Two weeks to 5 July 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
- Tax Readiness: How Pillar Two and the EU FSR impact multinational entities
Entities operating cross border and in the European Union will be very interested in the next episode in our Tax Readiness series, a 90-minute webcast taking place at 4pm on Tuesday 16 July. It will cover the latest Pillar Two Administrative Guidance - which includes the application of the recapture rule to deferred tax liabilities, cross-border allocation of current and deferred taxes, allocation of profits and taxes in certain structures involving flow-through entities, and the treatment of securitization vehicles - as well as the EU Foreign Subsidies Regulation (FSR). Register here.
General Election
- Webcast: Employment measures under the new Labour Government
Following the Labour victory in the 2024 General election, we are anticipating a number of new employment measures to be included in the King's Speech on 17 July 2024. A key offering in the Party's manifesto was a commitment to reforming a number of areas of the world of work, setting out to deliver a 'new deal for working people'. Labour committed to introducing legislation in the first 100 days of government, although a number of the proposals will require consultation and/or secondary legislation before becoming law. So, it's crucial that employers stay close to the details as legislation is rolled out in the coming weeks to get clarity on the impact of the changes on their business. Join us for a live webcast on Friday 19 July at 10am where we will discuss the announcements in the King's Speech as well as a summary of the key proposals. Register here and even if you can’t join live, you will be sent a link to the recording. - Framework for Growth
We believe that the new UK Government has an opportunity to develop an industrial policy that helps establish a new model of inclusive growth. Our Framework for Growth sets out business leaders’ priorities, and provides economic analysis to assess the potential impact. Read more.
Case law update
- UK Care No 1 Ltd v HMRC
In the recent case UK Care No. 1 Ltd. v. HM Revenue & Customs, the First Tier Tribunal (FTT) ruled that HMRC was correct to disallow losses relating to loan notes which it concluded arose, as a matter of commercial reality, whilst the company was resident in Guernsey and the loan notes were therefore outside the charge to UK tax. - HMRC v Altrad Services - CoA applies Ramsay to invalidate tax avoidance scheme
In R & C Commrs v Altrad Services Ltd [2024] BTC 17, the Court of Appeal ruled in favour of HMRC, finding that (on a purposive reading of the legislation) the series of preordained steps entered into by the taxpayers as part of a tax avoidance scheme did not achieve the intended outcome for capital allowances purposes.
UK's DST collection figures higher than anticipated
Freedom of information (FOI) data obtained by DLA Piper reveals that the UK government collected GBP567 million in Digital Services Tax (DST) from major tech companies in 2023, higher than the UK Treasury’s initial estimates ahead of its implementation in April 2020, including GBP425 million for 2022-23 and GBP465 million in 2023-24. The UK is one of the countries that committed to withdraw its DST on the introduction of Pillar One of the G20/Inclusive Framework digital project. A timeline for reaching Pillar One agreement was set at 30 June 2024 (revised from 31 December 2023) and that has just expired without that agreement, although the OECD remains optimistic that it will happen shortly. The higher than expected UK receipts may encourage other countries to consider DST if Pillar One isn’t implemented. Read more in our latest Digital Tax Byte from 4 July.
HMRC Manual & guidance updates
- How to apply for a certificate of residence to claim tax relief abroad
This HMRC guidance was updated on 26 June with contact information for companies that need a pre-order.
EU
Tax Readiness: How Pillar Two and the EU FSR impact multinational entities
As noted above, entities operating cross border and in the European Union will be very interested in the next episode in our Tax Readiness series, a 90-minute webcast taking place at 4pm on Tuesday 16 July. It will cover the latest Pillar Two Administrative Guidance - which includes the application of the recapture rule to deferred tax liabilities, cross-border allocation of current and deferred taxes, allocation of profits and taxes in certain structures involving flow-through entities, and the treatment of securitization vehicles - as well as the EU Foreign Subsidies Regulation (FSR). Register here.
Code of Conduct Group - Reports to the Council
The EU’s Code of Conduct Group (Business Taxation) issued its latest Code of Conduct report to the European Council on 13 June, setting out the Group’s work in the first half of 2024. The Code of Conduct for Business Taxation covers tax measures and tax features of general application (jointly referred to as ‘tax measures’) that are applied or introduced in EU member states.
Annual Report on Taxation (ART) 2024: tax mix takes on future challenges
The European Commission has launched the 2024 edition of the Annual Report on Taxation, providing an update on the state of play of tax systems in the Member States of the European Union. The report discusses both recent reforms in EU tax systems and developments in the main indicators used by the Commission to assess tax policies in EU Member States and at EU level. Read more in this EU 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 24 June includes: 1) ECOFIN: No Agreement on ViDA at Final Belgian Presidency Meeting; 2) OECD Director of Centre for Tax Policy Discusses Future of Business Taxation at the Oxford University Summer Tax Conference; 3) CFE – Accountancy Europe Members’ Only Webinar: New EU AML Rules – What Changes for Practitioners?; 4) EU Presidency Note on UN Zero-Draft Terms of Reference for a UN Framework Convention on International Tax Cooperation; 5) CFE Opinion Statement on Evidence to Support Transport Organised by the Customer Under Article 138 of the VAT Directive. Visit their latest news page here. - GTAP Statement on the Recent Developments in International Tax Policy
The Global Tax Advisers Platform (“GTAP”) has published an Opinion Statement that sets out GTAP’s views on recent developments in international tax policy. The global tax advisory community believes that the days of cross border taxation being seen as a source of conflict or profit are at an end. There is a pressing need to create a cooperative global tax environment fit for the purposes of the 21st Century. GTAP urges all international stakeholders, in the event of an increase in the role of the UN in forming global cross border tax policy, to work together constructively. Read more in this press release.
OECD
Pillar One and Pillar Two
- Tax Readiness: How Pillar Two and the EU FSR impact multinational entities
As noted above, entities operating cross border and in the European Union will be very interested in the next episode in our Tax Readiness series, a 90-minute webcast taking place at 4pm on Tuesday 16 July. It will cover the latest Pillar Two Administrative Guidance - which includes the application of the recapture rule to deferred tax liabilities, cross-border allocation of current and deferred taxes, allocation of profits and taxes in certain structures involving flow-through entities, and the treatment of securitization vehicles - as well as the EU Foreign Subsidies Regulation (FSR). Register here.
OECD’s role in tax certainty, cooperation amidst global elections
In this Policy on Demand episode from 26 June, Pat Brown (PwC’s Washington National Tax Services Co-Leader) is joined by Dr. Achim Pross (Deputy Director, OECD Centre for Tax Policy and Administration) who discusses changes in tax compliance and planning over the arc of his career, as well as the relatively new dimension of tax certainty and its potential to enhance cooperation between tax administrations and taxpayers. Shifting gears, he offers insights on how the OECD navigates global elections.
Asian jurisdictions reap significant rewards from collective efforts to advance tax transparency
Launched on 24 June from Yerevan, Armenia, by the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum), Tax Transparency in Asia 2024 shows how members of its Asia Initiative successfully identified at least EUR 21.8 billion in additional revenue (tax, interest and penalties) since 2009; through the use of exchange of information on request (EOIR) and automatic exchange of financial account information (AEOI), and including related voluntary disclosure programmes and offshore tax investigations. Read more in this OECD item.
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
UN public consultation on Zero Draft Terms of Reference
As previously reported, the draft Terms of Reference (ToR) for the UN Tax Convention was released on 7 June with comments due 21 June. The UN has published input it received from over 100 stakeholders representing Member States, UN organisations and entities, international organisations, civil society/academia, and the business community on their website.
Other territories
International
International Tax News - June 2024
International Tax News is designed to help multinational organisations keep up with the constant flow of tax developments. Among the topics featured in this month's edition are: 1) Barbados enacts corporate tax reforms in response to Pillar Two; 2) OECD releases guidance related to Pillar Two GloBE and Pillar One Amount B; 3) Austrian Ministry of Finance publishes draft on the Austrian Tax Amendment Act of 2024; and 4) Canada enacts Pillar Two and releases Explanatory Notes for the Global Minimum Tax Act.
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 4 July, we cover:
- Belgium provides more time for some MNEs to complete Pillar Two registration;
- Indian Circular clarifies time limit for claiming credit for certain supplies of digital services (and other supplies) from abroad;
- a Freedom of Information request revealed that the UK’s DST collection figures are higher than anticipated;
- Canada’s Digital Services Tax Act received royal assent and has now become law; and
- having garnered enough votes in the Senate, California moves its digital advertising tax legislation to the Assembly.
Digital tax megabyte - June 2024
A collection of the brief insights throughout June 2024 of the type provided on an ad hoc basis in our latest digital tax byte update (see above).
Environmental, Social and Governance (ESG)
- Inside the sustainable supply chain revolution
How can organisations future-proof their supply chains against growing regulatory demands, environmental disruption and social concerns? Sustainable supply chain practices are essential to building resilience against external climate shocks and opening access to new markets by tapping into increased consumer demand for premium sustainably-sourced products. Read PwC UK’s article in collaboration with New Scientist to explore how data and technology are providing the insight that is fuelling the sustainable supply chain revolution. - Beyond reporting: Three ways sustainability reporting can be transformative
Did you miss PwC UK's #SustainabilityReporting LinkedIn Live during London Climate Action Week? Listen back to the broadcast to discover practical steps organisations can take to use sustainability reporting as a catalyst for transformative change.
Armenia
Hong Kong and Armenia sign double tax treaty
Officials from Armenia and Hong Kong signed a double tax treaty on 24 June in Yerevan, according to this press release published by Hong Kong’s Inland Revenue Department. Under the treaty, dividends, interest, and royalties are taxable at a maximum rate of 5%. A 0% rate applies to dividends if the beneficial owner is a company that directly holds at least 10% of the capital of the payer company throughout a 365-day period that includes the date of payment of the dividends.
Australia
Pillar Two update
On 24 June, the Australian Taxation Office (ATO) published a page on its website dedicated to Australia’s Pillar Two adoption, including the status of ATO implementation and a summary of the input gathered during previous consultations. While Australia’s Pillar Two legislation is not yet law, the ATO is working on designing domestic returns and developing administration systems in advance of the first filing deadlines on 30 June 2026. The website notes that the ATO has plans to carry out further public consultations in the future.
Funding for business to strengthen Australia's defence industry
The Defence Industry Development Grants Program will fund small to medium enterprises to build Australia’s sovereign capability, global competitiveness, technical superiority and national security. The program was announced as part of the Defence Industry Development Strategy and will award grants over four years from 2024-25 to 2027-28.
Pepsi wins appeal over royalties and Australian DPT
In PepsiCo Inc v Commissioner of Taxation [2024] FCAFC 86, an Australian appeals court has overturned the lower court’s holding that the Pepsi group was liable for Australian withholding tax on embedded royalties or, alternatively, owed diverted profits tax (DPT) because of a tax avoidance scheme. Read the decision here.
Australian lawmakers sign off on Tax Reform Bill
Australian lawmakers have signed off on The Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023. The legislation includes various measures, including: 1) An increase to the instant asset write-off threshold from AUD1,000 to AUD20,000 for the 2023-24 financial year; 2) the introduction of a bonus tax deduction for small and medium businesses for the 2023-24 financial year for investments in electrification and more efficient energy use; 3) An extension to the Global Infrastructure Hub's income tax exemption for an additional year. The legislation requires only Royal Assent to become law.
Belgium
See here for latest updates.
Belgium extends Pillar Two registration deadline for groups not making advance payments in 2024
The Belgian Tax Authority published an “administrative tolerance,” extending the deadline for certain taxpayers within the scope of the requirement to register under Belgium’s Pillar Two legislation. The extended deadline will be applicable to multinational and large-scale domestic groups that do not (intend to) make advance payments in 2024 for the Belgian domestic top-up tax or the Income Inclusion Rule (IIR). These groups are permitted to submit their notification for registration to the Crossroads Bank for Enterprises on or before 16 September 2024. Read more in this PwC alert.
Canada
Canada’s Digital Services Tax Act is now law ─ What is next and how can you prepare?
As reported previously in this PwC alert, legislation to implement various tax reform measures received Royal Assent in Canada on 20 June 2024, including legislation to implement the Digital Services Tax Act (DSTA). Although the DSTA has now become law, the legislation requires the additional step of an order of the Governor in Council for its coming into force, the decision for which will be determined by the progress of (and Canada’s preference for) a multilateral solution to the taxation of the digital economy. If the DSTA comes into force, the Digital Services Tax (DST) will apply in respect of revenues earned as of 1 January 2022, so affected taxpayers would be required to calculate the cumulative amount of tax payable. These taxpayers will also need to consider at what point it is appropriate to recognize a liability, according to their relevant accounting standards. This PwC alert discusses the calculation and administrative details of the DST and provides recommendations on how to prepare should it come into force.
Germany
Constitutionality of the loss set-off restriction for forward transactions
In the summary review required during suspension proceedings under Section 69 (3) of the German Tax Court Code, the loss set-off restriction for forward transactions/futures under Section 20(6) Sentence 5 of the German Income Tax Act (ITA) in the version of the Finance Act 2020 of 21 December 2020 (Federal Law Gazette I 2020, 3096) is incompatible with Article 3(1) of the German Constitution. This was decided by the Supreme Tax Court in a ruling published on 27 June 2024. Read more in this PwC blog.
Gibraltar
Budget 2024
Gibraltar’s Chief Minister, Fabian Picardo, presented the budget for 2024 on 1 July 2024. The standard rate of corporate income tax is increased by 2.5% to 15%. Read more in PwC’s summary of the key tax related changes announced.
Hong Kong
Bill on patent box tax incentive passed into law
On 26 June 2024, the Inland Revenue (Amendment) (Tax Concessions for Intellectual Property Income) Bill 2024, as amended by way of a committee stage amendment (CSA), passed its third reading in the Legislative Council. The Bill aims to establish a patent box regime in Hong Kong, aligning with international trends to incentivise research and development (R&D) activities and intellectual property (IP) development. It is anticipated that the Bill will be gazetted as an amendment ordinance on 5 July 2024, which will take retrospective effect from the year of assessment 2023/24. The CSA is technical in nature and seeks to clarify that the three-year transitional period, during which an eligible person with insufficient records is allowed to compute the R&D fraction using a three-year rolling average, commences from the first day of the eligible person's basis period for the year of assessment 2023/24, as opposed to the previously stated date of 1 April 2023. This PwC alert explains the CSA and discusses the key clarifications and responses to written submissions regarding the Bill as provided by the Hong Kong SAR government during the legislative process, along with our observations.
Hong Kong and Armenia sign double tax treaty
Officials from Armenia and Hong Kong signed a double tax treaty on 24 June in Yerevan, according to this press release published by Hong Kong’s Inland Revenue Department. Under the treaty, dividends, interest, and royalties are taxable at a maximum rate of 5%. A 0% rate applies to dividends if the beneficial owner is a company that directly holds at least 10% of the capital of the payer company throughout a 365-day period that includes the date of payment of the dividends.
India
Reimbursement towards utilities licence acquired centrally not taxable under the India-Switzerland double tax treaty
The Chennai bench of the Income-tax Appellate Tribunal recently concluded that reimbursement made by Indian group companies towards service provider licences obtained centrally by a group company in Switzerland (the taxpayer) would not constitute a royalty as per the provisions of Article 12 of the India-Switzerland double tax treaty. Moreover, the Tribunal observed that annual maintenance service fees received by the taxpayer were an integral part of the sale of the software licence and not a separate service. Therefore, the consideration for such services would partake the taxability of the sale of software licences, which are not chargeable to tax in India. Read more in this PwC alert.
India clarifies GST treatment of intra-group loans
India's Central Board of Indirect Taxes and Customs has released Circular No.218/12/2024-GST clarifying the goods and services tax (GST) rules that apply to intra-group loans. In response to questions from taxpayers, the tax authority has clarified when a loan provided by an overseas entity to an Indian related entity, or a loan provided between two domestic related entities, is taxable. The circular, dated 26 June 2024, provides that services provided by way of extending credit, loans, or advances are generally taxable supplies. However, it says that such services are fully exempt from GST where the consideration for such services is represented by way of interest or discount. See this PwC alert, which includes details of this Circular and others released following recommendations made during the 53rd GST Council meeting.
Indian Circular clarifies time limit for claiming credit for certain supplies of digital services (and other supplies) from abroad
The Indian authorities have issued Circular No. 211/5/2024-GST dated 26 June 2024. It clarifies the time limit for claiming credit in relation to supplies received from unregistered persons abroad to which the Reverse Charge Mechanism (RCM) is applied, such as (but not limited to) digital services. Read more in our latest digital tax byte from 4 July and this PwC alert, which includes details of this Circular and others released following recommendations made during the 53rd GST Council meeting.
India and US agree to extend Equalization Levy truce
The United States and India have announced an extension of their existing agreement (dated 24 November 2021) on the transition from India’s 2% Equalisation Levy (EL), agreeing that the terms of that agreement should continue through to 30 June 2024. India’s EL is being raised to 6% as part of a multilateral solution to address the tax challenges posed by the digital economy as agreed by the OECD’s Inclusive Framework as part of the OECD’s BEPS project. Read this press release from the Office of the US Trade Representative.
Luxembourg
Luxembourg releases draft law to amend the Pillar 2 Law
On 12 June, the Luxembourg government submitted a draft law (n° 8396) to amend the law of 22 December 2023 introducing the Pillar Two minimum taxation rules. The Pillar Two Law introduced the Income Inclusion Rule (“IIR”), Undertaxed Profits Rule (“UTPR”) and Qualified Domestic Minimum Top-up Tax (“QDMTT”) into Luxembourg law for fiscal years starting on or after 31 December 2023 (with a general one year delay for the UTPR to become effective). While the draft law mainly aims to incorporate administrative guidance issued by the OECD until the end of 2023, the commentary to the draft law clarifies some important principles which could be relevant for Luxembourg businesses impacted by the rules. Read more in this PwC alert.
Malaysia
Guidelines on the tax treatment of hybrid instruments
The Inland Revenue Board issued guidelines on 19 June 2024 to explain its tax treatment for issuers and holders of hybrid instruments, including Islamic instruments. Read more in this PwC alert.
Malta
Public Country-by-Country Reporting transposed into Maltese Legislation
The EU’s public country-by-country reporting (Public CbCR) Directive, was transposed into Maltese legislation on 17 May 2024. Based on the newly published law, the Public CbCR will take effect in Malta for accounting periods beginning on or after 22 June 2024. For in-scope multinational enterprises (MNEs) who prepare their consolidated financial statements on a calendar-year basis, Public CbCR first applies from 1 January 2025. Read more in this PwC alert.
Middle East
UAE Corporate Tax - "Free Zone Persons" Guide
The Federal Tax Authority has released a Corporate Tax Guide on Free Zone (FZ) Persons, one of the most important and complex areas of the new regime. This Guide serves as a significant resource, providing clarifications and additional insights on various important topics in relation to FZ Persons. Read more in this PwC alert.
Corporate Income Tax is coming to Bahrain. Are you ready?
"It is a global direction to impose corporate taxes and Bahrain is committed to comply with the move", quoted the Finance and National Economy Minister Shaikh Salman bin Khalifa Al Khalifa on 23 May 2023. Draft legislation to this effect is expected to be issued this year and following the implementation of corporate income tax (CIT), businesses of various sizes and across all sectors will encounter challenges, spanning operational, financial, and other areas. CIT is coming - how is your business preparing? Read more in this PwC alert.
Singapore
Singapore launches 2024 corporate tax filing season
Singapore's corporate tax filing season began on 1 July 2024, with the deadline for corporate income tax returns being 30 November 2024 for the 2024 year of assessment. For more details on the forms required, see the IRAS website.
South Africa
Controlled foreign company case
On 21 June 2024, the Constitutional Court of South Africa (“ConCourt”) upheld an appeal against a judgement by the Supreme Court of Appeal (“SCA”). The ConCourt held that the Dublin based business operation of Coronation Global Fund Managers (Ireland) Ltd did indeed qualify as a “foreign business establishment”, for the purposes of South Africa’s controlled foreign company (“CFC”) rules, overturning an earlier SCA decision. Read more in this PwC alert.
South Africa clarifies local filing requirements for MNEs
The list of countries that have a current International Agreement in place with South Africa but do not have a Qualifying Competent Authority Agreement in place for purposes of Article 2(2) was updated on the South African Revenue Service website on 21 June, see here. There are currently 63 territories without a qualifying competent authority agreement.
Switzerland
For the latest updates on current topics, see this PwC Switzerland Insights page.
Taiwan
Taiwan Tax Update - June 2024
The latest edition includes: Taxpayers who perform online filing of 2023 corporate income tax (“CIT”) return should note the deadline for submission of hard copies of various parts of the CIT return.
US
Potential tax implications of the US Supreme Court overruling the Chevron doctrine
The Supreme Court recently released its opinion in Loper Bright Enterprises v. Raimondo, and Relentless, Inc. v. Department of Commerce, overturning the Chevron doctrine that generally required federal courts to defer to a federal agency's reasonable interpretation of an ambiguous statute. The Chevron doctrine played a critical role in allocating interpretive authority between administrative agencies and the courts and has provided a background principle against which Congress has legislated for 40 years. Federal agencies that engage in rulemaking will be impacted by the Supreme Court’s decision to overturn the Chevron doctrine, which could lead to a significant shift in how statutes are interpreted and enforced through regulations. Read more in this PwC alert.
Final procedural regulations set due date for stock repurchase excise tax reporting and payment
Treasury and the IRS have released final regulations (TD 10002; RIN 1545-BQ60) concerning the reporting and payment of the section 4501 excise tax on repurchases of corporate stock (final procedural regulations). The final procedural regulations address the procedural rules around the filing of the Form 720, Quarterly Federal Excise Tax Return, and Form 7208, Excise Tax on Repurchase of Corporate Stock, and the payment of the related excise tax. They also indicate that RICs and REITs do not have to file a Form 7208 but do have to maintain records. Read more in this PwC alert.
US Stock Buyback Tax: a funding conundrum
In this Policy on Demand episode from 26 June, Doug McHoney (PwC’s International Tax Services Global Leader) is joined by Nita Asher, International Tax Partner in PwC’s Washington National Tax Practice and former legislative counsel to the Joint Committee of Taxation during the enactment of TCJA in 2017. Doug and Nita focus on the Stock Buyback Excise Tax enacted under the Inflation Reduction Act. Doug and Nita walk through Notice 2023-2, the recently released procedural and technical regulations, including the elimination of the per se rule, the funding rule, and which other countries are considering similar rules. They also discuss how the excise tax could present a multi-year reporting exercise for taxpayers, utilising Forms 720 and 7208. Non-US headquartered companies will be very interested in this conversation!
Policy on Demand series
- What the 2025 tax changes mean for the C-suite
Maintaining the status quo is the least likely scenario around potential 2025 tax law changes. Now is the time for tax executives to educate internal stakeholders on tax changes that likely will affect business decisions currently being made. Watch this episode from 26 June. - Realisation requirement still open question after narrow Moore decision
While House and Senate members of Congress are looking ahead to the 2025 tax legislative action and expiring TCJA provisions, the US Supreme Court released its decision in Moore v. US upholding the constitutionality of the Section 965 transition tax enacted as part of TCJA. In this episode from 24 June, Wade Sutton shares his insights on the narrowness of the decision which left open the question on the realisation of income requirement. - Week in Review
- 28 June - Congressional tax writers have shifted their focus to the 2025 tax policy debate and are welcoming input from key stakeholders. Look to see what fallout there is from last night's presidential debate and what the candidates are saying about tax policy. Watch here.
Tax Readiness webcast series
- Tax Readiness: How Pillar Two and the EU FSR impact multinational entities
Entities operating cross border and in the European Union will be very interested in our discussion of both Pillar Two and the EU Foreign Subsidies Regulation (FSR). On this 90-minute webcast taking place at 4pm on Tuesday 16 July, we will cover the latest Pillar Two Administrative Guidance, which includes the application of the recapture rule to deferred tax liabilities, cross-border allocation of current and deferred taxes, allocation of profits and taxes in certain structures involving flow-through entities, and the treatment of securitization vehicles. Register here. - 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 intra-period 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.
State and local tax
- California Legislature passes second budget “trailer” bill, provides potential business tax relief
Budget “trailer” legislation (S.B. 175) passed by the Legislature on 26 June provides for a potential early sunset to the NOL suspension and details as to the recovery of credits otherwise suspended by other budget trailer legislation, S.B. 167. The S.B. 175 changes would become effective only when S.B. 167 is also enacted and takes effect. On 22 June, Governor Gavin Newsom (D) and legislative leadership announced a state budget agreement that included a framework for these provisions. Read more in this PwC alert - California’s proposed tax on data extraction transactions
On 27 June, the California Senate approved Sen. Steve Glazer’s (D) digital advertising tax legislation, SB 1327, by a vote of 27-7. This outcome comes as a surprise, since Glazer had previously stated that he doubted he could garner the two-thirds support needed for the bill’s passage. SB 1327 will now move to the Assembly, which needs to approve/reject it before the legislative session ends 31 August. Read more in Will Morris’ DTSG update from 28 June. - Tax Readiness: Bringing state income tax opportunities to business transformation
As noted above, our webcast on Thursday 25 July at 7pm will provide valuable insights into the state income tax issues arising from global and domestic business changes. For further information see item above. Register here to join.
Further information
You can sign up for Tax Alerts issued by the US to be emailed to you. Subscribe using the link on this page.
Vietnam
Proposed changes to the CIT incentive regime
In June, a draft law on corporate income tax (CIT) was posted on the Government’s official website for public comments. It is expected that the draft law will be presented to the National Assembly for consideration in October and ratified in May 2025. The draft law makes various amendments to the existing regulations on CIT incentives and emphasises that in cases of any inconsistency between other laws and the CIT Law, the CIT Law shall prevail. Read more in this PwC alert.
Proposal for new Capital Gains Tax regime
On 11 June, a draft law on corporate income tax (CIT) was released for public consultation. The draft law includes a proposal to drastically amend the Capital Gains Tax regime which is tentatively effective from 1 January 2026. Read more in this PwC alert.