Two weeks to 22 January 2021
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
UK
Responding to the business impacts of COVID-19
Visit our global crisis centre webpage and our COVID-19 hub on TheSuite to continue to keep up to date with developments on this topic. Of particular relevance to multinational companies operating in the UK, navigate the global tax, legal and economic measures in response to COVID-19 by territory here. In relation to the UK:
- OECD updates guidance on tax treaties and the impact of the COVID-19 crisis
On 21 January, the OECD has updated the guidance issued by the OECD Secretariat in April 2020 on the impact of the COVID-19 pandemic on tax treaties. It represents the Secretariat’s views on the interpretation of the provision of tax treaties, reflecting the general approach of jurisdictions, and illustrates how some (including the UK) have addressed the impact of the pandemic on the situations of individuals and employers including tax residence and permanent establishments.
Brexit
The UK has left the EU and negotiations on the future trading relationship of the UK and the EU have concluded with a deal agreed. So what next for businesses as we enter this new trading world?
- Brexit is done - what you need to know (from an International Markets perspective)
The Trade & Cooperation Agreement (‘TCA’) came into provisional effect on 31 December 2020 and establishes the commercial and regulatory arrangements between the EU and the UK. The agreement is provisional upon ratification by the European Parliament which is expected by the end of February/early March. This publication, which is relevant for any foreign HQ business with UK operations, provides summaries of the TCA’s provisions in key areas such as Indirect Tax, Direct Tax, Immigration, Social Security and Data Protection.
Global business operating models: the tax issues
In view of the changing international landscape and increased globalisation of workforces, this article (first published in Tax Journal) examines key existing tax considerations for global operating models, including the UK’s diverted profits tax, withholding tax issues on royalties allocable to permanent establishments, the UK’s anti-hybrid and offshore receipts in respect of intangible property rules, transfer pricing, permanent establishment and residence. It then assesses the key UK tax issues associated with restructurings that seek to ensure that the operating model is sustainable and aligned to business strategy. The impact of Brexit, digital taxes and the OECD’s two pillar proposals is also considered, and the commentary highlights the increasing importance of considering international tax, transfer pricing and indirect taxes holistically. Read more.
UK tax treaties
- Double taxation treaties stakeholder review 2020/21
PwC experts participated in HMRC’s recent virtual meeting for stakeholders to discuss their strategy in relation to double tax treaties (DTTs). HMRC confirmed that they will prioritise renegotiation of DTTs with EU member states to try and replicate the benefits of the Interest and Royalty and Parent and Subsidiary Directives, and that they would initially focus on the treaties with Germany and Italy during 2021. HMRC also confirmed that the UK government remains in favour of arbitration generally in DTTs and confirmed that the UK government’s position in ongoing negotiations around the global solutions to the challenges arising from the digitalisation of the economy should include arbitration mechanisms. - HMRC update UK - Germany double tax treaty information
HMRC have added the 2020 Protocol to the 2010 Double Taxation Convention and the 2020 Joint Declaration, to their online guidance covering tax treaties and related documents between the UK and Germany. See this HMRC page. - Double Taxation Treaty Passport scheme register updated
HMRC have updated the double taxation treaty passport scheme register, see here.
Why HMRC might think your transfer pricing is criminal
A recent article in the Financial Times announced that HMRC has “multiple live criminal investigations involving transfer pricing disputes”. HMRC’s focus on transfer pricing (and profit diversion more generally) has intensified and the approach to enquiries is perceived by clients as increasingly challenging. There is also an increased focus by HMRC on understanding any “behaviour” that led to any inaccuracy in the returns, with implications for penalties and HMRC’s assessing position. The article, and our experience of seeing HMRC’s Fraud Investigation Service (“FIS”) as integral members of TP enquiry teams, is further indication of HMRC’s intent to challenge TP arrangements. Read more.
UK regulatory approach to cryptoassets and stablecoins: consultation and call for evidence
HM Treasury is consulting on the government’s approach to cryptoasset regulation, with a focus on stablecoins; and call for evidence on investment and wholesale uses. The deadline for responses is 21 March 2021.
Capital allowances & business rates - Freeports proposals
The Government's "free port" prospectus includes intentions to introduce enhanced capital allowances and business rates reliefs in order to encourage investment in under-developed areas. Read more.
EU
EU opens public consultation on design of pending digital tax
The European Commission has opened a public consultation seeking input on a proposed EU digital tax that would work in tandem with the OECD initiative to reform international corporate taxation. The consultation closes on 12 April.
EU tax haven blacklist must be strengthened says EU Tax Commissioner
MEPs adopted a resolution pushing for the system used to draw up the EU list of tax havens to be changed, as it is currently “confusing and ineffective”. MEPs propose changes that would make the process of listing or delisting a country more transparent, consistent and impartial. Criteria should be added to ensure that more countries are considered a tax haven and to prevent countries from being removed from the blacklist too hastily. Read more in this European Parliament press release.
CJEU rules Swedish interest deduction rule incompatible with EU law
In a recent CJEU judgment in the Lexel AB case, the court decided that the Swedish interest deduction rule is incompatible with EU law. Read more in our EU Direct Tax Group newsalert.
Next Generation Europe – Europe’s recovery and resilience plan
COVID-19 has shaken Europe and the world to its core, testing our welfare and healthcare systems, our economies and societies, as well as our way of living and working together. To facilitate the repair of the immediate economic and social damage brought about by the pandemic and prepare for a better, stable future, the European Commission has launched a new resilience and recovery instrument, called “Next Generation EU” (NextGen EU). Read more in this PwC item.
Proposal for a Directive of the European Parliament and of the Council as regards disclosure of income tax information by certain undertakings and branches - consolidated compromise proposal
On 13 January 2021, the Portuguese EU Presidency published a new consolidated compromise proposal for a Directive of the European Parliament and EU Council. This amended Directive 2013/34/EU, concerning EU public CbCR, and will be discussed in the Council's Working Party on Company Law meeting which will take place on 22 January 2021.
CFE Tax Advisers Europe
CFE Tax Top 5 – Round-up of EU Tax Policy News
The latest edition looks at the following: 1) EU Commission launches digital levy roadmap & public consultation; 2) OECD virtual consultation on Pillar 1 & 2 Blueprints; 3) EU Commission publishes progress report on customs risk management; 4) Inclusive Framework on BEPS public virtual meeting; and 5) Vacancy: Tax Technical Officer at CFE Tax Advisers Europe. View previous editions here.
OECD
Digitalisation of the economy - public consultation on the Pillar One & Two Blueprints
As part of the ongoing work to develop a solution to the tax challenges of the digitalisation of the economy, the OECD/G20 Inclusive Framework on BEPS invited public comments on the Reports on the Pillar One and Pillar Two Blueprints. This recent public consultation meeting focused on the key questions identified in the consultation document and raised in the written submissions received as part of the consultation process. You can watch the replay from the live meeting here and read more in this PwC Tax Insights.
OECD updates guidance on tax treaties and the impact of the COVID-19 crisis
As noted above, on 21 January, the OECD has updated the guidance issued by the OECD Secretariat in April 2020 on the impact of the COVID-19 pandemic on tax treaties. It represents the Secretariat’s views on the interpretation of the provision of tax treaties, reflecting the general approach of jurisdictions, and illustrates how some (including the UK) have addressed the impact of the pandemic on the situations of individuals and employers including permanent establishments.
Public comments received on the 2020 Review of BEPS Action 14
On 18 November 2020, as part of the ongoing work of the OECD/G20 Inclusive Framework on BEPS, the OECD secretariat invited public comments on the 2020 Review of BEPS Action 14 (which seeks to improve the resolution of tax-related disputes between jurisdictions). The OECD has now published the public comments received.
Platform for Collaboration on Tax's new toolkit helps countries implement effective transfer pricing documentation requirements
The Platform for Collaboration on Tax (PCT)—a joint initiative of IMF, OECD, UN and the World Bank—has released the final version of the Practical Toolkit to Support the Successful Implementation by Developing Countries of Effective Transfer Pricing Documentation Requirements. The PCT's new toolkit serves as a sourcebook of guidance on implementing transfer pricing documentation requirements for developing countries. The toolkit compiles essential information on transfer pricing documentation and analyses policy choices and legislative options.
MLI - Estonia ratifies
Estonia recently deposited its instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (Multilateral Convention or MLI). For Estonia, the MLI will enter into force on 1 May 2021. See here for the latest list of signatories and parties to the MLI.
11th meeting of the OECD/G20 Inclusive Framework on BEPS
The 11th plenary meeting of the 137 members of the OECD/G20 Inclusive Framework on BEPS will be held virtually on 27-28 January 2021 and open to the public, allowing a glimpse into the various international tax-related workstreams undertaken by the Inclusive Framework to date. This work to end international tax avoidance through global cooperation, is especially timely in light of the fiscal challenges countries will face in the aftermath of the COVID-19 crisis. The event will take stock of the unparalleled transformation in international tax policy and administration in recent years, discuss current challenges and what the future holds. You can watch here.
Other territories
International
International Tax News - December 2020
International Tax News is designed to help multinational organisations keep up with the constant flow of tax developments. Topics covered in this edition include: 1) Cyprus addresses aggressive tax planning via unilateral measures; 2) New Chilean regulations on indirect Chilean asset transfers may increase reporting obligations; 3) Updated ATO guidance on permanent establishments in Australia due to COVID-19; and 4) 2020 fall economic statement proposes DST, anti-avoidance rule changes.
Digital tax byte
This edition includes updates on the reviews being undertaken by the office of the US Trade Representative into other countries' digital taxes.
Global economy watch: Predictions for 2021
Our latest global economics research has projected that the economy will grow at record speed in 2021, expanding by around 5% in market exchange rates, which is the fastest rate recorded in the 21st century. Read our Global Economy Watch Report for more predictions.
TP Talks Special Edition – Financial Transactions Transfer Pricing
This TP Talks Special Edition podcast is the first Financial Transactions quarterly podcast, featuring a regional update on Chapter X of the OECD Guidelines, regulatory changes, market conditions and the pandemic, as well as an update on LIBOR.
Tax accounting - December 2020 tax law changes
In this PwC Tax Insights, we discuss certain tax law developments in December 2020 that were not previously discussed in our International Tax News issued on December 21, 2020. Information presented in this alert may be of assistance for multinational companies preparing their income tax accounting analysis for the period ended December 31, 2020. It is intended to increase readers’ awareness of global tax law changes during December 2020, but does not offer a comprehensive list of tax law changes that should be considered for financial statements. Unless specifically indicated, the discussion and references throughout this publication pertain to US generally accepted accounting principles (US GAAP) and reporting considerations.
Belgium
See here for latest updates.
PwC’s Tax Bites podcast: Tax in 2021 – what to expect?
2020 was in many ways a challenging year, with several developments materialising in the tax domain. What will 2021 bring us in the area of taxation? Listen to our first Tax Bites podcast of the year where we take a closer look at the tax impact of developments such as the EU tax package, the OECD COVID-19 guidance and Brexit.
Belgian withholding taxes on French dividends will drop significantly
After a long juridical battle, the Belgian Ministry of Finance will accept the ruling of the Belgian Supreme Court/Court of Cassation which allows private individuals investing in French stocks on the stock market, to subtract a part of the French withholding taxes from the Belgian withholding taxes which are due on dividends received from those French stocks. Read more in this PwC Belgium news item.
Chile
Chile issues regulations on tax residency certificates and foreign flow through entities
The Chilean Tax Authority has issued Resolution N°151/2020 which addresses formal requirements applicable to tax residency certificates required to claim: (i) a full ‘first category tax credit’ against withholding taxes imposed on dividend distributions to foreign shareholders resident in a treaty jurisdiction, or (ii) a reduced rate or exemption for other types of income under the relevant treaty. In the Resolution the Chilean Tax Authority also went beyond formal requirements and analyzed the specific situation of dividends paid to foreign shareholders deemed to be flow through under foreign law. Read more.
China (see also Hong Kong below)
China’s Foreign Investments Security Review Measures – How will they impact your business?
On 19 December, China released the Foreign Investments Security Review Measures which require foreign investors to pass certain reviews from the perspective of national security when investing in specific areas and industries in China. The Measures came into force on 18 January 2021 and have major and material impacts on certain foreign investment projects and transactions. The promulgation and implementation of the new rules demonstrates that China will continue to promote foreign investment and address security to further advance the opening up of China. This webinar, taking place on 4 February at 9am, will discuss the key issues that foreign investors may face after the Measures are enacted, and the resulting business impacts. Register here.
Estonia
Estonia ratifies MLI
Estonia recently deposited its instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (Multilateral Convention or MLI). For Estonia, the MLI will enter into force on 1 May 2021. See here for the latest list of signatories and parties to the MLI.
Tax Alert January 2021
This edition provides a comparative overview of the most relevant tax indicators for the years 2020 and 2021.
Finland
Foreign corporate entities will be considered resident in Finland for tax purposes from 2021 onwards based on place of effective management
As reported previously, an amendment to the rules concerning the taxation of foreign entities has entered into force. According to the amendment, a foreign corporate entity is considered resident in Finland if its place of effective management is in Finland. The amendment entered into force on 1 January 2021. Read more in this PwC Finland tax news item.
Tax and Legal news - January 2021
The latest tax and legal news from Finland. Read the latest edition.
France
USTR suspends additional tariffs in Sec 301 investigation of French DST
On 7 January, the US Trade Representative (USTR) announced that it has suspended the additional tariffs on certain products of France (mainly cosmetics, skincare, and handbags) that had been announced in July 2020 and were scheduled to go into effect on 6 January as part of the Section 301 investigation of France’s Digital Services Tax (DST). The USTR said it has decided to suspend the tariffs in light of the ongoing investigations of similar DSTs adopted or under consideration in 10 other jurisdictions: Austria, Brazil, the Czech Republic, the European Union, India, Indonesia, Italy, Spain, Turkey, and the United Kingdom. Read more in this PwC Tax Insights.
France extends cross-border tax pact with Italy
The competent authorities of France and Italy have signed an agreement extending until at least March 31 the provisions of the mutual agreement concerning the tax status of cross-border workers during the pandemic, according to information published by the French General Directorate of Public Finance.
Germany
German draft bill on the modernisation of the withholding tax relief procedure
The German Federal Government has adopted the draft bill on the modernisation of the relief from withholding taxes and the certification of withholding tax paid. The draft bill includes changes to the withholding tax and relief procedure and an adjustment of the German anti-treaty shopping rules. However, the envisaged retroactive abolishment of the German sourcing rules for licenses and intellectual property (IP) sales transactions based on the mere registration of underlying rights in a German register was dropped. The approval of the bill by the German Federal Government is the first step of the legislative process; so further changes of the draft bill may occur and need to be monitored. Read more.
Review of profit and loss pooling agreements concluded prior to 27 February 2013 recommended
An amendment to a statutory law which was passed by the Bundestag and Bundesrat in December 2020 and entered into force on 1 January 2021, requires a review of those profit and loss pooling agreements concluded and last amended before 27 February 2013. This pertains to profit and loss pooling agreements (PLPA) for tax groups (“Organschaft”) with a GmbH as controlled subsidiary and which do not (yet) contain an explicit and unconditional reference to Section 302 of the German Stock Corporation Act (GSCA) which includes future changes of the provision (so-called “dynamic reference”). Read more in this PwC Germany tax blog.
Gibraltar
Changes to scope of DAC 6 in Gibraltar
The Gibraltar Competent Authority for the exchange of information for tax purposes has announced that Gibraltar is limiting the scope of reporting under DAC6. Following the approach recently adopted in the UK, reporting in Gibraltar will be limited to cross-border arrangements falling within Category D hallmarks (CRS avoidance arrangements and opaque offshore structures). Read more in this PwC EUDTG newsalert.
Hong Kong
2021/22 Hong Kong Budget
Financial Secretary Paul Chan Mo-po will announce the 2021/22 Hong Kong Budget on 24 February, outlining the government's plan for the economy and proposals for taxation developments. To help you get prepared and stay ahead of change, see here for our budget predictions on factors that could potentially affect you and your business.
Hong Kong tax review 2020
The Hong Kong tax review 2020 summarises the significant tax updates last year and previews the upcoming tax developments in the year 2021.
Ireland
Ireland’s Corporation Tax Roadmap January 2021 Update
The Minister for Finance, Paschal Donohoe TD, recently published an update to Ireland's Corporation Tax Roadmap. This update provides an opportunity to take stock of Ireland’s progress to date in respect of each of the Roadmap commitments, adding to the significant level of reforms Ireland had already taken in recent years in aligning to new and emerging international standards.
Italy
Italian Finance Bill
- Italy 2021 budget extends step-up regime for intangibles and provides for retroactive application of APAs
The Italian Parliament approved and published the 2021 budget law in the Official Gazette on December 30. The Law contains several corporate tax provisions, including (i) extension of the tax step-up regime to goodwill; (ii) retroactive application of advance pricing agreements; and (iii) exemptions from dividend and capital gains tax for European Union (EU) and European Economic Area (EEA) investment funds. Multinationals should consider the potential impact of the 2021 budget law, analyze their position for Italian tax purposes, and consider the relevant tax regimes that have been introduced or revamped (eg the step-up regime or the tax credits) for short-term support. Read more. - New developments concerning the taxation of EU/EEA non-resident investment funds with respect to Italian sourced dividends and capital gains
We reported this in our previous edition and you can now read our EU Direct Tax Group newsalert on the recently approved 2021 Italian Finance Bill which provides, inter alia, an exemption from dividend withholding tax and capital gain tax with respect to Italian sourced dividends and capital gain received by qualified EU/EAA non-resident investment funds.
Jersey
Company tax return deadline
Companies are being reminded that they have until 31 January 2021 to file their 2019 tax returns. Revenue Jersey extended the deadline at the end of 2020 due to the disruption caused by the COVID-19 pandemic, but companies must meet the new deadline to avoid a late filing penalty. See this Jersey government item.
Draft clarification to the guidance on the implications of COVID-19 for the economic substance test
The Comptroller of Revenue has published a draft clarification to his Guidance on the Implications of Coronavirus for the Economic Substance Test. There have been discussions of this clarification with industry representatives and it is published now, pending confirmation through official channels. See this PwC item.
Extension of Jersey's Economic Substance law to self-managed funds
On 29 December 2020, Jersey's Minister for External Relations lodged two amendments to the Economic Substance legislation. Read more in this PwC item.
Korea
Korean Tax Update - January 2021
This edition reports that following the amendment of tax laws at the end of December 2020, the Ministry of Economy & Finance (MOEF) has announced the government’s bill to amend the Presidential Decrees of the amended tax laws, inviting public comments thereon until 21 January 2021. The government’s bill will be finalized in the cabinet meeting and proclaimed in February 2021.
Luxembourg
Luxembourg issues guidance on application of interest limitation rules
With the implementation of the anti-tax avoidance directive (ATAD 1), Luxembourg has introduced Interest Limitation Rules (ILR) in Article 168bis of the Luxembourg income tax law. The Luxembourg tax authorities issued an administrative circular providing guidance on their interpretation of the ILR on January 8. Read more.
Peru
New limitation on the deductibility of interest expense
Beginning 1 January 2021, the EBITDA rule has replaced the thin capitalization rule for purposes of determining the interest expense amount that taxpayers may deduct from taxable income. Read more in this PwC Tax Insights.
Russia
Tax Monitoring: Should we join?
The criteria for participating in the tax monitoring (TM) regime were eased right before the New Year. The government expects a significant inflow of new participants. The TM regime is convenient for both taxpayers and the tax authorities. Apart from technical matters, it is important to have the reputation of being a good faith taxpayer. Therefore, the question is not so much as “what for” but “when”. Read more in this PwC Russia Tax Flash.
Sweden
CJEU rules Swedish interest deduction rule incompatible with EU law
As reported above, in a recent CJEU judgment in the Lexel AB case, the court decided that the Swedish interest deduction rule is incompatible with EU law. Read more in our EU Direct Tax Group newsalert.
New withholding tax obligation for foreign companies
Until 31 December 2020, foreign employers without a permanent establishment in Sweden had no obligation to withhold Swedish preliminary tax on salary paid to employees, even if work was performed in Sweden. From 1 January 2021, this is no longer the case. Read more.
Switzerland
COVID-19 webinar series
See here for upcoming and recorded webinars.
For the latest updates on current topics, see this PwC Switzerland Insights page.
US
Election 2020:
- US Election Result - What does this mean for US and global tax policy?
Democrats are now positioned to control the US Senate and this will influence the agenda of the Biden Administration and the possibility of their tax proposals being implemented. On 21 January, we shared our insights on what tax policy changes we may expect to see for business in 2021, along with potential bipartisan opportunities in this webcast. - The road after the election: The Biden administration — what changes to expect and how business leaders can prepare for what’s ahead
In this item, Kathryn Kaminsky (PwC’s Vice Chair and head of Tax) and Dave Camp (a Managing Director within PwC’s Washington National Tax Services and former Congressman and Chair of the House Ways and Means Committee) discuss the legislative policy agenda.
Visit our PwC US election web page to keep up to date with developments.
Biden proposes pandemic relief as first step in economic recovery plan
President-elect Joe Biden has proposed a $1.9 trillion emergency legislative package (the American Rescue Plan) to fund COVID-19 vaccinations, provide increased direct relief to individuals, and support communities. Biden said the proposal is the first step in a two-part plan that is needed immediately and will be followed by an economic recovery plan -- the Build Back Better Recovery Plan -- that he will outline in February. Read more.
Practical considerations from the 2021 final Section 163(j) regulations
US Treasury and the IRS recently released final regulations under Section 163(j). The regulations finalize, with certain key changes and reservations, proposed regulations published in the Federal Register on 14 September 2020. Section 163(j), which was modified by the 2017 tax reform legislation and the CARES Act, generally limits US business interest expense deductions to the sum of business interest income, 30% (or 50%, as applicable) of adjusted taxable income, and the taxpayer’s floor plan financing interest for the tax year. Read more and also register below for our webcast.
USTR suspends additional tariffs in Sec 301 investigation of French DST
On 7 January, the US Trade Representative (USTR) announced that it has suspended the additional tariffs on certain products of France (mainly cosmetics, skincare, and handbags) that had been announced in July 2020 and were scheduled to go into effect on 6 January as part of the Section 301 investigation of France’s Digital Services Tax (DST). The USTR said it has decided to suspend the tariffs in light of the ongoing investigations of similar DSTs adopted or under consideration in 10 other jurisdictions: Austria, Brazil, the Czech Republic, the European Union, India, Indonesia, Italy, Spain, Turkey, and the United Kingdom. Read more in this PwC Tax Insights.
California Senate bill proposes pass-through entity tax
California Senate Bill No. 104 (SB 104), recently introduced, would provide an elective entity level tax for pass-through entities (PTEs) doing business in the state. With SB 104’s introduction, California becomes one of the first states to move towards the enactment of a PTE tax after the IRS issued preliminary guidance in Notice 2020-75, which generally confirms the federal deductibility of state PTE taxes. SB 104 currently is with the state Committee on Rules pending assignment and can be acted upon on or after 5 February 2021. Read more in this PwC Tax Insights.
Colorado rule applies sales tax to digital media, streaming services
The Colorado Department of Revenue has adopted final rule changes that treat electronic downloads and internet streaming of digital media as taxable purchases of tangible personal property. The rule changes are effective as of 30 January 2021. Read more in this PwC Tax Insights.
Delaware NOL limitation policy violates state Uniformity Clause
The Delaware Superior Court has found that the state’s Division of Revenue’s policy limiting a corporate income taxpayer’s NOL deduction to the amount of its federal consolidated group’s NOL violated the Delaware Constitution’s Uniformity Clause. A ‘reasonableness’ standard generally applies to cure Uniformity Clause violations; however, the Court concluded that such an exception does not apply to administrative policies. Although the Court found the policy was consistent with Delaware statutory law and did not violate the US Constitution’s Commerce Clause, the policy was struck down due to its Uniformity Clause violation. Read more in this PwC Tax Insights.
Illinois adopts regulations for remote sellers and marketplaces
The Illinois Department of Revenue adopted regulations effective 1 January 2021 to clarify the imposition and sourcing of Retailers’ Occupation Tax imposed on remote sellers and marketplace facilitators. The regulations define several types of retailers, provide applicable tax and sourcing rules for sales transactions, and include a flowchart to assist retailers with registration to collect and remit tax. Read more in this PwC Tax Insights.
New York proposals include tax on high-wage earners, optional pass-through entity tax
Governor Andrew Cuomo (D) recently announced a revenue bill (legislation) as part of the state’s FY 22 budget that proposes to increase the personal income tax rate on taxpayers with income in excess of $5 million; pause the phased reduction of middle-class tax rates; introduce an optional pass-through entity tax; require all federal S corporations that are subject to tax in New York to be treated as S corporations for state tax purposes; amend the state’s real estate transfer tax, subject all vacation rentals to sales and use taxes; modify several credits, including extending the film tax credit for one year; make other tax changes. Read more.
Seattle payroll expense tax rules — Legislation, draft rules, and legal challenge
Seattle has proposed rules for its new payroll expense tax that took effect 1 January 2021. The draft rules address areas of ambiguity in the ordinance adopted by the Seattle City Council in July. A lawsuit has been filed challenging the Seattle tax, and there is a draft legislative proposal for a state-level payroll expense tax. Read more in this PwC Tax Insights.
Texas adopts significant changes to margin tax sourcing rule
The Comptroller adopted amendments to Texas Admin Code 3.591 — Margin: Apportionment, which will be republished in the Texas Register on 15 January. The amendments include both new provisions and significant changes to existing provisions for the sourcing of revenue relating to the sale of general services, internet hosting, advertising, digital property, single-member LLC interests, capital assets and investments, financial derivatives, and broadcasting. Read more in this PwC Tax Insights.
Webcasts, blogs and podcasts:
- Tax Readiness: Renewed interest - What to know about the Final Section 163(j) Regulations
Please join us for this webcast on Tuesday 26 January at 5pm. Register here. - 2021 Tax Policy Outlook: The Changing Horizon
Register here to join us for this webcast on Thursday 28 January at 7pm. - Tap into Tax
This PwC podcast series combines perspectives from our tax technical specialists and our professionals focusing on the evolving tax function for a holistic look at tax. Listen to the latest episode:
Further episodes in this series are available here, as well as on Spotify and other streaming services.
- Cross-border tax talks
- US tax reform 2.0? Biden's international tax campaign proposals
In this episode, Doug McHoney (PwC's US International Tax Services (ITS) Leader) and Nita Asher (ITS Partner in PwC's Washington National Tax Services office) cover some of President Biden's campaign tax proposals.
- US tax reform 2.0? Biden's international tax campaign proposals
Previous episodes in this fabulous series of podcasts can be found here, as well as on Spotify, YouTube and other streaming services.
Replays:
A number of previous webcasts are available for replay in our US tax reform hub here, including:
- Tax Readiness: Embracing the future of mobility
You can watch the replay from this webcast held on 21 January 2021. - Tax Readiness: Issues under the Section 451 Final Regulations
In this webcast we discussed significant issues arising under the recently published Section 451 final regulations dealing with recognizing income under the all-events test and the advance payment deferral method. Watch the replay here. - Tax Readiness: New tax legislation and what it means
Watch this replay from this recent webcast held on Thursday, 7 January. - State Tax Outlook for 2021 and beyond
Watch the replay from this webcast held on Tuesday, 15 December. - US Inbound Insights: US Economic, Policy and Tax Webcast
In this webcast our PwC panel shared potential implications of the US elections on US operations of global companies headquartered outside the United States. Watch the replay here. - Are you prepared for the tax & accounting implications in the transition from LIBOR?
Register here to watch the on demand replay of this webcast.
Other updates
For regular updates on this topic, check out our US tax reform hub on The Suite here.
