Two weeks to 21 June 2024
Welcome to the latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
UK
Pillar Two
- OECD publishes guidance
The OECD/G20 Inclusive Framework on BEPS (IF) published its fourth set of Administrative Guidance (the guidance) on the Pillar Two rules on 17 June 2024, intending to clarify the operation of the GloBE rules. The guidance will be incorporated into the Commentary to the GloBE rules, which was updated in April 2024 to reflect the previous sets of Administrative Guidance. While elements of the guidance are undoubtedly helpful, in many cases that is vitiated by a corresponding increase in complexity. For more information on this, see our PwC tax policy alert and Tax Policy on Demand episode titled “More clarity, more restrictions in OECD's latest guidance package” where Stewart Brant, Director, PwC’s Global Tax Policy Services and Pat Brown, PwC’s Washington National Tax Services Co-Leader, review this latest guidance plus developments relating to Amount B of Pillar One.
Case law update
Another Court of Appeal decision regarding unallowable purpose - JTI case
The Court of Appeal’s decision in the JTI case was released on 13 June, quick on heels of its recent decisions on the same topic in BlackRock and Kwik-Fit. The taxpayer's appeal was dismissed, with the CoA agreeing the taxpayer had an unallowable purpose and that the FTT was entitled to conclude that the debits were wholly attributable to it.
HMRC Manual & guidance updates
- Corporate Intangibles Research and Development Manual - updated 19 June
- CIRD82100: R&D tax reliefs: categories of qualifying expenditure: overview - Paragraph deletion.
Loans to participators - CIOT makes submission to HMRC
The Chartered Institute of Taxation (CIOT) has sent a proactive submission to HMRC on the application of CTA 2010 s459 – Loans to Participators Charge on Upstream Loans. Specifically, "members have told us is causing some issues in due diligence on commercial share acquisitions, typically in buyout scenarios where a company lends cash to its parent company, referred to as ‘upstream loans’".
EU
EU public Country-by-Country reporting tracker
This PwC tracker offers a comprehensive overview of the Regulation across the 27 individual EU member states, including where the local reporting and filing requirements as well as available exemptions and deferrals, often diverge from the EU Directive. The tracker is designed to help tax teams navigate through this complexity in order to make informed decisions and deliver the best outcomes for their business and stakeholders.
European Commission starts infringement action against Germany, Hungary, Poland and Romania for failing to exchange platform information under DAC7
As reported previously, the European Commission announced its decision to open an infringement procedure by sending a letter of formal notice to Germany, Hungary, Poland and Romania for failing to exchange timely information on income earned by individuals and companies through the use of online platforms under DAC7. Read more in our latest digital tax byte from 11 June.
Programme of the Hungarian presidency of the EU Council
Hungary holds the presidency of the EU Council in the second half of 2024, from 1 July to 31 December. On 18 June, Hungary presented its work programme with its priorities for the second semester of the year. Regarding taxation, Hungary’s priorities include: fighting tax evasion, ensuring legal certainty for taxpayers, and supporting the international engagement of the EU. The programme states that Hungary sees an “opportunity to enhance the competitiveness of European businesses through digitalization, the efficient use of information, and simplification.”
Council of the EU adopts regulation on use of supercomputing in AI development
The Council has adopted an amendment to the regulation on the European High-Performance Computing (EuroHPC) joint undertaking to expand its objectives to include the development and operation of ‘AI factories’. AI factories are entities which provide an AI supercomputing service infrastructure. The amended regulation will make the EU’s supercomputing capacity further available for innovative European start-ups and SMEs to train their AI models and develop their projects. This is the last step in the decision-making procedure. Read more in this press release.
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 19 June includes: 1) European elections: ongoing negotiations on new EU leadership; 2) U.N. publishes framework tax convention reference terms; 3) Opinion of AG Kokott in Case C-432/23: F, Ordre des Avocats du Barreau de Luxembourg on professional secrecy of a lawyer under DAC; 4) OECD Guidance on Report on Amount B of Pillar One & Application of Pillar Two; and 5) Industry & tax professionals call for clearer VAT guidance on charitable donations. Visit their latest news page here.
OECD
Pillar One and Pillar Two
- OECD releases guidance relating to Pillar Two GloBE and Pillar One Amount B
As noted above, on 17 June the OECD/G20 Inclusive Framework on BEPS (IF) published its fourth set of Administrative Guidance (the guidance) on the Global Anti-Base Erosion Model Rules (GloBE rules) of Pillar Two, intending to clarify the operation of the GloBE rules. The guidance will be incorporated into the Commentary to the GloBE rules, which was updated in April 2024 to reflect the previous sets of Administrative Guidance. While elements of the guidance are undoubtedly helpful, in many cases that is vitiated by a corresponding increase in complexity. For more information on this, see our PwC tax policy alert and this Tax Policy on Demand episode titled “More clarity, more restrictions in OECD's latest guidance package” where Stewart Brant, Director, PwC’s Global Tax Policy Services and Pat Brown, PwC’s Washington National Tax Services Co-Leader, review this latest guidance plus developments relating to Amount B of Pillar One. - Pillar Two Potpourri: Where is this heading?
In this Cross-border tax talks episode from 12 June, Doug McHoney (PwC’s International Tax Services Global Leader) is with Pat Brown, Washington National Tax Services Co-Leader, to discuss the complex state of international tax today and where the winds of Pillar Two are blowing. Doug and Pat bare their ankles and kick off the discussion with the state of international tax when Pat graduated law school. They cover the increasing complexity of tax regimes, before diving into Pillar Two, the Undertaxed Payments Rule (UTPR), qualified CbC reporting, business concerns and struggles, the United Nations’ role in international tax, and recently published Belgian Pillar Two registration requirements.
- Amount B of Pillar One
Accompanying the release of Pillar Two Guidance on 17 June, the OECD also released supplementary guidance on Amount B of Pillar One (the supplementary guidance) that includes definitions of ‘qualifying jurisdictions’ to apply the operating expense cross-check and data-availability mechanism. The supplementary guidance also includes a list of ‘Covered Jurisdictions’ (previously referred to as ‘Low-Capacity Jurisdictions’) within scope of the political commitment on Amount B. Read more in our PwC tax policy alert.
MLI
Latest updates, the text of the BEPS Convention, the explanatory statement, background information, database, and positions of each signatory and parties are available at https://oe.cd/mli.
United Nations
What’s going on at the UN? The draft Terms of Reference for negotiating a Framework Convention on International Tax Cooperation
As reported previously, the United Nations recently published a ‘Zero Draft’ Terms of Reference (ToR) for a UN Framework Convention on International Tax Cooperation (Framework Convention) for public consultation. The deadline for comments is 21 June 2024. The draft ToR sets out the basic parameters and mechanisms of a Framework Convention, including its proposed objectives, principles, substantive and structural elements, and timeframe for negotiations. It also identifies certain priority areas to be addressed in early protocols, including the taxation of the digitalised and globalised economy, cross-border services, and high net worth individuals. This PwC tax policy alert has now been published, along with this TaxBites podcast.
Other territories
International
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 11 June, we cover:
- the European Commission’s infringement action against Germany, Hungary, Poland and Romania for failing to exchange platform information under DAC7;
- New Zealand confirmation of the application of PE rules to a specific services situation;
- Canada’s proposal for online streaming services contribution.
Environmental, Social and Governance (ESG)
- LinkedIn Live: Three ways sustainability reporting can be transformative
Join PwC UK's LinkedIn Live broadcast on 25 June, where Mark Batten (Banking and Capital Markets Leader), Paolo Taurae (Non-financial Assurance Leader) and Gurpreet Kaur (Director) will be joined by guest speakers to explore how organisations can go beyond compliance and use reporting as a catalyst for change. Sign up to join the broadcast here. - How will the Corporate Sustainability Reporting Directive (CSRD) impact business?
More than three-quarters of companies believe that CSRD is or will lead company leaders to consider sustainability in decision making to a greater extent. Explore @PwC’s new Global CSRD survey of over 500 senior business execs. Read more.
Argentina
Argentina and Tunisia committed to expand and enhance bilateral relations
According to a 11 June press release published by the Argentine Ministry of Foreign Affairs, International Trade and Worship, officials from Argentina and Tunisia met to review the extensive bilateral agenda, with a view to deepening cooperation in various fields, including an agreement for a double tax treaty between the parties.
Austria
Draft legislation published on public CbCR
On 4 April 2024, the Austrian Federal Ministry of Justice published the consultation draft on the “Austrian Federal Act on the Publication of Country-by-Country Reports (CbCR) on Income Tax Information”. This legislation transposes Directive (EU) 2021/2101 amending the EU Accounting Directive regarding the publication of income tax information by specific companies and branches into Austrian law. Read more in this PwC alert.
Update on the suspension of the double tax treaty with Russia
The Austrian Ministry of Finance recently published a decree clarifying the treatment of income paid between residents of Austria and Russia following the suspension of several provisions of the countries’ tax treaty. See this update from PwC Austria.
Bangladesh
Bangladesh's budget features corporate tax cuts
The Bangladesh National Budget Speech for 2024-25 was delivered by Finance Minister Abul Hassan Mahmood Ali on 6 June 2024. Various changes to corporate income tax and value-added tax rates were announced, as well as a new top rate of personal income tax. Subject to compliance-related conditions, the rate of corporate income tax for non-publicly traded companies will be lowered to 25% from 27.5%; the rate for sole traders will be lowered to 20% from 22%; and the rate for companies listed through initial public offerings will be lowered to 20% from 22.5%. For further details, see this summary from PwC Bangladesh, which covers the key tax proposals announced in the budget.
Belgium
See here for latest updates.
Pillar Two rules in an M&A context: time for action!
Urgent action should be taken by all groups subject to the new mandatory Pillar Two notification, which is due by 13 July 2024. Also, in transactions, the potential impact of Pillar Two should be carefully considered in all deal phases. This PwC news item summarises some specific attention points regarding the impact of Pillar Two in the context of an M&A deal.
Canada
Canada enacts Pillar Two
On 20 June 2024, federal Bill C-69, an Act to implement certain provisions of the budget tabled in Parliament on 16 April 2024, received royal assent. Bill C-69 includes the legislation to implement the “Pillar Two” global minimum tax regime in Canada. Following enactment, an Income Inclusion Rule (IIR) and Domestic Minimum Top-up Tax (DMTT) are effective in Canada for fiscal years of a qualifying multinational group that begin on or after 31 December 2023 (ie for 2024 and later for calendar year taxpayers). The legislation had previously been released in draft on 4 August 2023. Read more in this PwC alert for the key changes.
Bill C-59 introduces EIFEL, environmental incentives, digital services tax, GAAR changes and more
In addition to the Pillar Two measures discussed above, the granting of royal assent to Bill C-59 on 20 June 2024 has also resulted in the introduction of a number of other key tax measures, including:
1) a 2% tax on the net value of equity repurchased by certain public corporations and other publicly listed entities;
2) the excessive interest and financing expenses limitation (EIFEL) regime;
3) the refundable investment tax credits for clean technology equipment and for carbon capture, utilisation and storage; and
4) the introduction of digital services tax (DST) legislation, with the coming-into-force date still designed to be flexible and subject to the state-of-play on Pillar One.
Read more in this PwC alert.
Government of Canada delivering tax fairness for every generation
On 10 June, Finance Minister Chrystia Freeland tabled a Notice of Ways and Means Motion in Parliament to deliver greater tax fairness and implement the changes in capital gains taxation announced in Budget 2024. As of June 25, 2024, the capital gains inclusion rate—the amount of capital gains that are taxable—will increase from one-half to two-thirds on capital gains realised annually above $250,000 by individuals and on all capital gains realised by corporations and most types of trusts.See this news release from the Department of Finance Canada.
China
Biden Administration announces tariff increases on Chinese imports from key sectors
President Biden announced on 14 May 2024 and published in the Federal Register on 22 May a series of tariff increases on USD 18 billion of imports from China under Section 301 of the Trade Act of 1974 (Section 301). The White House on the same day released a Fact Sheet setting forth the purpose and the details of the increases. Although Section 301 has created obstacles for Chinese exporters, they could adopt a series of strategies to cope with and mitigate its impact. Fully understanding its context and timely exploring the alternatives when facing the tariff challenges will be the key for the exporters to optimise their supply chain arrangements. Read more in this PwC alert.
Germany
ECJ: No fixed establishment of German company on the basis of service contract with Romanian group company
The European Court of Justice held that a German resident company (limited partnership) has no establishment for VAT purposes in Romania under a service contract with a Romanian group company. The court also addressed the question of the place of performance under the circumstances in the case referred. Further details can be found in this PwC Blog.
India
Interest income earned by an Indian PE from its overseas HO or fellow PEs is not taxable in India
The Delhi High Court has upheld the order of the Income-tax Appellate Tribunal that the interest income earned by the Indian permanent establishment (PE) of the taxpayer foreign bank from the overseas head office (HO) or other overseas PEs was not taxable in India as the PE, the HO and those other PEs were not separate legal entities but one person only and one person cannot earn profit from itself. The court also noted that the explanation provided under section 9(1)(v) of the Income-tax Act, 1961, according to which interest paid from the Indian PE of a bank to its overseas HO should be subject to tax in India in the hands of overseas HO, has no implication in the present case because the explanation came into effect from assessment year (AY) 2016-17 and the case pertains to AY 2003-04. Read more in this PwC alert.
In absence of FTS clause in the India-Thailand DTAA, technical service rendered to Indian AE, being in the nature of business income, are not-taxable in India in absence of PE in India
The Delhi bench of the Income-tax Appellate Tribunal observed that the technical services provided by the taxpayer in this case were in the nature of business income of the taxpayer and therefore taxable subject to the provisions of Article 7 of the India–Thailand Double Tax Treaty (treaty). The technical service rendered to Indian associated enterprises (AEs) by the taxpayer were therefore not taxable in the absence of a permanent establishment (PE) in India. The Tribunal added that the residuary provisions of Article 22 (other income) will not apply to items of income which can be classified under other provisions of the treaty. However, their taxability is subject to fulfilment of conditions mentioned therein. Read more in this PwC alert.
Ireland
Responses to participation exemption proposal published
Responses were published on 21 June to the Participation Exemption for Foreign Dividends Strawman Proposal that was published by Ireland’s Department of Finance on 5 April 2024. These include PwC Ireland’s response to the proposal here. Ireland currently still taxes dividends received from subsidiaries, so a dividend from a trading subsidiary would be taxed at 12.5% (now effectively 15% for large MNCs), with credit then given for foreign tax suffered. The proposed participation exemption for foreign dividends would apply from 1 January 2025 where a recipient has controlled at least 5% of the ordinary share capital of the payer for an uninterrupted 12 month period (either up to and including the date of the dividend or, if the dividend is paid by a newly acquired company, subsequently). It would be a welcome simplification of a system that is complex and an outlier within the EU.
Ireland updates guidance on DAC 7 registration
The Irish Revenue has updated its registration and filing guidelines in relation to the seventh EU Directive on Administration Cooperation in tax matters (DAC 7). DAC 7 introduced new reporting obligations on digital platforms, such as websites and mobile apps that allow taxpayers to sell goods, offer online and offline personal services, or rent out immovable property or means of transport. They must report information on taxpayers using their platforms and details about their economic activities. This information is intended to assist tax authorities in EU member states to prevent tax evasion. See this summary on the Irish Revenue site, and the full text of guidelines for DAC 7 can be found here.
Jersey
Jersey updates list of automatic tax information exchange partners
The Jersey Government has updated the list of partner countries for purposes of the automatic exchange of information under the Common Reporting Standard. Jamaica, Kenya, New Caledonia, and Thailand have newly been added as participating jurisdictions, while Anguilla, Montserrat, Niue, Trinidad and Tobago, Liberia, and Morocco have been removed. See the Amendment Order 2024 for further details.
Kenya
Kenya’s 2024/25 National Budget
Kenya announced in its recent Budget delivered on 13 June, various proposed changes to the country's corporate income tax and value-added tax laws to boost revenue collections for the territory. The Government has confirmed that it will legislate to implement the Pillar Two minimum tax framework on the profits of large multinational enterprises. Further, the Budget confirms the territory will newly offer advance pricing agreements. The Budget also announces plans to redesign the digital services tax, to prevent avoidance of the levy by businesses establishing an online presence outside Kenya, and relaunch it as the Significant Economic Presence Tax. Read more in this PwC summary for further details.
Korea
Korean Tax Update - June 2024
This edition includes: 1) Government to establish a growth ladder for SMEs, extending the grace period for graduating SMEs to seven years; 2) Government unveils measures to support the semiconductor ecosystem with a tax credit extension for national strategic technology; 3) NTS requires reporting of foreign financial accounts with more than KRW 500 million by 1 July; 4) Comprehensive real estate holding tax for 2023 marks a significant decline of 37.6%, amounting to KRW 4.2 trillion; 5) Changes in tax law; and 6) Rulings update.
Luxembourg
Luxembourg confirms corporate tax cut proposal
For further details, see the State of the Nation Address presented by Prime Minister Luc Frieden on 11 June.
Malaysia
Amendment to the foreign-sourced income exemption order
The Income Tax (Exemption) (No. 6) Order 2022 (Amendment) Order 2024 has been gazetted to amend the provisions in the Income Tax (Exemption) (No. 6) Order 2022 which provides tax exemption on foreign-sourced dividend income. Read more in this PwC alert.
Digital tax incentives
On 31 May 2024, Malaysia Digital Economy Corporation Sdn Bhd unveiled its outcome-based Malaysia Digital (MD) tax incentives for MD companies proposing to undertake qualifying activities by leveraging certain promoted tech enablers. Read more in this PwC alert.
Malta
Year of Assessment 2024 Tax Return for Companies
On 18 June 2024, Malta's Commissioner for Tax and Customs announced the availability of 2024 year of assessment corporate income tax returns online. The supplemental document in case of a Fiscal Unit is also available. For this year of assessment, several salient changes have been made to the return. Details can be found in this announcement from the Commissioner for Revenue.
Mauritius
Mauritius National Budget 2024-2025
The National Budget 2024-2025 was presented on 7 June 2024 by the Minister of Finance, Economic Planning and Development. Included was an announcement of a new Corporate Climate Responsibility (CCR) levy, which will apply at a rate of 2% on profits, on companies whose turnover is MUR 50 million (USD 10.75 million) or more. Further, the Budget announces that the three-year 15% investment tax credit will be expanded to cover investments in AI and patents, and companies investing in corporate nurseries will be granted a 25% tax credit. Read more in our summary of the tax measures.
Middle East
Qatar signs double tax treaties with KSA and UAE
The State of Qatar and the Kingdom of Saudi Arabia (KSA) signed a double tax treaty agreement on 30 May 2024. On the same day, Qatar also signed a similar agreement with the United Arab Emirates (UAE), marking a significant milestone in regional cooperation and economic integration. The signing of these agreements signals a significant step towards a more harmonious fiscal environment within the Gulf Cooperation Council (GCC) region. The treaties will enter into force after the exchange of the ratification instruments. Read more in this PwC alert.
New Zealand
New Zealand confirms application of PE rules to a specific services situation
As reported previously, the New Zealand Tax Authority has clarified the absence of a PE (and lack of application of certain other rules) in a specific situation involving an overseas resident company that established a wholly-owned New Zealand resident company to undertake work in New Zealand. Read more in our latest digital tax byte from 11 June.
Tax Policy Bulletin - June 2024
Tax Policy Bulletin is a regular round-up of recent tax headline news. In this edition we cover: 1) Budget 2024: tax changes; 2) Summary of recent IR tax publications; 3) Open consultations.
New Zealand hikes deemed rate of return for FIF interests
New Zealand's Inland Revenue Department has announced early information on the deemed rate of return for attributing interest on foreign Investment funds for the 2023-24 income tax year ahead of the upcoming Tax Information Bulletin. The deemed rate of return for taxing foreign investment fund interests has been set at 8.63% for the 2023-24 income year. The rate hike of 0.48%, is effective from 6 June 2024.
Poland
Polish entities may have to pay UTPR tax even if the ultimate parent entity's country has implemented a global minimum tax
The draft law implementing Directive 2022/2523, currently subject to public consultations, provides for the introduction of an undertaxed profit top-up tax (the equivalent of UTPR). This tax may cover Polish subsidiaries even if the country of the ultimate parent entity has implemented a minimum tax in accordance with the OECD model rules. Read more in this PwC alert.
Digital platforms reporting (DAC7) introduced in Poland as of July
The President signed an act dated 23 May 2024, amending the act on the exchange of tax information with other countries and certain other acts. The law implements the provisions of EU Council Directive 2021/514 of 22 March 2021, amending Directive 2011/16/EU on administrative cooperation in the field of taxation (DAC7). Read more in this PwC alert.
Romania
ECJ: No fixed establishment of German company on the basis of service contract with Romanian group company
The European Court of Justice held that a German resident company (limited partnership) has no establishment for VAT purposes in Romania under a service contract with a Romanian group company. The court also addressed the question of the place of performance under the circumstances in the case referred. Further details can be found in this PwC Blog.
Russia
Update on the suspension of the double tax treaty with Russia
The Austrian Ministry of Finance recently published a decree clarifying the treatment of income paid between residents of Austria and Russia following the suspension of several provisions of the countries’ tax treaty. See this update from PwC Austria.
Singapore
Pillar Two update
Singapore’s Ministry of Finance recently released the draft Multinational Enterprise (Minimum Tax) Bill, which provides for the underlying structure for the country’s global minimum tax, and draft subsidiary legislation, Multinational Enterprise (Minimum Tax) Regulations 2025, which includes more details on the GloBE ETR calculation. The draft bill includes a domestic top-up tax (DTT) and an Income Inclusion Rule (IIR) effective from 1 January 2025. A consultation is open until 5 July. This follows Finance Minister Lawrence Wong’s 16 February budget speech, in which he reiterated the government’s intention to implement parts of the global minimum tax.
Singapore consults on income tax law amendments
The Singaporean Ministry of Finance has opened a consultation (until 5 July), on a draft of the Income Tax (Amendment) Bill, to implement budget and non-budget measures. The draft bill includes measures that would: 1) introduce a 50% corporate tax rebate up to SGD 40,000 (USD 29,575) for 2024; 2) introduce a 50% Refundable Investment Credit (RIC) on expenditures for qualifying activities; and 3) introduce a 50% individual tax rebate, capped at SGD 200 (USD 147) per taxpayer.
South Africa
Tax Synopsis - May 2024
This edition includes: 1) Tax transparency – Tip of the iceberg series; 2) The tax deduction of donations in terms of section 18A and IT3(d) reporting; and 3) SARS watch.
Switzerland
For the latest updates on current topics, see this PwC Switzerland Insights page.
Tunisia
Argentina and Tunisia committed to expand and enhance bilateral relations
According to a 11 June press release published by the Argentine Ministry of Foreign Affairs, International Trade and Worship, officials from Argentina and Tunisia met to review the extensive bilateral agenda, with a view to deepening cooperation in various fields, including an agreement for a double tax treaty between the parties.
Uganda
Uganda releases new FY2024-25 budget
Uganda announced new tax incentives for the production of electric vehicles, in its Budget released 13 June. Income tax holidays will be offered to companies engaged in the manufacture or assembly of electric vehicles, electric batteries, or electric vehicle charging equipment. A capital gains tax exemption will be introduced for the sale of equity holdings or holdings in venture capital funds regulated by the Capital Markets Authority, the Budget says. For further details refer to the full text of the budget speech.
US
Supreme Court upholds constitutionality of mandatory repatriation tax in Moore
The United States Supreme Court has released its opinion in Moore v. United States, upholding the constitutionality of the Section 965 transition tax (the Mandatory Repatriation Tax (MRT)) per the Court) under the Tax Cuts and Jobs Act (TCJA). The decision affirmed the judgement of the US Court of Appeals for the Ninth Circuit. Five justices joined in the majority opinion of the court; two justices joined a separate opinion concurring in the judgement of the court, and two justices dissented. The majority opinion stressed that “Congress has long taxed shareholders of an entity on the entity’s undistributed income, and it did the same with the MRT. This Court has long upheld taxes of that kind, and we do the same today with the MRT.” Read more in this PwC alert.
Guidance addresses related-party basis shifting transactions
The Treasury Department and the IRS have issued three guidance items addressing basis-shifting transactions involving partnerships and related parties that could significantly limit the flexibility afforded to related-party partnerships. Proposed regulations (the Reportable Transaction Proposed Regulations) would, if finalised, treat certain partnership related-party basis adjustment transactions (Covered Transactions or Related-Party Basis Adjustment Transactions) as transactions of interest that would be required to be disclosed to the IRS by participants and material advisors. Read more in this PwC alert.
US confirms suspension of Russia double tax treaty terms
On 17 June, the US Treasury Department announced that US authorities have provided formal notice to Russia to confirm the suspension of provisions in the countries' double tax treaty. The US Treasury confirmed the suspension will take effect both for taxes withheld at source and in respect of other taxes on 16 August 2024, and will continue until otherwise decided by the two governments.
Policy on Demand series
- More clarity, more restrictions in OECD’s latest guidance package
Pat Brown and Stewart Brant review the OECD’s latest guidance on the Pillar Two global minimum tax and Amount B of Pillar One. While there are some helpful simplifications and clarifications, many parts of the guidance remain incredibly complicated and burdensome for taxpayers Watch this episode from 20 June here. - Election Watch
In this episode from 19 June, Craig Stronberg joins Rohit Kumar and Janice Mays on this month’s Election Watch to focus on upcoming elections outside of the US and discuss how these results will impact US business. - Ways and Means GOP tax teams aim to educate and build consensus
In this episode from 17 June, Andrew Prior does a deeper dive on the House Ways and Means Republican tax teams, their aim to educate and build consensus among GOP members and develop legislative solutions for 2025. - Tax policy implications of appropriations process
Congress is focused on funding for FY2025 - in this episode from 10 June, Janice Mays sheds light on the appropriations process, IRS funding, OECD relations, and tax reform efforts from Democratic tax writers. - Week in Review
- 21 June - The CBO recently projected that the US is on track to add trillions of dollars to the national debt over the next decade, complicating the already complex 2025 tax policy debate. It's key for companies to engage with Congress on how the TCJA business tax provisions have helped businesses and working families. Watch here.
- 14 June - Amidst elevated inflation and high interest rates, House Republicans prepare for 2025 and potential policy extensions, weighing new revenue sources and fiscal impacts. Supreme Court decisions are also on the horizon, with expected implications on tax policy and business interests. Watch here.
Tax Readiness webcast series
- Tax Readiness: Bringing state income tax opportunities to business transformation
Register here to join on Thursday 25 July at 7pm, for this webcast that will provide valuable insights into the state income tax issues arising from global and domestic business changes. Our PwC specialists will discuss potential action items to consider, including state filing methodology, apportionment, and state tax treatment of foreign income, along with the indirect tax consequences to be taken into account. - Tax Readiness: Q2 financial reporting considerations
On 19 June, our panel of specialists discussed tax accounting considerations and recent tax developments. The webcast included financial reporting considerations relating to intraperiod tax allocations, intercompany transactions and valuation allowances, including the potential Pillar two impacts, as well as other hot topics and commonly asked questions. Watch the replay here. - Tax Readiness: Private capital tax trends
Watch the replay from this webcast held on 4 June, where our panel discussed the latest tax trends and regulatory changes impacting the private capital industry - from portfolio companies to investors. Register now to gain actionable insights into how the ever-evolving tax landscape is shaping business strategies and operational considerations for private capital firms.
State and local tax
- California budget includes significant tax provisions
California budget “trailer” legislation passed by the Legislature on 13 June suspends net operating loss (NOL) deductions and limits credit utilisation for 2024-2026, seeks to retroactively overturn judicial findings with respect to apportionment representation for deductible income, and suspends the sales tax bad debt deduction for retailers, among other provisions. Read more in this PwC alert. - Georgia legislature enacts reduced credit carryforward limitations
Georgia Governor Brian Kemp (R) recently approved new legislation (H.B. 1181) that will impose carryforward limitations on certain credits. The legislation will reduce the number of years a taxpayer can carry forward unused tax credits. The legislation is effective on 1 January 2025, and will apply only to unused tax credits generated during tax years beginning on or after 1 January 2025. Read more in this PwC alert. - Illinois amends taxation of leases and prohibits interchange fees on tax
Illinois Governor J.B. Pritzker (D) signed a budget bill HB 4951 on 7 June 2024, that amends the taxation, exemptions, and sourcing of tangible personal property (TPP) leases, prohibits interchange fees on tax and gratuities included in an electronic payment transaction, codifies policies regarding the licensing of software, and sets a cap on the vendor’s discount. Read more in this PwC alert.
Further information
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