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Financial reporting considerations of taxing the digital economy

Business structures and the process of value creation have evolved in part through the digitalization of the global economy. Such evolution has posed broad tax challenges which the Organization for Economic Cooperation and Development (OECD) is currently evaluating. Sometimes referred to as BEPS 2.0, the OECD is examining various proposals concerning changes to current profit allocation and nexus rules, as well as a global minimum tax, which were first detailed in a consultation document. Additionally, on 31 May 2019, the OECD released a work plan, Programme of Work to Develop a Consensus Solution to the Tax Challenges Arising from the Digitalisation of the Economy, stating that it expects to provide a long-term, consensus-based solution in 2020. A further document, as well as a public consultation, are expected later this year. In addition to the OECD’s efforts, separate unilateral measures addressing the digitalization of the economy have been introduced by a variety of countries, including France and the United Kingdom.

FS Tax Accounting Seminar - 2 August 2019

Our summer FS tax accounting update covered current affairs topics including an update from half year reporting, IFRS 16 and IFRIC 23. If you would like to discuss any of these areas in more detail, please get in touch with any of the contacts listed in the attached slides or your usual PwC contact.

Hybrid Capital Instruments

As previously trialled in the 2018 Budget, the Taxation of Regulatory Capital Securities Regulations  (“the Regulatory Capital Regulations”) have been revoked and replaced with new tax rules introduced by Finance Act 2019 with effect from 1 January 2019 (the “Hybrid Capital Instrument Rules”). 

The old Regulations allowed banking and insurance groups to obtain certainty as to the deductibility of coupon payments on regulatory instruments.  These Regulations also contain a stamp duty exemption, and also dealt with a number of other issues discussed further below.

Autumn Budget 2018 - Insurance Update

hilip Hammond delivered the Autumn Budget this afternoon, highlighting a number of fiscal measures which will affect both business and personal finances. We have highlighted key issues affecting financial services businesses