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Two weeks to 25 November 2022

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


Autumn Statement - predictions, analysis and resources
The Autumn Statement was delivered on 17 November, with UK Chancellor Jeremy Hunt outlining three priorities of stability, growth and public services.

  • Our reactions and analysis on the day
    Visit our dedicated webpage for our reactions and analysis and these related articles:

Finance Bill
Late on Tuesday 22 November, the Autumn Finance Bill 2022 was published, legislating for key tax changes announced by the Chancellor at last week’s Autumn Statement. Read more in this HM Treasury press release.

Pillar Two

  • UK implementation of Pillar Two
    It was announced in the Autumn Statement that the Income Inclusion Rule (IIR) and supplementary Qualified Domestic Minimum Top-up (QDMTT) tax rule will be introduced for accounting periods beginning on or after 31 December 2023, by legislation to be included in the Spring Finance Bill 2023. It was also announced that the government intends to implement the backstop Undertaxed Profits Rule in the UK, but with effect no earlier than accounting periods beginning on or after 31 December 2024.  
  • CIOT: Corporates scratching their heads over £2bn a year ‘global minimum tax’ forecast
    The Autumn Statement revealed that the Government is expecting to raise over £2 billion a year as a result of the G20-OECD proposals for a minimum global rate of corporation tax (known in the OECD jargon as ‘Pillar 2’). The Chartered Institute of Taxation (CIOT) is suggesting the amount likely to be raised could be significantly lower than this, unless other countries choose to implement the proposals in different ways that would not work to their best advantage. Read more in this press release.
  • Enrich your wider compliance process by addressing Pillar Two complexities head on
    The introduction of the Pillar Two rules is expected to result in an increased number of tax returns filed annually by multinational corporations.  For groups within the rules, there will likely be a number of domestic minimum tax (DMT) returns in addition to an annual GloBE return, each of which will require additional collation and data analysis on top of existing compliance obligations. We’re seeing Pillar Two as a catalyst for groups to revisit their tax operating models and compliance processes. Read more.
  • Building Pillar Two into technology planning
    The key to meeting Pillar 2 obligations is understanding the role of data and technology and aligning them to tax accounting and reporting. Read more.

UK implementation of OECD MDR - Summary of responses to consultation
HMRC has published a summary of responses to the consultation document published last year on replacing the EU mandatory disclosure rules (MDR or DAC6) with OECD MDR. This confirms that regulations implementing OECD MDR will come into force in the first half of 2023, and the regulations implementing DAC6 will be repealed. The government has decided that reporting of pre-existing arrangements should only be required from 25 June 2018 and not 2014 as initially proposed.

Can we use tax to drive greater behavioural change
In this Tax blog, PwC’s Laura Hinton comments that whatever news the chancellor’s Autumn Statement brings, most agree his room for manoeuvre on tax and spending is unusually tight. But a budget is more than simply a fiscal event. Just as in the business world, the setting of spending targets and revenue-raising plans is a powerful statement of human priorities too – a moment for the country to encourage certain behaviours and discourage others.

Global employment taxes newsletter
In this edition, we have insights from PwC teams in over 30 countries covering wider employment tax updates, as well as a focus on how a number of jurisdictions are currently approaching the issues and challenges presented by employment status. We’ve highlighted the latest developments in this area, particularly in the context of the ever growing gig economy.

Building Public Trust Through Tax Reporting
PwC’s Building Public Trust Award (BPTA), our annual event which recognises and celebrates organisations with insightful reporting, recently shone a spotlight on the growing importance of tax transparency. Identified from our recent polling of the general public to be one of the top three areas to help build trust with an organisation, tax transparency goes to the core of the BPTA mission; to inspire businesses to build trust with the public and work together to solve important problems. Read more.

Treaty updates

  • HMRC updates guidance on obtaining certificates of residence
    Guidance for companies applying for a certificate of residence has been updated.
  • CIOT responds to consultation on Double Tax Treaties
    The CIOT has published its response to the HMRC Tax Treaty Team stakeholder consultation on Review of Double Taxation Treaties 2023/24. View the CIOT response.
  • 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 with 95 additions, 15 amendments and 44 removals.

Hybrid & other mismatches: HMRC updates its guidance to reflect recent SI 2022/1144
We reported in our last edition on SI 2022/1144, which amends SI 2019/1345, to continue the exemption for certain hybrid capital instruments issued by banks to overseas associates beyond 31 December 2022. Following its publication, HMRC have updated their guidance at INTM551065 to reflect this. 

Approved offshore reporting funds 
HMRC has updated the list of approved offshore reporting funds to include the latest funds that have entered the Reporting Fund Regime. The list has been updated to include the funds that have entered as at 3 November 2022. View the updated list.


PwC Netherlands has published an updated version of the ATAD I & II implementation overview. This version serves as an update to the overview published in July 2021, and includes information on implementation of the ATAD I & II rules in EU Member States’ national laws up until 8 August 2022. Read more.

Beneficial ownership measures violate data protection laws
Following two requests from Luxembourg for a preliminary ruling in joined cases WM and Sovim SA v. Luxembourg Business Registers (joined cases C-37/20 and C-601/20), the Court of Justice of the European Union (CJEU) found that Luxembourg’s requirement that beneficial ownership register information be displayed online and remain accessible for members of the public violates the EU right to the protection of personal data.  Consequently, both Luxembourg and the Netherlands have suspended operation of their ultimate beneficial ownership (UBO) registers. Read more in this PwC tax blog.

European Finance Ministers approve a revised Code of Conduct for Business Taxation
As reported previously, while meeting for the monthly ECOFIN meeting on 8 November, the European Member States’ Finance Ministers agreed to revise text to the European Code of Conduct for Business Taxation - the first revision of the code since 1997. The revision extends the scope of the Code of Conduct to cover both preferential tax measures and tax features of general application (referred to as ‘tax measures’) which affect, or may affect, in a significant way the location of business activity in the Union. The latter element, the general features of a regime, is new and will assess whether that general feature leads to lower tax liability, including no tax liability, other than the nominal tax rate or deferred taxation as a feature of a distribution tax system. The additional measures in the Code of Conduct will apply from 1 January 2023. Read more in this PwC Tax Policy Alert.

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 21 November includes: 1 ) EU adopts revised code of conduct on business taxation; 2) ECJ delivers judgement in Fiscal State Aid Case Fiat Finance; 3) CFE conference Targeting the ‘Bad Apples’: Enablers of Tax Avoidance; Zagreb, 2 December 2022; 4) OECD’s warns BEPS risks remain in absence of the Two Pillar implementation; and 5) EU Commission Tax Symposium On the Road to 2050: 28 November 2022. Visit their latest news page here.


Pillar One Model Rules

  • Public comments received on the Progress Report on the Administration and Tax Certainty Aspects of Amount A of Pillar One
    On 6 October 2022, the OECD invited public comments on the Progress Report on the Administration and Tax Certainty Aspects of Amount A of Pillar One to assist members in further refining and finalising the relevant rules. The OECD has now published the public comments received which are available to view here.

New OECD data highlights multinational tax avoidance risks and the need for swift implementation of international reform
New data released recently by the OECD highlights the continuing base erosion and profit shifting (BEPS) risks and the need to implement the two-pillar solution to ensure that large multinational enterprises (MNEs) pay a fair share of tax wherever they operate and earn their profits. Read more in this OECD news item.

OECD releases new mutual agreement procedure statistics and country awards on the resolution of international tax disputes
The OECD has released the latest mutual agreement procedure (MAP) statistics covering 127 jurisdictions and practically all MAP cases worldwide. These statistics form part of the BEPS Action 14 Minimum Standard and the wider G20/OECD tax certainty agenda to improve the effectiveness and timeliness of tax-related dispute resolution mechanisms. Read more.

OECD Tax Certainty Day 2022
This event took place on 22 November and provided an opportunity for tax policy makers, tax administrations, business representatives and other stakeholders to take stock of the tax certainty agenda and move towards further improvements in both dispute prevention and dispute resolution. Watch the replay here.

Other territories


Digital tax byte
The  latest edition, from 25 November, in our series of brief insights into the workings of the UK and supranational bodies reviewing the taxation of digitalisation of business. It includes comments on: 1) DAC7 - Finland and Hungary introduce provisions to implement the Directive and Denmark issues guidance further to previously implementing powers; 2) draft legislation from Canada and the signature of an MCAA on exchange in relation to the OECD equivalent Model Rules; 3) New Zealand publishes regulations for reporting of data by payment service providers; 4) Indian Tribunal has issued a welcome ruling on payments for the AdWords Program, a computerised advertising program; 5) UK (in an Autumn Statement) and Ireland (Budget 2023) confirm their approach on timing on Pillar Two; 6) UK Parliament’s Public Accounts Committee announces that it will be opening an inquiry into the UK's DST at the time that the National Audit Office has published its review of that DST while we believe Turkey may be about to carry out a wave of DST investigations; 7) Philippines - bill to extend the 12% VAT to various services supplied electronically and to pass the liability in some cases to the non-resident platform providers reaches Senate.

Environmental, Social and Governance (ESG) 

  • Creating a climate for change: Business imperatives after COP27
    In this webcast PwC specialists and guest speakers shared their takeaways from the conference, highlighting the key actions and next steps that should be front of mind for business leaders. Watch here.
  • Net Zero: The Integrity Pathway
    Reaching net zero is one of the biggest challenges we collectively face. Creating a world where we can live and work sustainably is an urgent imperative, and expectations are growing for business to be part of the solution. This is not just about compliance, it’s about driving change and creating competitive advantage. Demonstrating progress, with robust and reliable data, will not only create trust, but add value. Three of our PwC experts spoke to ITN Business to focus on the role business must play in the transition to net zero. Watch here.

Visit our dedicated ESG webpage.

Draft law to change share buy-back tax rules for listed public companies
The Australian Treasury recently released for consultation an exposure draft law that seeks to implement the Government’s October 2022-23 Federal Budget announcement concerning the tax treatment of buy-backs undertaken by listed public companies. The exposure draft includes an additional integrity measure that will apply in respect of distributions paid in conjunction with selective share cancellations. Read more in this PwC tax alert.

Leases, Trusts and Options - Insights on NSW’s new “Change in Beneficial Ownership” regime
Following the introduction of the NSW change in beneficial ownership provisions to the Duties Act 1997 (NSW) (Duties Act) on 19 May 2022 pursuant to the Revenue and Fines Legislation Amendment (Miscellaneous) Act 2022 (NSW), Revenue NSW has recently issued: 1) Commissioner’s Practice Note CPN 025 which sets out circumstances when certain transactions will be dutiable as a change in beneficial ownership; and 2) Commissioner’s Practice Note CPN 027 which sets out the circumstances when the grant of a lease will be dutiable and in what circumstances the change in beneficial ownership provisions will apply to the grant of a lease. Importantly both practice notes are effective from 19 May 2022. Read more in this PwC tax alert.

Tax treaty network expansion
The Australian Government has launched a consultation into new tax treaty negotiations as part of its expansion of Australia’s tax treaty network. Negotiations are planned with Bulgaria, Colombia, Croatia, Cyprus, Estonia, Latvia and Lithuania. These countries add to the current program which includes Portugal, Slovenia, Greece and Luxembourg.

New approach to withholding tax relief for personnel leasing
For the Austrian Ministry of Finance (BMF), the ruling of the Austrian Supreme Administrative Court (VwGH) of 23 April 2021 (Ra 2020/13/0089) provided the impetus to conduct a pragmatic overhaul of withholding tax relief in the form of the Ordinance on Withholding Tax Relief for Personnel Leasing. The new ordinance applies fixed rates to divide withholding tax into a 70% employee portion and a 30% company portion. Read more in this PwC news item.

See here for latest updates.

Updated legislation - Excessive interest and financing expenses limitation (EIFEL) regime
As reported previously, the federal government released the 2022 Fall Economic Statement on 3 November 2022, as well as updated draft legislation for the proposed excessive interest and financing expenses limitation (EIFEL) rules. Most notably, the revised draft legislation defers the effective date of the rules to taxation years beginning after 30 September 2023. The Department of Finance has also opened a second consultation period on the rules, which closes on 6 January 2023, giving taxpayers additional time to consider and provide feedback on the revised draft legislation. This PwC Tax Insights discusses the changes to the proposed EIFEL rules and the potential impact of these changes for taxpayers.

Cyprus Tax Authorities clarify the application of the exemptions on remuneration
On 1 November 2022, the Cyprus Tax Authorities issued Circular 10/2022 clarifying certain aspects of the exemptions introduced through Articles 8(21A) and 8(23A) of the Cyprus Income Tax Law on employment income of certain individuals fulfilling specific conditions. The Circular also includes practical examples aiming to illustrate the clarifications introduced through it. Read more in this PwC Tax Insights.

Accrual of foreign source income and foreign tax credit
Part of the fee payable by the foreign client which is initially retained in anticipation of a potential foreign withholding tax liability of the German self-employed contractor is not immediately subject to income tax in the hands of the latter. According to a ruling of the Supreme Tax Court, the fee withheld is only subject to German income tax if the foreign customer settles the foreign (withholding) tax liability incurred on the total amount of the agreed fees. Read more in this PwC tax blog.

Mauritius taxpayer’s gain on sale of shares in Indian company not taxable in India
The Delhi bench of the Income-tax Appellate Tribunal has allowed an appeal in favour of a Mauritius taxpayer company, by applying the India-Mauritius double tax treaty benefits on short-term capital gains arising on the transfer of shares of an Indian company. The Tribunal, inter-alia, held that the tax officer in this case had made a desperate and unacceptable attempt to overcome the ratio laid down by the Supreme Court in the case of Azadi Bachao Andolan by anticipating a futuristic event of ratification of the Multilateral Instrument (MLI) providing amendment to the preamble of the India-Mauritius treaty by the Mauritius Government, which was not applicable in the relevant period. Read more in this PwC Tax Insights.

Arrangement under High Court approved scheme of amalgamation is not a colourable device
The Bangalore bench of the Income-tax Appellate Tribunal found no infirmity in an arrangement made pursuant to the composite scheme of amalgamation sanctioned by the Madras High Court during FY 2010-11, and therefore it was not a colourable device. The Tribunal also held that double taxation is not permissible. Read more in this PwC Tax Insights.

Plastic tax and sugar tax postponed
The 2020 budget law (n. 160/2019) introduced two new consumption taxes under the responsibility of the Customs and Monopolies Authority: the tax on the consumption of plastic products with single use (known as MACSI or the Plastic Tax) and the tax on the consumption of sweetened beverages (known as the Sugar Tax). The draft Budget law for 2023 provides the deferral of both taxes to January 2024. Read more in this PwC tax blog.

Korean Tax Update - November 2022
This latest edition includes: 1) the Cabinet approves bills to amend local tax revenue-related laws for 2022; 2) the Presidential Decree of the CITL amended to exempt income tax on interest or capital gains from government bonds etc. derived by foreign corporations or non-residents; 3) the government announces its Carbon Neutrality and Green Growth Strategy; 4) the NTS Audit to be temporarily suspended for companies contributing to job creation; and 5) rulings update.

Middle East
New UAE tax residency criteria
On 9 September 2022, the UAE Cabinet of Ministers issued Decision No. 85 of 2022, which provides a new domestic definition and criteria for when an individual or a legal entity shall be considered a tax resident of the UAE for the purposes of any UAE tax law or double tax treaty. The effective date of the new rules is 1 March 2023. Many of the bilateral tax agreements the UAE has entered into with other territories make reference to the domestic laws of the UAE for determining whether a person is a resident of the UAE for purposes of the respective treaty. This new domestic law gives additional clarity, which will facilitate the application of these treaties and the issuance of tax residence certificates under such treaties. Read more in this PwC tax news item.

Moving target - changes in the proposal for taxation of onshore wind and hydropower
As part of the National Budget process for 2023, the government has proposed a number of changes and new taxes for renewable energy producers. Read more in this PwC tax blog.

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


Midterm elections - the implications

  • 2022 state elections highlighted by tax ballot measures, power shifts
    In the 2022 state elections, voters in Massachusetts narrowly approved a “millionaire’s tax,” while California voters defeated a proposed income tax increase. In addition to the impacts of these and other tax-related initiatives, the direction of state tax policies could change in Michigan and Minnesota, where Democrats will have full control of the legislatures and governorships. Read more in this PwC Tax Insights.
  • Tax Readiness webcast: Implications of the US midterm elections
    Watch the replay from 22 November, where our panel of specialists examined the potential effect of the 2022 midterm elections for a year-end tax bill, the legislative path ahead for the 118th Congress, and the expected administrative guidance from Treasury.  

Treasury and the IRS release proposed foreign tax credit regulations
US Treasury and the IRS have released eagerly anticipated proposed foreign tax credit regulations (2022 Foreign Tax Credit (FTC) proposed regulations). The regulations address the cost recovery requirement, the attribution requirement for withholding tax on royalty payments, and the definition of a reattribution asset for purposes of allocating and apportioning foreign taxes. Read more in this PwC Tax Insights and also:

Texas appellate court allows cost-of-performance to support service revenue sourcing
Revenue from services is sourced to Texas when the service is “performed in this state.” A Texas appellate court recently ruled that Sirius XM’s cost-of-performance analysis was sufficient to support its conclusion regarding where services were “performed.” Read more in this PwC Tax Insights.

Policy on Demand series

  • What you need to know: New FTC regulations
    As noted above, the long-awaited foreign tax credit regulations are out. The taxpayer-favourable changes address ​some taxpayer concerns​ ​and taxpayers are encouraged to submit comments. In this episode, Pat Brown, (PwC’s Washington National Tax Services Co-Leader) talks about what you need to know.
  • Week in Review 
    • In this episode from 18 November, Rohit Kumar talks about Speaker Nancy Pelosi’s announcement not to run again, a change in Democratic leadership in the House, and Republican leadership elections. The question he received most is whether there will be a tax bill during the lame-duck session And looking at the week ahead, he suggests looking out for a bipartisan agreement on government funding, which is key to action on a potential year-end tax bill.

Tax Readiness webcast series

  • Tax Readiness: Q4 financial reporting considerations
    Register here to join our PwC specialists on 14 December at 7pm, as they discuss key tax accounting reminders related to the year-end reporting cycle and recent tax developments.
  • Tax Readiness: Implications of the US midterm elections
    On 22 November our panel of specialists examined the potential effect of the 2022 midterm elections for a year-end tax bill, the legislative path ahead for the 118th Congress, and the expected administrative guidance from the Treasury. Tax is a central piece to implementing your business' strategy in 2023 and can be a catalyst for delivering trust and driving strategic outcomes. Watch the replay here.
  • Tax Readiness webcast: Creating value - is tax aligned to support and enhance your business' strategic priorities?
    Watch the replay from this webcast held on 3 November as our specialists discuss innovative ways to create operational efficiencies and strategically reduce costs. We review the types of business transformations companies are undertaking and how tax serves as a strategic business partner within your organisation to enhance the value of those efforts.
  • Tax Readiness: Building a productive and resilient tax reporting strategy
    Watch the recording of this webcast held on 27 October, where our panel discussed how practical, sustainable data and reporting solutions can help ease workforce pressures (e.g., widening labour gap, economic uncertainty, inflation, etc.) and compliance challenges moving forward. Watch here.

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