible data for complex compliance challenges and strategic C-suite initiatives, yielding high-value results for years to come. Register here.
  • New year, new updates on US international and global tax
    In this webcast from 23 January, our panel of PwC international tax specialists shared their insights on recent and upcoming guidance on international tax issues facing multinational corporations. The panel discussed guidance around the OECD’s Pillar Two initiative, the foreign tax credit (FTC), the corporate alternative minimum tax (CAMT), and previously taxed earnings and profits (PTEP). Watch the replay here.
  • Tax Readiness: 2024 Tax Policy Outlook
    Watch this webcast replay from 17 January, where our panel review our 2024 Tax Policy Outlook, outline the upcoming tax policy decisions to be made and delve into the significant hurdles faced by business leaders. This includes strategies on effectively engaging with policymakers and the public to garner support for tax policies that foster future economic growth, business investments, and job creation.

Further information
You can sign up for Tax Alerts issued by the US to be emailed to you. Subscribe using the link on this page.  A back catalogue of previous webcasts and other resources are available on our US tax reform hub here.