International tax update for multinationals operating in the UK - period 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.
Latest digital tax byte
The latest addition to our series of brief insights into the workings of the UK and supranational bodies reviewing the taxation of the digitalisation of business.
International Tax News - October 2022
International Tax News is designed to help multinational organisations keep up with the constant flow of tax developments. Read the latest edition.
US 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.
EU Public Country-by-Country Reporting: A leap forwards
The EU’s public country-by-country reporting (CbCR) Directive, published in December 2021, is currently being transposed into individual Member States’ legislation. The latest date for this to apply is for accounting periods beginning on or after 22 June 2024 (for a December year, publication would be needed by 31 December 2026 for the 31 December 2025 year-end). However, local countries can apply earlier and determine their own penalty regime. The Romanian Official Gazette has formally published the regulations to implement the Directive, effective for accounting periods beginning on or after 1 January 2023 (i.e. publish by 31 December 2024). This may accelerate the requirement to disclose country-by-country data for your EU-wide operations and countries in the EU black/grey list.
International tax update for multinationals operating in the UK - period to 11 November 2022
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
US - Limited tax legislation expected with possible return to divided government
The 2022 midterm election results point to a return to divided control of the federal government with the new 118th Congress that will begin in January 2023.
CJEU final State aid decision in the FIAT case
On 8 November 2022, the Court of Justice of the European Union (CJEU) published its final decision on two appeals regarding the formal State aid investigation by the European Commission dating back to October 2015 in relation to an Advance Pricing Agreement (“APA” or “tax ruling”) of Fiat Finance & Trade Ltd (“FFT”). The European Court of Justice annulled the European Commission’s decision setting aside the finding that FTT had received State aid.
Hong Kong gazettes bill on significantly changed FSIE regime
Hong Kong’s SAR’s Government recently gazetted the Inland Revenue (Amendment) (Taxation on Specified Foreign-sourced Income ) Bill 2022. The Bill introduced significant refinements to Hong Kong’s foreign source income exemption (FSIE) regime for four types of offshore income: interest, dividends, disposal gains from the sale of equity interests, and income from intellectual property (IP) (collectively, ‘specified foreign-sourced income’). The Bill is expected to become effective January 1, 2023.
US Tax Readiness webcast: Implications of the US midterm elections
Join our panel of specialists on Tuesday 22 November at 7pm, as they examine 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. Tax is a central piece to implementing your business' strategy in 2023 and can be a catalyst for delivering trust and driving strategic outcomes.
Digital tax megabyte for October 2022
A collection of the brief insights throughout October 2022 of the type provided on an ad hoc basis in our Latest digital tax byte update.
Australian Monthly Tax Update - November 2022
Welcome to the November 2022 edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.
International tax update for multinationals operating in the UK - period to 28 October 2022
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
Australia’s Federal Budget includes significant changes for multinationals
Australia’s Federal Budget includes significant changes for multinationals
EU Tax News - July/August 2022
EU tax news is a bimonthly newsletter with summaries of all the relevant ECJ and national court cases and decisions, and EU policy initiatives related to EU direct tax law and state aid. The newsletter is prepared by members of PwC's EU direct tax group (EUDTG) from across Europe.
Corporate Interest Restriction
The Corporate Interest Restriction ("CIR") rules are an important part of any Group's tax compliance requirements. The rules have been in place for several years, are complex, and can be difficult to apply. There have also been a number of recent changes to how CIR returns and notifications can be submitted to HMRC, and the information that is required.
Ireland publishes Finance Bill 2022
The Irish Department of Finance recently published Finance Bill 2022 (the Bill) which would set into law the measures announced as part of the Irish budget last month. While the amendments, as expected, are primarily focused on personal taxes and the cost of living, the Bill does feature a provision amending the R&D tax credit and includes certain other business tax measures.
International Tax News - September 2022
International Tax News is designed to help multinational organisations keep up with the constant flow of tax developments.
OECD’s second tax morale report focuses on role of MNEs and the Big Four
The OECD’s report Tax Morale II: Building Trust between Tax Administrations and Large Businesses seeks to identify ways tax administrations, multinational enterprises (MNEs), the Big Four professional services networks (Deloitte, EY, KPMG, and PricewaterhouseCoopers), and others could enhance voluntary compliance. There are a lot of best practices and new opportunities identified alongside what it calls ‘common challenges.’ This Tax Policy Alert provides a few selected extracts.
Portugal 2023 Budget proposal introduces a crypto asset tax framework and new tax incentives
The 2023 Budget proposal was recently submitted to the Portuguese Parliament. This follows the 2022 Budget, which was published in June after elections in January. In general, the government is focusing on increasing companies’ competitiveness by fostering equity and supporting increased costs resulting from current world economic conditions. One of the Budget’s most impactful tax measures is a new tax framework for crypto assets.
Belgian budget includes temporary minimum tax; abolishes NID for some; amends FTC on royalties
The Belgian Government recently reached agreement on the federal budget. Key topics that shaped the agreement include addressing the ongoing energy crisis, limiting the budgetary deficit, and stimulating employment. The budget contains several important tax, energy, and business competition measures.
UK fiscal event - how the mini-budget impacts multinational companies
On 23 September, the new UK Government’s agenda to achieve economic growth was revealed by the Chancellor of the Exchequer (Kwasi Kwarteng) in his ‘fiscal event’. Whilst not a full Budget, he unveiled a host of tax changes which set out a fundamental change of direction for tax policy in the UK. Following the adverse reaction of the financial markets to these measures, a number of these proposals were withdrawn in the following weeks and Mr Kwarteng was ultimately replaced as Chancellor of the Exchequer by Jeremy Hunt on 14 October. On 17 October, Mr Hunt made his own fiscal announcement and reversed almost all the tax measures set out in the mini-budget. The position following Mr Hunt’s announcement, so far as it impacts multinational companies, is set out in this article.
International tax update for multinationals operating in the UK - period to 14 October 2022
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
OECD releases Progress Report on the Administration and Tax Certainty Aspects of Amount A of Pillar One
The OECD released for public consultation a Progress Report on the Administration and Tax Certainty Aspects of Amount A of Pillar One, which includes the rules on the administration of the new taxing right and updated tax certainty-related provisions. Amount A of Pillar One introduces a new taxing right over a portion of the profit of large and highly profitable enterprises for jurisdictions in which goods or services are supplied or consumers are located.
OECD issues new Crypto-Asset Reporting Framework
The OECD on 10 October published a much-anticipated two-part document - the Crypto-Asset Reporting Framework (CARF) and Amendments to the Common Reporting Standard (CRS) - setting forth a global tax transparency compliance framework with model rules for the automatic reporting and exchange of taxpayer information between countries relating to financial accounts and crypto-assets. The CARF, which responds to a G20 request, will be presented to G20 Finance Ministers and Central Bank Governors at their 12-13 October meeting in Washington, DC.
The OECD minimum tax: What US companies need to know
The Organisation for Economic Cooperation and Development (OECD) has been pursuing a “Two-Pillar Solution” aimed at alleviating certain global tax challenges that it believes arose from the “digitalisation of the economy.” This OECD two-pillar framework will significantly alter many international tax practices we follow today with a related impact on reported earnings.
US - FinCEN issues final beneficial ownership reporting rule
The US Treasury’s Financial Crimes Enforcement Network (FinCEN) recently issued a final rule implementing the Corporate Transparency Act’s (CTA’s) beneficial ownership information (BOI) reporting provisions. CTA, enacted in January 2021, targets tax fraud, terrorism, and money laundering by requiring US-formed corporations and limited liability companies (LLCs) and certain foreign-owned entities doing business in the United States to report to FinCEN certain information about their beneficial owners.
US - IRS releases guidance on outbound transfers of intangible property
The IRS recently released an internal Advice Memorandum concluding that a transferee foreign corporation may prepay annual Section 367(d) income inclusions when it transfers “money or other property” (‘boot’) in connection with a Section 351 transfer of intangible property subject to Section 367(d), but not in other situations.
Australian Monthly Tax Update - October 2022
Welcome to the October 2022 edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.
Digital tax megabyte for September 2022
This edition includes clarification from Kenya on the exemption for registered non-resident suppliers of digital services from issuing electronic tax invoices and news from Australia that the new Government has reintroduced plans for digital platform reporting. The European Commission has also adopted an implementing Regulation on DAC7 schema and statistical reporting. Meanwhile Colombia proposes to introduce a significant economic presence tax rule. The OECD intends to broadcast part of the Inclusive Framework meeting on 6 October 2022 (to view live or recorded).
International tax update for multinationals operating in the UK - period to 30 September 2022
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
Importance of transfer pricing implementation in a tax dispute environment
This article provides an insight into how tax authorities are interrogating TP implementation along with the nature of evidence that authorities typically expect a taxpayer to retain in order to demonstrate they are taking reasonable care to ensure their TP policies are properly implemented and operationally effective.
US Policy on Demand: The ripple effect of UK's mini-budget
In this episode of Policy on Demand, Thomas Rees, a Partner at PwC’s International Tax Desk in New York, discusses the UK government's fiscal event and how businesses are responding and questions he's hearing.
EC proposes to address high energy prices through excess profits taxes and consumption reductions
The European Commission (EC) published, on 14 September, a proposal for a Council Regulation on an emergency intervention to address high energy prices.
CJEU decision in deduction of final losses - case C-538/20 (W AG)
The CJEU's judgement in the case C-538/20 (W AG) has found that Germany does not infringe the freedom of establishment by not allowing the deduction of final losses which a German company had incurred in its PE situated in the UK because Germany as the state of residence has waived its power to tax the profits (and losses) of that PE under a double tax treaty.
International Tax News - August 2022
International Tax News is designed to help multinational organisations keep up with the constant flow of tax developments.
International tax update for multinationals operating in the UK - period to 16 September 2022
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
Uruguay proposes to amend how foreign passive income without substance is taxed
Uruguay's Ministry of Economy and Finance initiated on 28 July, a public consultation on a draft bill that will be submitted to Congress.
CT Reliefs, Allowances & Exemptions
Nexus patent box regime changes from 1 July 2021 - action needed in advance of submitting tax returns
As you may be aware, the new (or “Nexus”) Patent Box regime took effect from 1 July 2021 and grandfathering under the current scheme ends. This means that all companies, irrespective of the date IP has been granted, will need to prepare their patent box claims under the new scheme from this date.
Internal Debt Reorganisations
Since the COVID pandemic, and in an environment of rising costs, we have seen a lot of businesses seeking to simplify and rationalise their group structures in order to respond to M&A activity, remove unnecessary entities, or resolve distributable reserve blocks. Often this activity also involves rationalising and managing intercompany loan positions, and this can often be a challenging exercise. Such programmes can carry the risk of unexpected taxable gains arising, withholding tax challenges, or the potential claw back of previously deducted management expenses.
OECD public consultation meeting: Amount A of Pillar One
The OECD’s public consultation on the Progress Report on Amount A of Pillar One (‘The Progress Report’) was held on 12 September 2022. This alert provides an overview of the consultation meeting and some initial observations.
Blackrock Holdco 5 LLC v HMRC - Upper Tribunal Decision
The Upper Tribunal has handed down its decision in the Blackrock appeal (Blackrock Holdco 5 LLC v HMRC [2022] UKUT 00199 (TCC) ). This decision, which creates legal precedent, has important implications for the deductibility of interest by companies under both the “Unallowable Purpose Rule” and the transfer pricing rules.
Australian Monthly Tax Update - September 2022
Welcome to the September 2022 edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.
Digital tax megabyte for August 2022
This edition includes comments on a G24 response to the Plilar 1 Amount A Progress Report as well as Korean draft legislation and Malaysian and Swiss consultation documents for implementing Pillar 2, while Hong Kong has announced delays in implementing Pillar 2. It also includes guidance from the Irish Revenue on the deductibility of digital services taxes (DSTs) and our summation of the European Commission's report on its public consultation on 'VAT in the Digital Age'. A New Zealand Tax Bill also provides draft legislation extending the GST charge on electronic marketplace operators, as well as incorporating the OECD model rules on reporting by such platforms while Bulgaria is consulting about the adoption of the EU equivalent DAC7 provisions.
Switzerland publishes draft Pillar Two ordinance for public consultation
The Swiss Federal Council recently launched a public consultation concerning the draft ordinance laying out the material aspects of the Pillar Two implementation in Switzerland. Interested parties have until 17 November to submit comments to the Swiss administration.
Government of Finland publishes draft bill extending capital gains taxation of non- resident companies investing in Finnish real estate
Currently, non-resident real estate investors are subject to Finnish capital gains tax when making direct disposals of Finnish real estate assets, shares in Finnish mutual real estate companies or Finnish limited liability companies directly holding majority of their assets in Finnish real estate. A draft bill published at the beginning of August is about to extend the capital gains taxation to transfers of entities holding indirectly Finnish real estate.
US Treasury defers applicability dates for foreign currency guidance
US Treasury and the IRS recently issued Notice 2022-34, which states plans to defer the applicability date of certain final Section 987 regulations and certain related regulations by an additional year, now to tax years beginning after 7 December 2023. These regulations previously had been deferred under prior Notices, including most recently under Notice 2021-59.
International tax update for multinationals operating in the UK - period to 19 August 2022
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
California legislature passes unclaimed property voluntary compliance programme
The California legislature passed a bill on 17 August authorising the Controller to establish a voluntary compliance programme (VCP) for eligible unclaimed property holders. The proposal directs the Comptroller to waive the 12% interest imposition if a holder participates in the programme and completes all the VCP requirements. The bill will be sent to Governor Gavin Newsom (D) for his consideration.
US: Corporate book minimum tax to be effective for 2023
The recently enacted Inflation Reduction Act imposes a corporate alternative minimum tax (AMT) based on financial statement income (book minimum tax, or BMT). The BMT is effective for tax years beginning after 31 December 2022.
Colombian government presents tax reform bill
The leader of the left-wing coalition ‘Pacto Histórico,’ Gustavo Petro, took office as the 61st Colombian president on 7 August. Within a day of inauguration, the executive branch presented a new tax reform bill (the tax reform bill), which has the intended goals of making the Colombian tax system more egalitarian, progressive, and efficient. The government hopes to meet these goals through provisions focused on taxing high-net-worth taxpayers, preventing tax evasion and avoidance, and promoting the improvement of the public health system and the environment.
US Tax Readiness webcast: How does current law interact with Pillar Two?
Watch the replay from 18 August, where our panel of specialists discuss the significant interplay between current US tax law and Pillar Two. Our panel will talk about the latest developments, and how, for example, Pillar Two will interact with GILTI and the foreign tax credit.
EU Tax News - May/June 2022
EU tax news is a bimonthly newsletter with summaries of all the relevant ECJ and national court cases and decisions, and EU policy initiatives related to EU direct tax law and state aid. The newsletter is prepared by members of PwC's EU direct tax group (EUDTG) from across Europe.
International tax update for multinationals operating in the UK - period to 5 August 2022
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
International Tax News - July 2022
International Tax News is designed to help multinational organisations keep up with the constant flow of tax developments.
US Senate passes “Inflation Reduction Act” reconciliation bill
The US Senate, on 7 August, voted 51 to 50 along party lines to pass the “Inflation Reduction Act" budget reconciliation bill.
US Senate begins budget reconciliation action on revised Inflation Reduction Act
The US Senate on 6 August voted 51 to 50 along party lines to begin floor action on a revised “Inflation Reduction Act'' budget reconciliation bill. The tie-breaking vote in the evenly divided Senate was provided by Vice President Kamala Harris.
European Commission proposal would address distortions caused by foreign subsidies
After a period of negotiations, the Council of the European Union and the European Parliament have reached political agreement on the text of a draft regulation on foreign subsidies that, in certain cases, are distorting the internal market. This proposal aims to ensure a level playing field in the internal market. This draft regulation is an important next step that follows the Commission's publication of a White Paper on distortive subsidies in June 2020.
The new UK-Luxembourg double tax treaty
The UK and Luxembourg recently signed a new double tax treaty and protocol which, once ratified and in force, will replace the existing treaty which dates back to 1967.
US - Corporate book minimum tax proposed as part of budget reconciliation bill
In the US, a corporate alternative minimum tax (book minimum tax, or BMT) has been proposed for corporations with profits over $1 billion as part of the budget reconciliation bill released on 27 July The provision, proposed to be effective for tax years beginning after 2022, could impose a minimum tax equal to the excess of 15% of an applicable corporation’s adjusted financial statement income over the corporate alternative minimum tax foreign tax credit for the tax year.
Digital tax megabyte for July 2022
This edition includes an OECD consultation on consolidated Pillar 1 Amount A materials, UK draft legislation for implementing Pillar 2 and an update on Maryland's US Sales Tax rules. It also covers Indian guidelines on crypto assets and an insight into the global indirect treatment of non-fungible tokens (NFTs). There are updates too on Kenyan amended VAT treatment of various digital services, but its failure to sanction a rise the in DST rate. We also include draft legislation on transposing the EU's DAC 7 on platform reporting for Italy, Poland and Germany with an update on the UK's plans following consultation on implementing the OECD Model Rules in this area.
Germany releases draft bill on taxation of payments for German-registered rights
The German Federal Ministry of Finance recently published a proposal that includes far-reaching changes to the taxation of payments for IP rights that are registered in a German register between foreign taxpayers.
Australian Monthly Tax Update - August 2022
Welcome to the August 2022 edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.
Korea releases draft Pillar Two rules
As part of 2022 tax reform, the Korean Ministry of Strategy and Finance (MOSF) recently announced the introduction of draft domestic legislation for a global minimum tax. Korea’s summary draft rules, released in Korean, correspond closely to the OECD’s Pillar Two Model Rules, which was led by the OECD / G20 and has been agreed upon by 141 countries in the Inclusive Framework. Detailed legislation is expected in December.
UK publishes draft Pillar Two legislation
For inclusion in Finance Bill 2022/23, the UK has released draft legislation to introduce the OECD’s Pillar Two Model Rules into UK law. The draft legislation includes an Income Inclusion Rule (IIR), to be known in the UK as the Multinational Top-up Tax, which will apply to accounting periods beginning on or after 31 December 2023.
UK transfer pricing documentation: draft legislation released
HMRC has released the first tranche of draft legislation to change the UK’s transfer pricing documentation rules.
Treasury and IRS release corrections to 2021 foreign tax credit regulations
The US Treasury has released corrections to the final foreign tax credit (FTC) regulations that were published on 4 January 2022 in the Federal Register.
International tax update for multinationals operating in the UK - period to 22 July 2022
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
Derivative Hedging Transactions
In recent months, we have seen significant volatility in FX and commodity markets, and are now seeing increases in interest rates in response to rapidly rising prices. The position is often complicated, and exposures are often managed on a group basis. Fair value movements on unhedged positions, or positions managed on an overall group basis, can lead to significant cash tax exposures, and can also lead to impacts on distributable reserves.
Dutch Ministry of Finance publishes new transfer pricing decree
The Dutch Ministry of Finance published a transfer pricing decree on 1 July 2022, replacing the prior version from 2018, but also retracting the prior guidance on the use of a spread for financial services companies, so-called financial intermediaries (‘Dienstverleningslichamen’ or DVLs), in a questions and answers decree from 2014.
Chilean Government presents Tax Reform Bill
The Chilean Executive Branch has submitted a comprehensive tax reform bill to the Chilean Congress, which proposes to amend certain matters related to income tax, wealth tax, and shareholder taxation. The bill also would incorporate new measures focused on preventing tax avoidance and tax evasion and would reduce the number of tax exemptions.
EU Commission launches public consultation on measures restricting the role of tax 'enablers' (advisors)
The European Commission has launched a public consultation on measures to address the role of “enablers that facilitate tax evasion and aggressive tax planning” in the European Union (Securing the Activity Framework of Enablers - SAFE).
Election Commitments Report reveals potential Australian changes to royalty and interest deductibility
The Australian independent Parliamentary Budget Office (PBO) has released its estimates of the budget impacts of the incoming Australian Labor Party (ALP) Government’s proposed tax policy measures. This 2022 Election Commitments Report is prepared based on the election commitments of the new government. The report is not formal government policy, much less legislation. However, the report is intended to ‘hold parties to account’ regarding their election commitments.
OECD releases a Progress Report on Amount A of Pillar One
The OECD released a Progress Report on Amount A of Pillar One on 11 July 2022. The OECD is seeking public comments by 19 August 2022. This alert provides a short overview of the report and some initial observations.
Hong Kong proposes refinements foreign source income exemption regime for passive income
The Hong Kong Government recently launched a consultation on a proposal to refine Hong Kong’s FSIE regime for passive income in response to the EU's concern over potential double non taxation arising from tax exemption for offshore passive income in Hong Kong.
Italian Supreme Court rules that withholding taxes levied on dividends distributed to German and US investment funds are incompatible with EU law
On 6-7 July 2022, the Tax Section of the Italian Supreme Court (“Corte di Cassazione”, the highest Court in Italy as regards tax matters) issued seven important judgments in which it ruled that Italian withholding taxes levied on dividends distributed to a German investment fund and six US investment funds are incompatible with EU law.
International tax update for multinationals operating in the UK - period to 8 July 2022
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
Foreign Exchange Management
The FX markets have been particularly volatile in recent months, and this is likely to remain the case given ongoing uncertainties and international developments. Managing FX exposures is therefore taking on increasing importance, and unhedged positions can cause unexpected accounting and tax considerations, including impacts on distributable reserves and cash tax liabilities.
New Swedish rules regarding withholding tax on dividends to foreign investors
The Swedish Ministry of Finance recently issued a draft referral to the Council of Legislation (Lagrådet) for consultation on the proposed new rules regarding withholding tax on dividends, replacing the current rules in the Coupon Tax Act (Kupongskattelagen). This PwC tax blog highlights the major changes and when they are coming into force.
ATAD 3: The European Parliament provides initial thoughts
Rob Mellor and Dan Jones from PwC UK have provided an update to ATAD III on some encouraging news from the European Parliament's review of the draft Directive
Australian Monthly Tax Update - July 2022
Welcome to the July 2022 edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.
US Tax Readiness webcast: Unlock value through global indirect and US state tax reporting
Join our specialists on 27 July at 7pm as they discuss how companies are dealing with more sources of data in real-time at a granular level and the operational and compliance challenges for both direct and indirect tax departments. We will focus on state and local income tax, sales and use tax, and global VAT compliance strategies and benefits.
International Tax News - June 2022
International Tax News is designed to help multinational organisations keep up with the constant flow of tax developments.
Germany extends ability to claim exemption from IP withholding tax by one year
The German Ministry of Finance recently issued a circular to extend the ‘simplified withholding tax procedure’ regarding German IP nexus rules to payments received before 1 July 2023.
Digital tax megabyte for June 2022
This edition includes an insight into Kenya's new ESS rules and a publication on AsiaPac's ESS and other indirect tax digital development path as well as some new VAT incentives in Thailand. An overarching Pillar 1 consultation may be announced in early July while the UK has confirmed that its Pillar 2 rules will apply to accounting periods beginning on or after 31 December 2023. Nepal and Tanzania are the latest countries to announce the potential introduction of digital services taxes. We also cover India Guidelines on application of WHT on transfer of crypto assets.
US Tax Readiness webcast: Breaking through reporting disruption with a more sustainable strategy
The rapidly changing tax and business landscape requires companies to build a more sustainable data and reporting strategy that addresses both global transparency and digitization trends. Watch the recording from 29 June where our panel of specialists discussed practical steps for adapting to change and preparing for the future.
Webcast: Pillar 2 – the tools and technology that can help you achieve compliance
You can now watch the recording of this webcast where we provide an update on timings and technical developments, outline some of the operational impacts that the Pillar 2 rules could have on your organisation, and the steps you can take to manage the initial adoption and embed into business-as-usual.
International tax update for multinationals operating in the UK - period to 24 June 2022
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
CJEU judgment on German withholding tax refund rules
On 16 June 2022, the Court of Justice of the European Union (CJEU) rendered its judgment in the case C-572/20 (ACC Silicones) finding that German requirements for withholding tax refund claimed by non-resident corporate taxpayers with a portfolio shareholding are in breach of EU law.
International Tax News - May 2022
International Tax News is designed to help multinational organisations keep up with the constant flow of tax developments.
EFTA Court rules on the Norwegian interest limitation rules
The EFTA Court has ruled the combination of the Norwegian interest limitation rules and group contribution rules to be in breach of the freedom of establishment.
International tax update for multinationals operating in the UK - period to 10 June 2022
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
General Court of the EU decision on UK CFC State aid
The General Court of the EU has dismissed both the UK and ITV plc’s applications made in respect of the European Commission’s UK Controlled Foreign Company State aid decision.
Digital tax megabyte for May 2022
The latest addition to our series of brief insights into the workings of the UK and supranational bodies reviewing the taxation of digitalisation of business. This edition includes an OECD announcement on a delay to Pillar One, our latest Africa tax report that includes digital economy insights and a proposed 6% streaming levy in Denmark..There is also insight into the UK's proposal to introduce platform reporting rules with effect from 1 January 2024.
FATCA and CRS ─ Canada Revenue Agency outlines audit plans
The Canada Revenue Agency (CRA) is ready to start auditing that financial institutions are FACTA and CRS compliant.
Australian Monthly Tax Update - June 2022
Welcome to the June 2022 edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.
OECD launches public consultation documents on Pillar One - Amount A: Tax Certainty
The OECD released the public consultation documents on the Amount A - Tax Certainty Framework for Amount A and Tax Certainty for Issues Related to Amount A on 27 May 2022.
EU Tax News - March/April 2022
EU tax news is a bimonthly newsletter with summaries of all the relevant ECJ and national court cases and decisions, and EU policy initiatives related to EU direct tax law and state aid. The newsletter is prepared by members of PwC's EU direct tax group (EUDTG) from across Europe.
International tax update for multinationals operating in the UK - period to 27 May 2022
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
Portugal: Deadlines near for TP documentation, filing APA requests
Portugal introduced changes to its Advance Pricing Agreement (APA) regime and transfer pricing (TP) documentation requirements on November 26, 2021. Following these amendments, TP documentation must be prepared by July 15 of the year following the tax calendar year (or the 15th day of the 7th month of the year following the taxpayer’s fiscal year-end). Most large taxpayers also are obliged to deliver the TP documentation file to the Portuguese Tax Authorities.
IRS releases guidance on treatment of deferred compensation expense for Section 250 FDII deduction
The IRS Office of Chief Counsel recently released Generic Legal Advice Memorandum (GLAM) 2022-001 dealing with the allocation and apportionment of deferred compensation expense for purposes of calculating the Section 250 deduction for foreign-derived intangible income (FDII). GLAM 2022-001 concludes that deferred compensation expense that relates to services provided in years prior to enactment of Section 250, but that is deductible post-enactment, may be allocated to deduction eligible income (DEI) and foreign-derived deduction eligible income (FDDEI) if the class of gross income to which the deduction relates includes DEI or FDDEI.
International Tax News - April 2022
International Tax News is designed to help multinational organisations keep up with the constant flow of tax developments.
Digital tax megabyte for April 2022
This edition includes an OECD release on the IT format for sharing digital platform reporting information and an update on the EU attempts to adopt a Directive to implement Pillar Two. It also considers the relevance of 'nudge' letters being sent by the Indian tax authorities and the CJEU decision on Belgian tax reporting on tourist accommodation not being contrary to EU law..
International tax update for multinationals operating in the UK - period to 13 May 2022
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
EU Commission publishes proposal to implement debt-equity bias reduction allowance (‘DEBRA’)
The European Commission has published an EU Directive proposal regarding a debt-equity bias reduction allowance (DEBRA) and a limitation of the tax deductibility of exceeding borrowing costs (the proposal). This proposal, published 11 May 2022, is one of the Commission’s key actions on corporate tax, as set out in the Communication on Business Taxation for the 21st Century.
OECD launches public consultation document on Pillar One - Amount A: Regulated Financial Services Exclusion
The OECD released the public consultation document on the Pillar One - Amount A: Regulated Financial Services Exclusion on 6 May 2022. Comments on the consultation document are due by 20 May 2022. This alert provides a short overview of the proposed approach to the Regulated Financial Services Exclusion and some initial observations.
Canada introduces first package of hybrid mismatch rules
The Department of Finance recently released draft legislative proposals to address hybrid mismatch arrangements, which are cross‑border arrangements that are characterised differently under the tax laws of different countries. These proposals are the first of two separate legislative packages to implement into the Income Tax Act the recommendations of the OECD BEPS Action Plan to eliminate the tax benefits arising from hybrid mismatch arrangements.
Webcast: Global disruption and the impact on doing business in the US
Watch the recording from this webcast on 17 May and gain practical insights from PwC’s economic, deals, and tax policy specialists to stay ahead of the curve.
Portugal Budget proposal targets patent box regime, tax incentives and start-ups
After the appointment of the government following the January elections, the 2022 State Budget Law proposal was presented to Parliament on 13 April. The proposal includes new tax measures and amendments to the tax legislation. The budget law would be effective on the day after its publication.
HMRC’s latest Transfer Pricing and Diverted Profits Tax (DPT) statistics between April 2020 to March 2021 demonstrates that transfer pricing and tackling profit diversion remain a key priority area for HMRC investigators
The statistics report across a variety of transfer pricing areas, including enquiries, Advance Pricing Agreements (APAs), Mutual Agreement Procedures (MAPs), Advance Thin Capitalisation Agreements (ATCAs), DPT investigations and Profit Diversion Compliance Facility cases (PDCFs) highlighting the additional yield, number of cases and length of time to resolve cases, across each area. A summary of the statistics and our view of these are set out in this article.
US Tax Readiness webcast: The Future of Tax Controversy - How companies should prepare
Watch the recording from 4 May where our panel of specialists discuss the controversy challenges companies are facing and ways they can minimize risk to their business operations.
International tax update for multinationals operating in the UK - period to 29 April 2022
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
Webcast: Latest guidance on global minimum tax (Pillar 2)
Where have we reached in this process? What uncertainties remain? And what reactions are we seeing? Watch this webcast replay from 29 April where our global tax policy team and subject specialists discussed the latest guidance on global minimum tax (Pillar 2).
Australian Monthly Tax Update - May 2022
Welcome to the May 2022 edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.
OECD developments may impact insurance multinationals
Insurance MNEs that operate in more than one jurisdiction, and that are within the scope of the OECD’s rules related to Pillar One and Pillar Two, need to monitor further development of these rules and analyze how they may affect them.
OECD issues public consultation document on Pillar One - Amount A: Extractive Exclusion
The OECD released the public consultation document on the Pillar One - Amount A: Extractive Exclusion on 14 April 2022. Comments on the consultation document are due by 29 April 2022. This alert provides a short overview of the proposed approach to the Extractives Exclusion and some initial observations.
International tax update for multinationals operating in the UK - period to 15 April 2022
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
Canadian Government releases 2022 federal budget
The Deputy Prime Minister and Minister of Finance, Chrystia Freeland, presented the government’s budget on 7 April. The budget does not include changes to corporate income tax rates, and does not provide an update on the expected timing of ‘anti-hybrid’ legislation, although the government is committed to releasing draft rules.
Digital tax megabyte for March 2022
This edition includes publication of the Commentary on Pillar 2 GloBE Rules together with the status of attempts to implementation those rules across the EU and also in Switzerland. We focus too on the consultation on the Implementation Framework for the GloBE Rules and on a possible extension of the EU's blacklist criteria for non-cooperative jurisdictions regarding Pillar 2.
Proposed reservations to pending US-Chile Treaty: action in the stalled treaty ratification process
Ratification of the pending US-Chile Treaty, along with other pending treaties, has been stalled — most recently, due to a potential conflict between certain provisions of US tax law enacted in 2017 and the nondiscrimination article and/or other articles of the treaty.
Treasury releases ‘FY23 Green Book’ describing President Biden’s tax proposals for businesses
The White House released its Fiscal Year 2023 Budget (‘FY23 Budget’) on 28 March. Also on 28 March, the US Treasury released the General Explanations of the Administration’s Fiscal Year 2023 Revenue Proposals, commonly referred to as the ‘Green Book’.
International tax update for multinationals operating in the UK - period to 1 April 2022
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
Australian Monthly Tax Update - April 2022
Welcome to the April 2022 edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.
CJEU rules that Portugal’s withholding tax on dividends paid to non-resident investment funds is incompatible with EU Law
The Court of Justice of the European Union (CJEU) has rendered its judgment in the AllianzGI-Fonds AEVN case (C‑545/19) finding that Portuguese withholding tax on dividends paid to non-resident investment funds is in breach of EU Law.
PwC responds to UK government consultation on the implementation of the OECD Pillar 2 rules
The OECD's Pillar 2 rules will establish a global minimum tax regime which will apply to both public and privately held multinational groups with consolidated revenue over €750m. Global agreement has been reached to bring these rules into law during 2022 with the aim of them being in 2023.
US tax readiness webcast: Exploring the details of the OECD Pillar Two Rules Commentary
Watch the replay where our panel of specialists discuss observations and insights into the recently released OECD Commentary to the Pillar Two Model Rules.
Australia Federal Budget Insights 2022-23
The Treasurer delivered the Federal Budget on Tuesday 29 March 2022 - the third handed down against the background of the COVID-19 pandemic. Unsurprisingly, major tax reform was not on the Government’s agenda.
President Biden’s FY 2023 budget proposes new “billionaire” minimum tax; renews call for corporate rate increase and other tax increases
President Biden has sent to Congress a $5.8 trillion FY 2023 budget that proposes new tax increases, including a new 20% minimum tax that would apply to certain high-income individuals, and other measures to reduce federal deficits by $1 trillion over 10 years. New business tax increase proposals include an “undertaxed profits rule” that would replace the current base erosion anti-abuse tax (BEAT). The President’s budget also re-proposes a 28% corporate income tax rate and numerous other tax provisions that were included in his FY 2022 budget.
China's first unilateral APAs under the simplified procedures have been signed
China recently signed unilateral Advance Pricing Arrangements (APAs) with two companies located in the Jiangsu Province and the Guangdong Province, respectively. These were the first two signed unilateral APA cases under the simplified procedures in China since the Public Notice on Matters Regarding the Application of Simplified Procedures of Unilateral Advance Pricing Arrangements became effective. The two cases took four months from application to formal signing, providing the companies with tax certainty on their transfer pricing arrangements in a quick and efficient manner.
Singapore Budget 2022 webcast
Singapore’s FY2022 Budget Statement was announced by the Minister for Finance on 18 February 2022. Watch our webcast (now available on-demand) as we break down the new measures and share insights on what this year’s Budget means for you and your business.
Digital tax megabyte for February 2022
This edition includes details of Pillar One consultations on Nexus/ Revenue Sourcing and on Tax Base plus the expectation of 11 similar papers and an imminent OECD Pillar Two consultation. We note also a push by the EU Council's French Presidency to see Pillar Two impacts in the EU. The US Trade Representative has meanwhile sent Canada comments on its pending DST. Singapore's Budget announced consideration of a domestic minimum top-up tax. The Danish government's proposed introduction of a streaming levy is also under the spotlight and we comment on the Dominican Republic's consultation on VAT on digital services provided by foreign suppliers. The UK is meanwhile consulting again on the possibility of an online sales tax. Malaysia is providing an amnesty covering late registration/payment of its tax on digital services.
EU Tax News - January/February 2022
EU tax news is a bimonthly newsletter with summaries of all the relevant ECJ and national court cases and decisions, and EU policy initiatives related to EU direct tax law and state aid. The newsletter is prepared by members of PwC's EU direct tax group (EUDTG) from across Europe.
International tax update for multinationals operating in the UK - period to 18 March 2022
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
OECD releases Pillar Two Commentary and launches public consultation on the Implementation Framework
The OECD released Commentary and illustrative Examples to the Pillar Two Model Rules (Model Rules) on 14 March 2022. This alert includes several highlights of what is, and is not, in the Commentary, plus some initial observations.
EU Finance Ministers do not reach unanimous support for proposed Pillar Two Directive – will try again 5 April
EU Finance Ministers met on 15 March to debate and ultimately vote on a compromise text covering the introduction of a minimum taxation by the EU Member States. While there was broad support for the compromise text, it was not supported unanimously.
State corporate tax implications of Section 174 changes for 2022
The federal 2017 tax reform act enacted changes to Section 174 applicable for tax years beginning after 2021. Companies computing their first-quarter state income tax estimated payments should be aware of the state income tax implications associated with the federal changes.
Are you complying with the new Mexican controlling beneficiary tax obligation?
The tax reform published in the Official Gazette in November 2021, added a new obligation for Mexican parties. As of 1 January 2022, Mexican legal entities, trusts incorporated under the Mexican legislation, and contracting parties in any other Mexican legal agreement (e.g., Asociación en Participación), must obtain and keep as part of their books and records the applicable, trustworthy, complete, and updated relevant information to each of their ultimate controlling beneficiaries.
New business registry for filing annual returns and beneficial ownership register coming to Ontario
Businesses operating in Ontario should ensure that they are aware of, and comply with, the following: 1) effective 19 October 2021, Ontario corporations and non-Canadian extra-provincial corporations must register and file their annual returns using the Ontario Business Registry; 2) beginning 1 January 2023, privately held Ontario corporations will be required to create and maintain a register of individuals who hold significant control; and 3) retroactive to 25 October 2021, non-competition provisions in Ontario employment agreements are prohibited and void (exceptions apply).
US Tax Readiness webcast: Q1 financial reporting considerations
Watch the replay where our Tax Accounting Services (TAS) specialists take a deep dive into relevant tax accounting matters and recent tax developments.
International tax update for multinationals operating in the UK - period to 4 March 2022
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
Australia - Monthly tax update: March 2022
Welcome to the March 2022 edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.
Transfer pricing podcast: The opening – Transfer pricing is a critical piece of the Pillar Two chessboard
In this TP Talks episode, Horacio Peña (PwC’s Global Transfer Pricing Leader), Kartikeya Singh (Transfer Pricing Principal in PwC’s US National Tax practice), and Giorgia Maffini (Transfer Pricing and Tax Policy Director with PwC UK) discuss the OECD Pillar Two Model Rules, including an overview of the rules, some of the nuances and elements of complexity, and highlights the role of transfer pricing in the new system of Pillar Two taxation.
Australia passes CCIV legislation - which train will lead us to the right destination?
The passing of the Corporate Collective Investment Vehicle (CCIV) legislation in Australia represents a milestone development that began 13 years ago with the recommendations of the ‘Johnson Report’ in 2009.
US Tax readiness webcast: The future of tax - What's your workforce and tax technology strategy in 2022?
Watch the replay where our specialists discussed how businesses are facing a growing list of challenges in 2022 and are increasingly relying on their people and technology systems to do more. Companies have to execute a variety of tasks in order to adhere to burdensome compliance requirements, workforce issues, and evolving tax policy, including OECD’s Pillar Two.
2022/23 Hong Kong Budget
Hong Kong's Financial Secretary announced the 2022/23 Budget on 23 February, outlining the government’s latest tax and fiscal policy directions, support measures and resources allocation with a view to revitalise the economy and relieve the community’s burden.
Finland broadens scope of the Finnish transfer pricing adjustment provision
Finland has introduced a new amendment to the Tax Assessment Procedure Act which entered into force on 1 January 2022.
OECD launches Public Consultation on Pillar One draft Model Rules on Tax Base Determinations
On 18 February 2022, the OECD released draft Model Rules with respect to the Tax Base Determinations under Amount A of Pillar One. Comments to the draft Model rules are due by 4 March 2022.
International tax update for multinationals operating in the UK - period to 18 February 2022
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
Singapore Budget 2022
Singapore’s FY2022 Budget Statement was announced by the Minister for Finance on 18 February 2022. Keep up to date on how businesses can navigate this year’s Budget measures.
Italian Tax Court of First Instance: withholding tax on dividends to Luxembourg investment fund incompatible with EU law
The Pescara Tax Court of First Instance recently ruled that a Luxembourg SICAV is comparable to an Italian investment fund and, therefore, is entitled to the refund of the full withholding tax suffered on the dividends received from Italian companies.
Korean Tax Update - February 2022
The latest edition of our Korean tax update.
International Tax News - December 2021/January 2022
International Tax News is designed to help multinational organisations keep up with the constant flow of tax developments.
Italy issues final circular on hybrid mismatch arrangements
The Italian Tax Authorities recently published the final version of the interpretative Circular Letter on hybrid mismatch arrangements rules, as governed by Legislative Decree 142/2018 that implements the EU’s anti-tax avoidance directives through domestic Italian legislation and that also considers the OECD BEPS report(s) on Action 2.
Observations on key changes to Austria’s revised Transfer Pricing Guidelines
Following the publication of Austria’s draft Transfer Pricing Guidelines (draft ATPG) in 2020, the Austrian Federal Ministry of Finance issued the final Austrian Transfer Pricing Guidelines (ATPG 2021 or Guidelines) in October 2021. The ATPG 2021 extensively revise the 2010 Transfer Pricing Guidelines (ATPG 2010) and aim to reflect the OECD BEPS project-related developments, latest jurisprudence, and administration practice in Austria.
This insight provides a comprehensive overview of the key changes in the final ATPG 2021 compared to the draft ATPG, as well as the ATPG 2010.
International tax update for multinationals operating in the UK - period to 4 February 2022
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
OECD launches Public Consultation on Pillar 1 draft Model Rules on Revenue Sourcing and Nexus
On 4 February 2022, the OECD released draft Model Rules with respect to nexus and revenue sourcing under Amount A of Pillar One. Comments to the draft Model rules are due by 18 February 2022. This alert provides a short overview of the draft Model Rules and some initial observations. It should be noted that this is the first in a series of several sets of rules that the OECD is expected to release over the coming months, with very short comment periods, as part of a 'rolling consultation'.
Mexico extends tax benefits for IPOs & bonds
The Mexican Government has published a Decree that extends, and in some cases expands to fiscal year 2025, the tax benefits initially granted through a previous Decree. That previous Decree, published in January 2019 (originally ending in FY 2021), related to the withholding tax on interest paid by Mexican residents for publicly traded corporate debt bonds and a reduced tax rate for certain taxpayers on the capital gain obtained from the sale of public shares through an initial public offering (IPO).
Observations on Q&As issued by China’s STA on “Anti-Tax Avoidance During Pandemic Prevention and Control”
On 30 September 2021, the International Taxation Department of China’s State Taxation Administration (STA) released its “Questions and Answers on Anti-Tax Avoidance During Pandemic Prevention and Control” (the "Q&A") on its portal. This is the first time that the STA has provided, in written form, prescriptive instructions for tax authorities and MNEs when analyzing the impact of the COVID pandemic from a transfer pricing perspective.
India Budget 2022 - impact on foreign investors and multinationals
The Indian Finance Minister presented the Union Budget for 2022-23 (Budget 22) on 1 February 2022. With India’s current-year economic growth estimated to be 9.2%, Budget 2022 focuses on infrastructure spending with an aim to boost growth amid continued disruption from the COVID-19 pandemic. It also makes a strong pivot toward the digital economy, climate change, clean energy transition, and ease of living.
Introduction of a federal corporate tax in the United Arab Emirates
On 31 January 2022, the UAE Ministry of Finance announced the introduction of a federal corporate tax in the UAE that will be effective for financial years starting on or after 1 June 2023.
Cyprus Parliament passes bills aimed at international ‘tax abuse,’ extends DAC6 deadline, and updates treaties
The Cyprus Parliament recently passed two bills amending the Cyprus tax legislation, with the goal of strengthening the Cyprus tax framework in order to prevent abuse, evasion, and avoidance of tax. In addition, the Cyprus Tax Authority (CTA has announced an additional extension of the submission deadline for DAC6 reports (without penalties) to 31 January 2022. Cyprus also has several treaty updates.
Transfer pricing podcast: Putting the TP into ESG
In this episode, we feature an excerpt from PwC’s Global Transfer Pricing Conference, focusing on ESG factors as drivers of value creation and levers to manage risks, concentrating on supply chain/value chain analysis, tax transparency, intercompany financial transactions, and deals.
Digital tax megabyte for January 2022
This edition includes the publication of Nigeria's Finance Act 2021 with tis effective 6% Digital Service Tax (DST).and the announcement by the UAE of a Federal corporate tax with rates potentially tailored to the Pillar Two minimum tax regime. We've seen the launch of an EU consultation on digital VAT, as well as of a Ukrainian Information Notice for VAT on e-services. We also comment on debates around an e-levy in Ghana and the optimism being shown in relation to changes to US GILTI.
Australia - Monthly tax update: February 2022
Welcome to the first 2022 edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.
2022 US Tax Policy Outlook: Managing constant change
The risk of higher taxes in both the United States and other countries and complex compliance challenges can leave key decision makers wondering how to identify strategic opportunities for growth and expansion. Managing through policy changes can be high stakes — tax can play a key role.
EU Tax News - November/December 2021
EU tax news is a bimonthly newsletter with summaries of all the relevant ECJ and national court cases and decisions, and EU policy initiatives related to EU direct tax law and state aid. The newsletter is prepared by members of PwC's EU direct tax group (EUDTG) from across Europe.
Canadian 2022 Annual tax filing and remittance deadlines for corporations
Canadian corporations are required to file annual income and capital tax returns (due six months following each taxation year-end), and to meet several other Canadian annual filing and remittance deadlines. This Tax Insights outlines some of the more common compliance requirements to be considered at this time of year. Others also may apply (e.g. T4A information return to report certain benefits to shareholders).
International tax update for multinationals operating in the UK - period to 21 January 2022
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
Webcast: Exploring the impacts of the recent Pillar 2 and US Policy announcements
Watch the latest in our Delivering Tax: Creating value in a changing world webcast series, where our panel explored the mechanics of the new Pillar 2 system, its effects on business and the interconnectivities with tax proposals from the Biden administration in the US.
Key insights from the 2021 US final foreign tax credit regulations
The 2021 Final Regulations were published in the Federal Register on 4 January 2022, and represent the third set of final regulations that have been issued with respect to the core provisions of the US foreign tax credit regime following the 2017 Tax Cut and Jobs Act. The 2021 Final Regulations are among the most significant developments in the US FTC regime during its 100+ year existence, as they fundamentally change the definition of what is a creditable foreign income tax under Sections 901 and 903.
US webcast - Tax Readiness: The OECD's Pillar Two Model Rules on a global minimum tax
Watch the replay from this webcast held on 10 January 2022, as our panel of PwC specialists discuss Model Rules, including definitions, scope, timeline, tax accounting issues, administration of the rules, and touch briefly on the December 22 EU draft Directive on minimum taxes, as well as the interactions with current US legislative proposals.
International tax update for multinationals operating in the UK - period to 7 January 2022
Welcome to our first edition for 2022 on recent developments in international and treasury tax of interest to multinationals operating in the UK.
Digital tax megabyte for December 2021
This edition includes the publication by the Model Rules for the 15% minimum ETR under Pillar Two of the G20/OECD Inclusive Framework digitalisation project and by the European Commission on proposals to implementation them across the EU. There is also a warning from the Australian tax authorities for businesses to be prepared for Pillar One and Pillar Two changes. It also provides an update on the US Senate Finance Committee progress on the Build Back Better reconciliation bill, Canada consulting on its deferred DST, a Nigerian statement on the reasons they wouldn't sign the global deal and plans for Cyprus to increase its tax rate as a result of Pillar Two. The UK concluded its G7 presidency with an acknowledgement of the digital tax achievement.
US webcast: Tax Readiness - Impacts of the 2021 final foreign tax credit regulations
US Treasury and the IRS recently released final regulations addressing various aspects of the foreign tax credit (FTC) regime. Join our panel of PwC specialists on Wednesday 19 January at 8pm as they discuss these final regulations and the impact they may have on taxpayers.
International Tax News - November 2021 edition
International Tax News is designed to help multinational organisations keep up with the constant flow of tax developments.
Digital tax megabyte for December 2021
A collection of the brief insights throughout November 2021 of the type provided on an ad hoc basis in our Latest digital tax byte update. This edition includes the publication by the Model Rules for the 15% minimum ETR under Pillar Two of the G20/OECD Inclusive Framework digitalisation project and by the European Commission on proposals to implementation them across the EU. There is also a warning from the Australian tax authorities for businesses to be prepared for Pillar Oen and Pillar Two changes. It also provides an update on the US Senate Finance Committee progress on the Build Back Better reconciliation bill, Canada consulting on its deferred DST, a Nigerian statement on the reasons they wouldn't sign the global deal and plans for Cyprus to increase its tax rate as a result of Pillar Two. The UK concluded its G7 presidency with an acknowledgement of the digital tax achievement.
US Treasury and IRS release final foreign tax credit regulations
On 28 December 2021, the US Treasury and the IRS released final regulations addressing various aspects of the foreign tax credit (FTC) regime.
US webcast - Tax Readiness: The OECD's Pillar Two Model Rules on a global minimum tax
Join our panel of PwC specialists on Monday 10 January 2022 at 7pm, as they discuss Model Rules, including definitions, scope, timeline, tax accounting issues, administration of the rules, and touch briefly on the December 22 EU draft Directive on minimum taxes, as well as the interactions with current US legislative proposals.
Cyprus Minister of Finance presents 2022 budget to Parliament
The Cyprus Minister of Finance (MoF) recently presented to parliament the proposed 2022 budget and envisaged fiscal policy plan for the next three-year period. The MoF included an outline of the government’s vision for a possible ‘mini-reform’ of the Cyprus tax system.
EU Commission releases draft Directive proposing measures to prevent the misuse of shell entities for tax purposes
The European Commission has published the text of a draft Directive laying down rules to prevent the misuse of shell entities for tax purposes and to amend Directive 2011/16/EU on Administrative Cooperation (DAC).
European Commission's Directive proposal on implementing Pillar Two 15% minimum effective tax rate in the EU
On 22 December 2021, the European Commission published its proposal for a Council Directive “on ensuring a global minimum level of taxation for multinational groups in the Union” aimed at implementing the OECD Pillar Two Model Rules on a 15% minimum effective tax rate in the EU Member States.
OECD releases Pillar Two Model Rules
The OECD released the long-awaited Pillar Two 15% minimum effective tax rate Model Rules on 20 December, just days before the expected release of a draft EU Directive on minimum taxes.
PwC Annual Global Crypto Tax Report 2021
This year's Report is more exhaustive and includes insights/developments from a wider list of countries. In addition, it covers the tax implications of several key, newly emerging areas such as NFTs and DeFi.
International tax update for multinationals operating in the UK - period to 10 December 2021
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK. The next edition will be published on 10 January 2022.
Senate Democrats release initial Build Back Better reconciliation tax proposals
Senate Finance Committee Chairman Ron Wyden has released 1,180 pages of draft Finance amendment bill text for Senate consideration of the “Build Back Better” reconciliation bill (H.R. 5736). The Finance amendment bill text would amend H.R. 5736 as passed on 19 November by the House. Chairman Wyden noted that the bill text is subject to further revisions.
Transfer Pricing in 5 Minutes, Episode 6: UK Transfer Pricing Documentation Changes
Following the release by HMRC on 30 November 2021 of the outcome to its consultation, there are a number of significant changes on the way for UK transfer pricing documentation. Dan Pybus, PwC UK Transfer Pricing Partner, discusses the key developments and next steps with PwC's Diane Hay.
India Digital Tax update – US and India agree on transitional approach
The Indian Finance Ministry recently issued a press release announcing that it had agreed with the United States on a transitional approach to the 2% Indian Equalisation levy (the ‘Indian EL’ or digital tax) on e-commerce supply or services. The US Treasury also announced this agreement through a press release.
US - Delaware Supreme Court invalidates Division’s NOL limitation policy
The Delaware Supreme Court has found that the Division of Revenue’s policy limiting a corporate income taxpayer’s net operating loss (NOL) deduction to the amount of its federal consolidated group’s NOL violated Delaware statutory law requiring corporate taxpayers to report as stand-alone entities.
International Tax News - October 2021 edition
International Tax News is designed to help multinational organisations keep up with the constant flow of tax developments.
International tax update for multinationals operating in the UK - period to 26 November 2021
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
Poland: Significant corporate tax changes arriving in 2022
Polish President Andrzej Duda has signed legislation commonly referred to as the ‘Polish Deal.’ The legislation includes provisions that are expected to impact the taxation of investments and business activity in Poland.
Korean Tax Update - November 2021
The latest edition of our Korean tax update.
International tax update for multinationals operating in the UK - period to 12 November 2021
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
European Parliament votes to pass public country-by-country reporting
Following a final debate between MEPs in the European Parliament plenary session, a majority of MEPs voted on 11 November to pass changes to amend Directive 2013/34/EU, which deals with financial reporting of certain types of undertakings (the EU Accounting Directive). This vote follows the political agreement reached with the Council in June and a further updated text that was agreed in September 2021. The amendments have become known as public country-by-country reporting (pCbCR) requirements.
Draft legislation published on taxation of qualifying asset holding companies
The UK Government has published the full draft legislation on its new regime for the taxation of qualifying asset holding companies (“QAHCs”).
Australian R&D tax offset - understanding affiliates and connected entities is key to getting your aggregated turnover calculation correct
The concepts of aggregated turnover, connected entity and affiliate are important in determining the type of research and development (R&D) offset available to an R&D entity. The determination of aggregated turnover can be a complex and time consuming exercise. Recently, the Australian Taxation Office (ATO) has issued four tax determinations to provide guidance to taxpayers when calculating their aggregated turnover.
US - House delays vote on Build Back Better reconciliation bill, passes infrastructure bill
House Democratic leaders on 5 November announced that they would delay voting on a $1.75 trillion “Build Back Better” reconciliation bill (H.R. 5376) that includes more than $1.5 trillion in business, international, and individual tax increase provisions. A group of moderate House Democrats insisted that a vote on the bill should be held only after the Congressional Budget Office reports on the total cost of the legislation. Additional offsets include increased IRS enforcement measures and savings from the repeal of a Medicare prescription drug rebate rule.
Texas adopts significant changes to research and development tax credit rule
Texas recently promulgated significant amendments to Texas Admin Code Sec. 3.599 concerning the research and development activities franchise tax credit.
Mexico’s 2022 budget includes numerous tax changes
The Mexican Congress recently approved several changes to different tax laws as part of the proposed 2022 budget. These changes include amendments to the Mexican Income Tax Law (MITL), the Value-Added Tax Law (VATL), and the Mexican Federal Tax Code (MFTC). These amendments are still pending publication in the Federal Official Gazette; most of them are expected to enter into force on 1 January 2022.
Louisiana adopts transfer pricing managed audit program
The Louisiana Department of Revenue has announced a voluntary initiative for corporate income taxpayers to resolve intercompany transfer pricing issues through a new Louisiana Transfer Pricing Managed Audit Program beginning in November.
International Tax News - September 2021 Edition
International Tax News is designed to help multinational organisations keep up with the constant flow of tax developments.
Australia - Monthly tax update: November 2021
Welcome to the November edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.
International tax update for multinationals operating in the UK - period to 29 October 2021
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
Australian Taxation Office releases decision impact statement on the Glencore transfer pricing case
The Australian Taxation Office (ATO) recently released its decision impact statement in relation to the transfer pricing decision in Commissioner of Taxation v Glencore Investments Pty Ltd, affirming that the decision outcome was ‘mostly unfavourable to the Commissioner’. The decision impact statement follows the High Court’s refusal in May 2021 for the Commissioner to apply for special leave to appeal the decision of the Full Federal Court of Australia.
Digital tax megabyte for October 2021
This edition includes announcements around a new OECD/G20 Inclusive Framework Statement on 8 October, while the Irish Budget on 12 October gave a little more detail on Ireland's plans and G20 Finance Ministers gave a brief endorsement. A subsequent agreement then covered transitional relief for DSTs in UK, France, Italy, Spain and Austria while India seems to have indicated it will await 'implementation' of the deal. We also cover updates on the US domestic proposals which are linked to the deal, a Latvian proposal that would have introduced a DST and the news than Canada will progress its DST legislation but hold it in abeyance for now.
US - IRS issues guidance on LLC eligibility for tax-exempt status
The IRS recently issued Notice 2021-56, which sets forth standards that a limited liability company (LLC) must satisfy to be recognized as tax-exempt under Section 501(c)(3). The Notice also requests comments from the public by 6 February 2022 on specific issues relating to tax-exempt status for LLCs.
Italy issues draft circular on hybrid mismatch arrangements
The Italian Tax Authorities recently launched a public consultation on the draft interpretative Circular Letter, which, at 111 pages, covers the application of the hybrid mismatch arrangements rules as governed by Legislative Decree 142/2018 that implements the ATAD Directives through domestic Italian legislation.
Colombia enacts tax reform legislation
Tax Reform Bill No. 2155, which incorporates various changes to Colombia’s national tax system, was published on 14 September 2021.
US compromises with the UK, France, Italy, Spain and Austria on digital services taxes and trade actions
Austria, France, Italy, Spain, the United Kingdom and the United States have issued a joint statement on a compromise reached regarding digital services taxes and related unilateral measures. It follows the OECD Inclusive Framework statement of 8 October which contained details on unwinding existing DSTs and an agreement not to introduce further unilateral measures in the lead-up to the implementation of Pillar One.
The new international tax framework and Canada’s digital services tax
Following the OECD’s recent announcement that 136 countries, including Canada, had committed to fundamental changes to the international corporate tax system, Deputy Prime Minister and Minister of Finance, Chrystia Freeland, confirmed Canada’s commitment to this international agreement, and announced that Canada still intends to move ahead with legislation finalizing a digital services tax (DST) by 1 January 2022 (as announced in the federal government’s 2021 budget). However, the DST would only be imposed if the multilateral convention implementing Pillar One has not come into force by 31 December 2023. In that event, the DST would be payable as of 2024 in respect of revenues earned since 1 January 2022.
US Treasury defers applicability dates for foreign currency guidance
Notice 2021-59, recently released, states that Treasury and the IRS plan to defer the applicability dates of certain final Section 987 regulations and certain related regulations by an additional year, now to tax years beginning after 7 December 2022. These regulations already had been deferred under prior Notices, including most recently under Notice 2020-73 to tax years beginning after 7 December 2021.
International tax update for multinationals operating in the UK - period to 15 October 2021
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
OECD Inclusive Framework - Pillar One and Two Blueprints
On 8 October 2021, 136 countries of the 140 members of the OECD Inclusive Framework on Base Erosion and Profit Shifting committed to fundamental changes to the international corporate tax system. Read our flyers to find out more about why Pillar One and Two are so important.
Hong Kong commits to amend its tax system by 2022 as EU puts it on ‘greylist’
The Council of the European Union recently added various jurisdictions, including Hong Kong, to Annex II to the Council conclusions on the revised EU list of non-cooperative jurisdictions for tax purposes, commonly known as the 'greylist', with effect from 5 October 2021, following a review of their foreign source income exemption regimes.
136 countries reach political agreement on a new international corporate tax framework
On 8 October 2021, 136 out of the 140 countries of the OECD Inclusive Framework on Base Erosion and Profit Shifting (IF) politically committed to potentially fundamental changes to the international corporate tax system. Read our Tax Policy alert.
ECJ rules the Spanish Financial Goodwill amortization regime constitutes an aid scheme
The European Court of Justice (“ECJ”), sitting as the Grand Chamber, recently dismissed all the appeals lodged by different beneficiaries of the regime and the Kingdom of Spain against the decisions of the General Court of the European Union in November 2018. The dispute between the Spanish Government, the impacted companies and the European Commission has been ongoing for more than fifteen years.
Webcast: OECD Digitalisation Announcement
Join us on Wednesday 20 October at 3pm for a deeper discussion on how the recent developments with the OECD, Inclusive Framework and G20 might affect your business.
International tax update for multinationals operating in the UK - period to 1 October 2021
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
Canada: Liberal party tax platform - What it could mean for you and your business
On 20 September 2021, Canadians re-elected a federal Liberal minority government. The Liberals’ election platform does not propose any sweeping general corporate or personal income tax or GST/HST rate changes. Given that it will be a minority government, the Liberals will require the support of another federal party to enact their proposals.
Digital tax megabyte for September 2021
This edition includes the latest from both sides of the US Congress on international tax reform and from the Philippines Parliament on VAT for digital services, proposals from the Czech Ministry of Finance on reporting by platforms in accordance with DAC7, Vietnam's incoming regime that goes beyond reporting to require withholding at source and Pakistan's application of withholding tax to online marketplaces. Some recent developments in relation to VAT on e-services in South Africa warrant attention. Singapore has clarified aspects of its e-commerce GST regime.
Australia - Monthly tax update: October 2021
Welcome to the October edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.
EU Tax News - July/August 2021
EU tax news is a bimonthly newsletter with summaries of all the relevant ECJ and national court cases and decisions, and EU policy initiatives related to EU direct tax law and state aid. The newsletter is prepared by members of PwC's EU direct tax group (EUDTG) from across Europe.
International Tax News - August 2021 Edition
International Tax News is designed to help multinational organisations keep up with the constant flow of tax developments.
New Zealand Government introduces omnibus tax bill
On 8 September 2021, the Government introduced the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Bill to Parliament. The Bill will be referred to the Finance and Expenditure Select Committee shortly for public consultation, and is expected to be passed by 31 March 2022. The Bill contains a variety of policy and technical changes.
US webcast: US tax legislation advances under budget reconciliation
Watch the replay from this webcast held on Tuesday 21 September 2021, where our policy specialists explored the tax proposals being considered by the House of Representatives as part of “Build Back Better” reconciliation legislation, potential issues and challenges facing tax executives, and what companies should be doing in anticipation of potentially large scale changes.
CJEU decision on Belgian excess profits regime
The European Court of Justice has decided the Belgian excess profits regime constitutes an aid scheme and has referred the case back to the General Court. The current dispute between the Belgian government, the impacted Belgian companies and the Commission has been ongoing for many years.
US passthrough entity tax changes in House Build Back Better bill
The House Ways and Means Committee on September 15 approved tax increase and tax relief proposals that are to be acted on by the House of Representatives as part of “Build Back Better” reconciliation legislation. In this Tax Insights, we outline the key tax provisions of the bill that affect partners, partnerships, and other passthrough entities.
House Ways and Means Committee approves reconciliation tax bill
The House Ways and Means Committee on 15 September approved tax increase and tax relief proposals that are to be acted on by the House of Representatives as part of ‘Build Back Better’ reconciliation legislation. Significant business and international provisions in the Ways and Means Committee-approved bill include changes to the corporate tax rate, new interest expense rules, modifications to international provisions, and the extension of expensing for research and experimental costs under Section 174.
US Senate Finance Committee Chair proposes significant partnership tax changes
Senate Finance Committee Chair Ron Wyden (D-Ore) has released a Discussion Draft of legislation that would significantly revise the treatment of partnerships and partners under Subchapter K of the Internal Revenue Code. Wyden’s office also released a one-page summary and a 10 page, section-by-section description of the proposals.
Nontaxable IRC Sec. 965 income ruled included in calculation of Arkansas NOL
An Administrative Law Judge (ALJ) ruled that the calculation of a taxpayer’s Arkansas net operating loss (NOL) carryforward must be adjusted to include the taxpayer’s IRC Sec. 965 income excluded from Arkansas taxable income. Although IRC Sec. 965 income is not subject to tax in Arkansas, state law requires nontaxable income to be added to a taxpayer’s gross income when measuring an Arkansas NOL carryforward.
Korean Tax Update - September 2021
The latest edition of our Korean tax update.
Mexico budget proposes numerous tax law changes
On 8 September, the Mexican Ministry of Finance submitted to Congress the proposed budget for the year 2022. The Federal Revenue Law for 2022 must be approved by both the House of Representatives and the Senate no later than 31 October 2021.
Mexican tax authorities publish effective tax rates to measure tax risks for large taxpayer
Mexican tax authorities recently released effective tax rates (ETRs) intended to serve as parameters for measuring tax risks that correspond to over 200 economic activities.
US Tax Readiness webcast: Elevating Tax in a Hot Deal Market
Join PwC professionals from our Tax, Deals and Value Chain Transformation practices on Wednesday 29 September at 7pm, for a timely discussion on the important role tax plays in the current deals environment including a discussion of opportunities for the tax department to add value as an integral part of the deal process.
Cyprus receives approval of its Recovery and Resilience Plan, extends DAC6 deadline and ratifies Dutch treaty
The EU Economic and Financial Affairs Council (ECOFIN) recently approved the European Commission’s positive assessment of the Cyprus Recovery and Resilience Plan. In June, the Cyprus Tax Authority announced an additional extension of the submission deadline for DAC6 reports (without penalties) to 30 September 2021 and also the first tax treaty between Cyprus and the Netherlands, which was signed on 1 June 2021, was ratified by Cyprus.
International tax update for multinationals operating in the UK - period to 3 September 2021
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
New Canadian GST/HST filing requirement for non-residents that provide services to Canadians
Unbeknown to many non-residents of Canada, as of 1 July 2021, non-residents that provide services to persons that reside in Canada may be required to: 1) register for Canada’s Goods and Services Tax and Harmonized Sales Tax (GST/HST), and 2) charge and collect GST/HST on services that they provide to Canadian residents that are not registered for GST/HST. Although the primary target of the new rules was electronic supplies made through a “digital platform” and “accommodation platform operators,” the rules apply to most services including investment advisory and portfolio management services.
US - Streamlined filing may lengthen transition tax lookback period
The IRS recently updated its webpage to clarify that a taxpayer that uses the agency’s streamlined filing compliance procedures must include in its submission the tax year in which the Section 965 transition tax is levied (generally, 2017 and/or 2018), if the taxpayer is not compliant with Section 965. Accordingly, the lookback period for any streamlined filing submission involving specified foreign corporations (SFCs) with a Section 965(a) inclusion in 2017 must include 2017 and all subsequent years affected. In addition, taxpayers must account for and report Subpart F income and Section 956 amounts in their submission.
Unexpected DAC6 reporting obligations may arise in Portugal
Portugal transposed the EU DAC6 rules into law on 21 July 2021. This EU Directive covers the mandatory automatic exchange of tax information related to reportable cross-border arrangements. Following this implementing law, the Portuguese tax authorities (PTA) published guidelines on the practical implementation of DAC6 in Portugal. The PTA’s guidelines may create unexpected reporting obligations in Portugal for a ‘relevant taxpayer’ regarding cross-border arrangements when a Portuguese nexus exists.
Digital tax megabyte for August 2021
This edition includes updates on reporting by platforms with the draft legislation on Australia's new Bill, UK consultation on its proposals and Malaysia's guidance on its tourism tax. On Pillars 1 and 2, the US Senate committee on finance has published for consultation its proposals on relevant international tax reform, Barbados has signed up to the IF Statement and Switzerland has reiterated conditions for signing. And Pascal St Amans has noted that not all taxes on digital transactions may be considered the same.
Australia - Monthly tax update: September 2021
Welcome to the September edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.
US - House approves budget resolution, action to come on reconciliation tax bill
In the US, on 24 August 2021, the House voted 220 to 212 to approve the Senate-passed fiscal year 2022 budget resolution that provides reconciliation instructions for spending and tax relief provisions that would be offset in part by corporate and individual tax increases. The House action also calls for a House vote, without amendments, on September 27 on the bipartisan infrastructure bill recently approved by the Senate.
International Tax News - July 2021
Among the topics featured in this month's edition are: 1) Hong Kong - Revising the statutory framework to prepare for tax return e-filing; 2) Spain - New anti-fraud legislation entered into force; 3) United Kingdom - The end of patent box grandfathering; 4) Uruguay - Tax measures in response to COVID-19.
International tax update for multinationals operating in the UK - period to 20 August 2021
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
Pennsylvania updates tax credit and deduction programs
Enacted on 30 June 2021, H.B. 952 provides an update to Pennsylvania’s Qualified Manufacturing Innovation and Reinvestment Deduction (QMIRD). Applicable to tax years beginning after 31 December 2020, the deduction applies to Pennsylvania taxable income (i.e., post-apportionment). H.B. 952 provides updated deadlines for a number of credit and incentive programs in the state and also makes changes to the administration of tax credit programs.
UK ratifies protocol to UK/Germany double tax treaty
The UK ratified the protocol to its double tax treaty with Germany on 26 May 2021, giving UK domestic effect to the protocol which was signed by the two countries on 12 January 2021. Germany has also recently incorporated the protocol into its domestic legislation and exchange of instruments of ratification is therefore expected shortly.
US MTC policy would limit protections from state tax under P.L. 86-272
The Multistate Tax Commission (MTC) recently adopted a revised “statement of information” on the application of Public Law 86-272, which bars states and localities from imposing net income taxes where in-state business activities are limited to solicitation of sales of tangible personal property and ancillary activities. The revised statement takes the position that taxpayers generally engage in unprotected in-state business activities “when a business interacts with a customer via the business’s website or app.”
Disclosure of Uncertain Tax Treatments to HMRC
Large businesses must comply with a new requirement to disclose to HMRC ‘uncertain tax treatments (UTT)’ in Corporation Tax, VAT and PAYE returns due to be filed on or after 1 April 2022. This is a significant change, including for those businesses with a ‘low risk’ rating. HMRC is expected to publish detailed guidance shortly.
US webcast: Tax Readiness: Crypto Market Insights 2021 - Latest trends
Digital assets are much more than moon shots and memes. In this webcast held on Thursday 12 August 2021, our Trust and Consulting panel examined corporate strategies, operational effects, regulatory restrictions, risk factors, accounting implications, and future policy changes.
US Senate approves budget resolution, House returning to consider budget
Following the Senate’s August 10 approval of a $1 trillion bipartisan infrastructure bill, the Senate early in the morning of August 11 completed action on a fiscal year 2022 budget resolution that would provide reconciliation instructions for up to $3.5 trillion in spending and tax relief provisions that would be offset in part by corporate and individual tax increases. House leaders late on August 10 announced that the House would return early from its August recess to consider the Senate budget resolution during the week of August 23. The House had not been scheduled to return until September 20.
US Senate passes bipartisan infrastructure bill; debate to begin on FY 2022 budget resolution
The US Senate has voted 69 to 30 to pass a $1 trillion bipartisan infrastructure bill that includes $550 billion in new spending on highways, bridges, waterways, transit, airports, the electric grid, and broadband. The legislation resulted from months of negotiations by President Biden and a group of Democratic and Republican Senators to reach an agreement to increase spending on infrastructure without tax rate increases. The Senate bill includes other tax and non-tax offsets, including a new cryptocurrency information reporting requirement that is the subject of ongoing debate and a measure reinstating Superfund excise taxes on chemicals.
International tax update for multinationals operating in the UK - period to 6 August 2021
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
Mexico delays deadline for complying with the tax implications of the recent outsourcing reform
Mexico’s Congress recently extended the entry into force of the tax implications for the recently approved outsourcing reform. The approval for the extension was published in the Official Gazette on July 31. In order to meet the extended deadlines, companies should have the controls and tools necessary to comply with the new obligations regarding new outsourcing limitations and rules.
Japan establishes new exempted structures for investment management businesses
The Financial Services Agency of Japan will introduce new business structures to attract foreign investment management businesses, where they may enjoy exemption from registration as a financial instruments business operator. The new exemption structures will come into force by November 2021.
Korea’s Tax Reform Proposals for 2021
The Korean Ministry of Economy and Finance (MOEF) released the government’s tax reform proposals for 2021 (the ‘proposals’). The proposals intend to: i) help drive recovery from the COVID-19 pandemic crisis; ii) increase fiscal support to drive growth of designated strategic technologies and emerging industries to shape the future of growth; iii) increase tax incentives to reduce the economic bipolarization that has deepened during the COVID-19 pandemic; and iv) reinforce anti-tax avoidance measures.
US-UK competent authority agreement resolves Brexit issue for some UK companies
The IRS has released two competent authority agreements entered into by the US and the UK to express their agreement on the application of certain aspects of the limitation on benefits article of the US-UK income tax treaty (Article 23). The expressed agreement is in light of Brexit and the USMCA, which replaced the NAFTA. Under the new agreements, the two countries have agreed that neither Brexit nor NAFTA’s replacement by the USMCA should adversely impact the ability of US or UK tax residents to qualify as ‘equivalent beneficiaries’ under the US-UK income tax treaty.
International Tax News - June 2021
International Tax News is designed to help multinational organisations keep up with the constant flow of tax developments.
Australia - Monthly tax update: August 2021
Welcome to the August edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.
Digital tax megabyte for July 2021
A collection of the brief insights throughout July 2021 of the type provided on an ad hoc basis in our Latest digital tax byte update.
New Rules Allow Japanese Tax Authorities to Unilaterally Appoint Local Tax Administrator of Foreign Taxpayer
In March 2021, as a part of Japan’s 2021 Tax Reform, the Diet passed into law a new measure that allows the Japanese tax authorities to assign a tax administrator to a non-resident taxpayer that the authorities believe has a Japanese tax payment obligation. Under this new measure, the tax authorities will have the ability to designate certain domestic parties, either related or unrelated to the offshore taxpayer (eg unrelated operators of digital platforms “platformers”), as a tax administrator. This law will apply from 1 January 2022.
Senate advances bipartisan infrastructure package with cryptocurrency reporting and Superfund excise tax proposals
President Biden and a bipartisan group of Senators recently announced an infrastructure agreement that calls for $550 billion in new spending together with revenue offsets that include new cryptocurrency information reporting requirements and reinstating a Superfund tax on chemicals.
2021 Japan Tax Reform: incentives to promote corporate transformation and encourage growth
In order to promote corporate transformation and encourage growth in the post COVID-19 environment, the Japanese government is revising the Industrial Competitiveness Enhancement Act (ICEA). This newsletter explains the structure of the revised ICEA, as well as outlining the tax measures that are provided for each of the three areas of focus of the ICEA.
International tax update for multinationals operating in the UK - period to 23 July 2021
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK. This edition includes: 1) Details of draft legislation published on HMRC "Legislation Day"; 2) 130 countries and jurisdictions have joined a new two-pillar plan to reform international taxation rules; and 3) An overview of the UK patent box regime.
Spanish Tax Agency must prove that there are no valid economic grounds to deny the dividend exemption
The Spanish National High Court has rejected the obligation of the taxpayer to prove the existence of valid economic motives when the Spanish Tax Agency has not carried out a minimum evidential investigation to justify the application of the anti-abuse provision.
Declaration of Ultimate Beneficial Ownership now required in Turkey
A new compliance requirement is now imposed on companies doing business in Turkey, calling for declaration of the ultimate beneficial ownership (UBO) information to the tax office.
Australia - Sharing economy reporting regime for marketplaces coming soon
The Australian Treasury has released an exposure draft law for comment that seeks to give effect to the Federal Government’s announcement in its 2019-20 Mid-Year Economic and Fiscal Outlook that it would introduce a third-party reporting regime for the sharing economy. A Fact Sheet was also released and summarises the key aspects of the proposal.
Gibraltar Budget 2021
The Chief Minister delivered his Budget address in Parliament on 20 July 2021.
Texas Economic Development Ch. 313 program to sunset December 31, 2022
Taxpayers considering major projects in Texas should act soon in seeking time to secure the substantial benefits afforded by the Chapter 313 program.
IRS issues guidance on adjustments for CSAs with reverse claw-back provisions for stock-based compensation
The IRS on July 16 released AM 2021-004, a legal advice memorandum issued by Associate Chief Counsel (International) (the "CCM"). The CCM provides non-taxpayer-specific legal advice regarding the potential timing and amount of adjustments arising from transfer pricing examinations of stock-based compensation (SBC) costs involving taxpayers' cost-sharing agreements (CSAs) that included so-called "reverse claw-back" provisions which are assumed to have been triggered by a final decision in the Altera litigation.
Treasury ‘Green Book’ release marks start of US tax policy process affecting Inbounds
Foreign companies investing and operating in the United States will want to carefully review the Green Book, which contains important new details regarding tax proposals that would make sweeping changes to the US international tax rules enacted as part of the 2017 tax reform law (Tax Cuts and Jobs Act, or TCJA). This Insight looks at the key international tax proposals affecting inbound companies.
Korean Tax Update - July 2021
The latest edition of our Korean tax update.
Michigan Appeals Court exempts advertising materials mailed out-of-state from use tax
A long-standing tax dispute has existed in Michigan regarding what constitutes a taxable ‘use’ of direct mail shipped from outside the state. The state has often asserted that the act of directing mailings into the state or the ability to recall an item from the US Postal Service (USPS) would constitute sufficient ‘control’ over the mailings to create a use tax consequence. The Michigan Court of Appeals recently affirmed that a corporation did not have ‘sufficient retention of control’ of advertising materials printed out-of-state and delivered by a third party vendor to Michigan customers to constitute ‘use’ of such materials in-state.
California elective pass-through entity tax bill awaits governor’s signature
California is one step closer to joining the growing number of states adopting pass-through entity (PTE) tax legislation in response to the 2017 federal tax reform legislation. For federal income tax purposes, the 2017 tax reform limited individuals’ itemized deduction to $10,000 for their separately stated state and local income, sales, and property taxes (SALT).
State and local tax—Ohio modifies existing and enacts new tax incentive programs
Enacted on June 30, H.B. 110, the fiscal year 2022-23 budget bill, includes several tax credit and incentive changes that create new programs and enhance existing programs.
Tax Policy Alert: "Fit for 55 package"
The European Commission has published a number of green taxation measures as part of a package called the "Fit for 55 package".
State and local tax—Ohio enacts tax changes, including repeal of sales tax on employment services
Enacted on June 30, H.B. 110, the state’s budget bill, makes several tax changes, including:
US webcast: Tax Readiness: Are uniform corporate tax rules finally on the horizon?
The historic negotiations taking place this year at the OECD, G-7 and G-20 will be critical to the future of international tax reform. In this webcast, held on Tuesday 20 July 2021, we provided an update on the recent OECD and G-20 negotiations to help those in Tax, Treasury, Operations and the C-Suite navigate this complicated landscape.
Tax Policy Alert: OECD Inclusive Framework members agree on a new international corporate tax framework
At the 9th - 10th July G20 meeting, the G20 endorsed the position reached by 132 of the 139 Inclusive Framework members to move forward with the two-Pillar approach and to begin work on the technical discussions in advance of the next OECD/IF and G20 meetings in October.
Brazilian Supreme Court rules ‘Total Output ICMS’ to be excluded from ‘PIS and COFINS’ tax base
The Brazilian Supreme Federal Court recently concluded the judgment of the final motion on its 2017 precedent-setting decision, holding that the Brazilian State-level VAT (‘ICMS’ in Portuguese) should not be included in the tax base of the Federal Social Contributions on Gross Revenues (‘PIS and COFINS’).
Brazilian Federal Government proposes income tax reform
The Brazilian Federal Government recently announced the second phase of its proposed comprehensive tax reform, focusing on income tax. This proposal is in addition to the more than 20 tax bills that were already being intensively debated in the National Congress, particularly in the Senate. The government’s current proposal for corporate tax reform and/or reintroduction of a dividend withholding tax would significantly increase the Brazilian tax burden on many businesses, particularly on foreign investors.
Australia - Monthly tax update: July 2021
Welcome to the July edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.
130 countries agree on a new international corporate tax framework
On July 1, 130 countries of the 139 members of the OECD Inclusive Framework on Base Erosion and Profit Shifting committed to fundamental changes to the international corporate tax system. The 130 countries include the G7 members (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States), emerging economies like Brazil, China and India, and jurisdictions like Switzerland, Singapore, Bermuda, and the Cayman Islands. However, Ireland, Hungary, Estonia, Barbados, Kenya, Nigeria, Peru, Sri Lanka, Saint Vincent and the Grenadines did not sign on to the consensus.
OECD aligns more closely with the EU on reporting obligations for digital platform operators
On 22 June 2021 the OECD issued a report entitled “Model Reporting Rules for Digital Platforms: International Exchange Framework and Optional Module for Sale of Goods.” The Report introduces an optional module to the model reporting rules for digital platform operators published by the OECD in July 2020, extending the scope of the model reporting rules to the sale of goods and the rental of transportation means. Furthermore, the Report provides for an international legal framework to exchange information on income derived through digital platforms.
Biden tax and infrastructure proposals could impact power and utilities companies
President Biden has proposed extensive infrastructure and other spending initiatives, including tax incentives for clean energy and domestic manufacturing, as well as corporate and individual tax increase proposals designed to offset the costs of his spending proposals.
Tax accounting considerations of the Treasury “Green Book”
On May 28, the Department of the Treasury released the General Explanation of the Administration's Fiscal Year 2022 Revenue Proposals (“Green Book”), outlining a number of proposed amendments to the Internal Revenue Code (“IRC”), including significant changes for corporate taxpayers. Among other considerations, these proposals represent changes to existing corporate tax regimes, and have important implications from both an income and non-income tax accounting perspective.
International tax update for multinationals operating in the UK - period to 25 June 2021
Our latest update includes: 1) a recording of our PwC panel’s recent discussion of how the G7 Finance Ministers’ agreement might affect your business; and 2) an invitation to a webcast where we will explore the tax and legal considerations of hybrid working.
The ITT update will be taking its summer vacation early this year, so our next edition will be published on 26 July.
Argentina amends corporate income tax and withholding on dividend rates as from FY 2021
Argentine Law 27,630, which introduced amendments to the corporate income tax (CIT) law, entered into force on June 16, 2021. Taxpayers conducting business in Argentina should model how the amended CIT and withholding rates could impact current tax costs and operations and any planned transactions.
ATO considers certain payments for software distribution rights are royalties
The Australian Taxation Office has released a draft taxation ruling which sets out the Commissioner of Taxation’s preliminary views on the income tax treatment of receipts from the distribution and licensing of software, as distinct from “simple use” by end-users of the software. The draft ruling has a particular focus on the circumstances where receipts will be treated as royalties under arrangements involving the distribution of packaged software, digital software distribution and cloud computing arrangements including software-as-a-service (SaaS). This has the potential to be quite broad such that any business where software is fundamental to the delivery of services should also consider the draft ruling.
Real Estate news: The new double tax treaty between Belgium and France: Changing the rules of the game
The current double tax treaty (DTT) between France and Belgium dates from 1964 and has been updated throughout the years via various protocols and most recently the Multilateral Instrument (MLI). The Belgian and French government decided a couple of years ago to conclude a new DTT with the objective to achieve a BEPS compliant text. A draft version of this new DTT that would be submitted to the Flemish government for approval was briefly published on the website of the Flemish government and gave some more insights on the expected content. The entry into force is not yet known.
Webcast: How will the G7 commitment to Pillars 1 and 2 impact your business?
Register to watch this recent webcast replay for a deeper discussion and understanding of how the G7 Finance Ministers’ agreement might affect your business.
EU Parliament and Member States agree on public country-by-country reporting
Committees of the European Parliament and the Council of the EU have agreed to compromise text on a Directive on public country-by-country reporting (‘Public CbCR’). The text will amend Directive 2013/34/EU, which deals with financial reporting of certain types of undertakings (the Accounting Directive).
Korean Tax Update - June 2021
The latest edition of our Korean tax update.
International Tax News - May 2021
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) Hong Kong's tax treatments for corporate amalgamations; 2) Uruguay Corporate deductions – Micro and small enterprises; 3) US Treasury ‘Green Book’ describes Biden’s tax proposals for businesses; and 4) G7 Finance Ministers commit to Pillars One & Two, including global minimum tax rate of ‘at least’ 15%.
International tax update for multinationals operating in the UK - period to 11 June 2021
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK. Topics covered in this edition include: G7's historic commitment to global tax reform and President Biden's tax proposals for business.
Update on ATO COVID measures on Permanent Establishments
The Australian Taxation Office has amended its guidance on the rules regarding the creation of a permanent establishment in Australia in response to the COVID-19 pandemic.
Tax and Investment in the USA
This publication provides updates on recent tax and trade issues and developments of interest to global companies operating in the United States.
EU Tax News - March/April 2021
EU tax news is a bimonthly newsletter with summaries of all the relevant ECJ and national court cases and decisions, and EU policy initiatives related to EU direct tax law and state aid. The newsletter is prepared by members of PwC's EU direct tax group (EUDTG) from across Europe.
G7 Finance Ministers commit to Pillars One & Two, including global minimum tax rate of ‘at least’ 15%
The G7 Finance Ministers announced an agreement on June 5, in which the participating countries committed to new taxing rights that allow countries to reallocate some portion of profits of large multinational companies to markets (i.e., where sales arise—'Pillar One’), as well as enact a global minimum tax rate of at least 15% (‘Pillar Two’). The meeting marked an early test of whether the US position on the OECD Inclusive Framework’s ‘Taxation of the Digitalising Economy’ project would provide momentum to finding a common base for agreement.
Brexit and EU law rights
In this article, first published in Tax Journal, PwC's Peter Halford and Mark Whitehouse focus on the likely impact of Brexit on direct tax cases.
Australia - Monthly tax update: June 2021
Welcome to the June edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.
Treasury ‘Green Book’ describes Biden’s tax proposals for businesses
The US Treasury on May 28 released the much-anticipated 'General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals' ('Green Book'). The Green Book serves as a guidepost for the Administration’s proposed tax legislation, describing current law, proposed law, the Administration’s policy rationale for the proposals, and revenue projections. While the Green Book reflects the Biden Administration’s recommendations, Congress will be responsible for drafting and enacting any tax legislation.
European Commission proposal to address distortions caused by foreign subsidies
The European Commission recently proposed a new regulation to address foreign subsidies, which in certain cases are seen to be distorting the internal market.
US Tax Readiness: Key state tax legislation and trends - What you need to know to navigate change
Watch the replay from this webcast held on Tuesday 8 June 2021 which focused on key state legislation impacting corporate, passthrough entity, individual, and indirect taxes.
Draft political agreement on Public CbCR between EU Parliament and Council
On 1 June 2021, negotiators for the European Parliament and the Portuguese EU Council Presidency, on behalf of the Council of the EU (EU-27 Member States), provisionally reached a compromise deal on the EU’s draft Directive on public country-by-country reporting (‘Public CbCR’) for big multinational groups, according to a Council of the EU’s press release.
Aozora - FTT concludes LoB clause is not an ‘express provision’ denying credit relief
The First-tier Tax Tribunal (FTT) in Aozora GMAC Investments (Aozora) v HMRC has allowed the taxpayer’s appeal, ruling that the Limitation of Benefits clause in the US-UK double tax treaty is not an ‘express provision’ that relief by way of credit is not to be given under the treaty and therefore that it does not prohibit Aozora from claiming unilateral credit relief in the UK. Taxpayers considering whether they are entitled to credit relief in the UK for tax that is not relieved by an applicable double tax treaty should consider the potential implications of this ruling for their own arrangements and seek advice where necessary.
Digital tax megabyte for May 2021
This edition includes announcements on India's SEP thresholds, Australia's proposed sharing economy reporting regime and revised USTR hearings on DSTs. The progress of US domestic proposals may impact on Pillar One and Two discussions and ATAF has put forward its revised proposals. The EC has released a Communication including its intentions on digital measures. Kenya's 2021 Finance Bill has proposed some changes to the definition of a PE, the DST and VAT rules while the IMF has released a paper on the challenges faced by countries in setting VAT rules.
International tax update for multinationals operating in the UK - period to 28 May 2021
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK. Highlights in this edition are: 1) FTT concludes LoB clause is not an ‘express provision’ denying credit relief; 2) EU General Court delivers two State aid judgments in Amazon and Engie; 3) The rise of hybrid working: How to transform your organisation for our changed world; 4) The post-pandemic world of work: can you let employees work from anywhere? and 5) Our April edition of International Tax News.
US Treasury report provides details on President Biden’s tax proposals
The US Treasury has released a 114-page “Green Book” general explanation of tax proposals included in President Joe Biden’s fiscal year (FY) 2022 budget submission to Congress, also released the same day. The Green Book provides new details on proposals to increase corporate and individual taxes to help offset the $4.1 trillion combined cost of President Biden’s previously proposed American Jobs Plan and American Families Plan.
US webcast: Treasury's Green Book is back, adding detail to President Biden's tax proposals
Watch the replay of this webcast held on Thursday 3 June 2021 where our panel walked through Treasury's 'Green Book,' which adds details to President Biden's FY22 Budget proposals, and informs Congress.
US income tax treaties at the start of the Biden Administration
At a public forum in April 2021, a Treasury official stated the United States desires to amend existing income tax treaties with Switzerland and Israel, and that the United States has opened tax treaty negotiations with Colombia, has completed tax treaty negotiations with Norway and Romania, and is engaged in ongoing tax treaty discussions with Croatia.
This treaty activity contrasts with recent US tax treaty history, where, in 2019, following a lengthy hiatus in the tax treaty approval process, four US tax treaty protocols, which had been negotiated and signed years before, entered into force.
International Tax News - April 2021
Among the topics featured in this month's edition are: 1) Canada’s 2021 budget addresses mandatory disclosure, DST, interest limitation, and hybrid mismatches; 2) Australian Tax Office proposes hybrid rules guidance; 3) France updates list of non-cooperative states and territories; and 4) New CIT preferential policies for small and thin-profit enterprises (STEs) and super R&D deduction.
2021-22 Victorian State Budget
The 2021-22 Victorian State Budget was delivered on 20 May 2021 by Treasurer Tim Pallas. The key feature of the 2021-22 Budget was the recovery from the economic impact of COVID-19. However, the resulting cost is manifested in another key feature of the Budget, tax increases and new taxes and levies.
Korean Tax Update - May 2021
The latest edition of our Korean tax update.
US Tax Readiness webcast: Preparing for Deals in a Changing Environment
In this webcast held on Wednesday 26 May 2021, PwC professionals from our Tax and Deals practices had a timely discussion of the many factors impacting the current deals environment including the prevalence of ESG, the use of SPACs, and anticipated tax changes.
Tax Policy Bulletin - EC releases ‘Communication on Business Taxation for the 21st Century’
The European Commission released a “Communication on Business Taxation for the 21st Century” on 18 May 2021, setting a tax agenda for the next two years with five key actions. The aim is to align the EU tax framework with the new realities of the globalised and digitalised economy post-Covid, and to ensure that Member States’ tax systems are fit for purpose.
US Treasury issues rule on state tax reductions and federal aid
The US Treasury Department has published an interim final rule on a law prohibiting states from using certain federal aid to offset tax reductions.
Australia - Draft ATO guidance on cross-border intangible arrangements
The Australian Taxation Office has released a draft Practical Compliance Guideline on cross-border arrangements connected with intangibles. The draft PCG covers a broad range of issues including intangible transfers, the development, enhancement, maintenance, protection and exploitation (DEMPE) functions, and the characterisation of intangible payments.
European Commission publishes Communication on Business Taxation for 21st Century
On 18 May 2021, the European Commission published a Communication on EU Business Taxation for the 21st Century in which it sets out its vision and measures for both the short and longer term.
Irish Revenue Transfer Pricing Tax and Duty Manual - what does it mean for Irish taxpayers?
Irish Revenue recently released Part 35A-01-01, Transfer Pricing Tax and Duty Manual (Tax and Duty Manual). The Manual seeks to give taxpayers additional guidance on the new rules introduced by Finance Bill 2019.
Australian temporary loss carry-back rules - What you need to know
The temporary loss carry-back rules were a welcome announcement by the Government in the Federal Budget handed down on 6 October 2020. These rules are designed to provide temporary cashflow support to companies that were previously in a tax paying position but who now find themselves in a tax loss position due to the COVID-19 pandemic and/or through obtaining faster deductions for depreciation under the new instant asset write-off measures. The regime, as originally announced, was to be in place for three years. In the 2021-22 Federal Budget, the Government announced it would be extended for an additional year.
General Court of EU confirms European Commission’s final decision in the GDF Suez (now Engie) State aid case
The General Court of the European Union on 12 May 2021 confirmed the European Commission's final decision in the GDF Suez (now Engie) State aid cases. Read more in this PwC EU Direct Tax Group newsalert.
General Court annuls European Commission’s decision declaring the aid incompatible with internal market on Amazon
In its decision of 12 May 2021, the General Court of the European Union annulled the European Commission's final decision in the Amazon State aid case. Read more in our PwC EU Direct Tax Group newsalert.
International tax update for multinationals operating in the UK - period to 14 May 2021
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK.
Australia: 2021-22 Federal Budget insights
Treasurer Josh Frydenberg handed down the 2021-22 Australian Federal Budget on Tuesday 11 May 2021. A key focus of this year’s Budget is to attract and retain the ‘best and brightest’ talent in Australia, encourage workforce participation, reduce compliance costs, build confidence and certainty in the tax system. It is no surprise that tax measures play a key role in delivering this agenda. A number of measures announced are relevant to global employers and their mobile employees.
US webcast: Mexico's outsourcing services reform significantly impacts multinationals
Join us for a webcast on Thursday 27 May 2021 at 7pm where we will discuss the legislation recently published in Mexico that will significantly impact multinational entities with operations or investments in Mexico.
Cyprus addresses DAC6, prevention of tax abuse, and treaties with Egypt and Germany
The Cyprus Parliament on March 18 approved the draft Bill amending the Law on Administrative Cooperation in the Field of Taxation, implementing DAC6. In addition, the Cypriot Ministry of Finance submitted two bills to Parliament to amend tax legislation to strengthen Cyprus’ tax framework for preventing tax abuse, tax evasion, and tax avoidance. The new tax treaty between Cyprus and Egypt, which was signed on October 8, 2019, and which entered into force on July 31, 2020, is effective as of January 1, 2021.
Kansas enacts significant corporate income tax changes
Pursuant to a legislative override of the governor’s veto, S.B. 50 which was recently enacted, provides the following changes applicable for tax years beginning after December 31, 2020: 1) 100% subtraction modification for GILTI and 163(j) disallowed interest; 2) Decoupling from IRC Section 118 capital contribution changes enacted by the 2017 tax reform act (the 2017 Act); and 3) Modifying business meal expense deductions. Additionally, for net operating losses incurred in tax years beginning after December 31, 2017, Kansas replaces its 10-year NOL carryforward with an unlimited carryforward. Finally, Kansas extends the filing deadline for 2020 corporate income tax returns to be one month following the federal deadline.
International Tax News - March 2021
International Tax News is designed to help multinational organisations keep up with the constant flow of tax developments.
Florida enacts remote seller and marketplace provider collection requirements
Florida has enacted legislation requiring remote sellers and marketplace providers to collect and remit sales and use taxes, effective July 1, 2021.
Kansas eases incentive requirements and allows credit transfer
Senate Bill 65, enacted on 15 April 2021, eliminates certain requirements from the High Performance Incentive Program (HPIP). Effective upon enactment, taxpayers no longer have to qualify for the Kansas Industrial Training (KIT) or Kansas Industrial Retraining (KIR) workforce training tax credits, or make required investments in employee training, to qualify for the HPIP. For projects placed in service on and after 1 January, 2021, a taxpayer may transfer up to 50% of HPIP tax credits to another taxpayer.
Digital tax megabyte for April 2021
A collection of the brief insights throughout March 2021 of the type provided on an ad hoc basis in our Latest digital tax byte update.
International tax update for multinationals operating in the UK - period to 30 April 2021
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK. This issue includes:1) an article where our specialists reflect on the host of international tax issues and complexities associated with international holding structures as a consequence of the continually changing external landscape.
UN tax committee adopts Article 12B for model treaty rules on digital services
The United Nations, through its Committee of Experts on International Cooperation in Tax Matters, has approved recommended language for bilateral treaty rules to address taxing rights around income arising from Automated Digital Services (ADS). The new Article 12B and associated Commentary will form part of the 2021 version of the UN Model Tax Convention (MTC).
Digital service taxes: Are they here to stay?
Digital Service Taxes, or DSTs, have been permeating the trade environment since 2018, but COVID-19 and the OECD’s digitalization of the economy project, commonly referred to as BEPS 2.0, have accelerated the focus on DSTs. The stated aim of DSTs is to ensure that “market” countries get increased taxing rights over the profits of tech-based multinational companies that sell into their local market, and collect data from and target advertisements at local audiences, regardless of their physical presence.
Australia - Monthly tax update: May 2021
Welcome to the May edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.
Canada’s 2021 budget addresses mandatory disclosure, DST, interest limitation, and hybrid mismatches
The Canadian Government’s budget was presented on 19 April 2021. The budget includes several international tax proposals but does not contain any proposed changes to the corporate tax rates in Canada.
Canada 2021 Federal Budget analysis
The Deputy Prime Minister and Minister of Finance, Chrystia Freeland, presented Canada's budget on 19 April 2021. This Tax Insights discusses the tax initiatives announced.
Australian Taxation Office proposes hybrid rules guidance
Australia’s hybrid mismatch rules include ‘imported mismatch’ rules, which may apply more broadly than OECD BEPS Action 2-compliant hybrid rules implemented in other countries. On April 21, the Australian Taxation Office (ATO) released a draft practical compliance guideline, which provides guidance on how taxpayers practically should apply the imported mismatch rule and what documentation is required.
Texas proposes significant changes to research and development tax treatment
The Comptroller has submitted significant proposed amendments to Texas Admin Code Sec. 3.599, concerning the research and development activities franchise tax credit. The publication triggers a 30-day period of public commentary. The earliest date of adoption is May 16, 2021.
International holding structures: are they structurally sound?
In this article first published in Tax Journal, our specialists reflect on the host of international tax issues and complexities associated with international holding structures as a consequence of the continually changing external landscape.
Mexico approves significant changes for subcontracted services
The Mexican Senate approved legislation on April 20 that will modify the tax and labor law treatment of subcontracted services in Mexico. These law reforms may result in significant financial impacts to Mexican investments, as well as human resource considerations.
New Zealand parliament passes omnibus tax bill
The Taxation (Annual Rates for 2020-21, Feasibility Expenditure and Remedial Matters) Act has been enacted and is now in force. In this PwC news alert, we consider the amendments arising from the Finance and Expenditure Select Committee’s recommendations following the submissions process, and we also discuss new measures that were introduced by way of a supplementary order paper (SOP).
US Tax Readiness webcast: The intersection of ESG and Tax
Watch the replay from this webcast held on Wednesday, 5 May 2021 to learn more about environmental, social and governance (ESG) and how tax leaders can engage with the C-suite to align tax with ESG transformation.
Korean Tax Update - April 2021
This edition includes: 1) MOEF announces tax expenditure plan for 2021; 2) MOEF announces measures to combat real estate speculation; 3) NTS launches Task force to establish income data management system; 4) Notes to corporate local income tax return filing by April 30; and 5) Rulings update.
IRS defines ‘restaurant’ for food and beverage deduction
Under Section 274(n), a taxpayer generally may deduct only 50% of the taxpayer’s otherwise allowable business expenses for food and beverages. The Consolidated Appropriations Act, 2021, removed this limitation for business expenses paid or incurred after 2020 and before 2023 for food or beverages provided by a restaurant. The IRS has released Notice 2021-25, which provides guidance on what is a ‘restaurant’ for this purpose.
PwC's submission to the EU Digital Levy consultation
PwC has welcomed the opportunity to share its views on the consultation document on the Digital levy which aims to provide COVID-19 recovery resources for the European Union.
German real estate transfer tax (RETT) reform back on track
In October 2019, the German coalition government issued a joint press release announcing that the proposed reforms to the German Real Estate Transfer Tax Act (RETTA) would be delayed until the first half of 2020. At that time, the parties failed to reach a solution in the first half of 2020 and progress had since halted. Efforts have now started to adopt the original draft with few amendments despite the requests for changes.
International tax update for multinationals operating in the UK - period to 2 April 2021
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK. This edition includes: 1) our “Doing business and investing in the UK'' guide, providing insight into the key aspects of business expansion, from establishing an entity to navigating employment legislation; 2) latest US tax developments.
Digital tax megabyte for March 2021
A collection of the brief insights throughout March 2021 of the type provided on an ad hoc basis in our Latest digital tax byte update.
USTR proposes potential tariffs pending six digital tax investigations and closes four others
The United States Trade Representative (USTR) recently published updates to digital service tax (DST) investigations regarding Austria, India, Italy, Spain, Turkey, the UK, Brazil, the Czech Republic, the EU, and Indonesia. The USTR has terminated its investigations regarding Brazil, the Czech Republic, the EU, and Indonesia because those jurisdictions either have not adopted or not implemented a DST during the period of investigation. For the other countries, the investigatory process is continuing, and the USTR has proposed a list of goods for potential tariffs.
US Senate Finance Democrats, Treasury Secretary Yellen call for international tax policy changes
Building off President Biden’s recent proposals for infrastructure spending to be paid for with corporate tax increases, Senate Finance Committee Chairman Ron Wyden (D-OR) joined with Finance members Sherrod Brown (D-OH) and Mark Warner (D-VA) in releasing a nine-page paper outlining a framework for overhauling US international tax policy. In a separate event, Treasury Secretary Janet Yellen highlighted the tax proposals announced last week by President Biden that call for increasing the US minimum rate on global income and increasing the US corporate tax rate to 28%.
Biden infrastructure plan includes numerous ESG proposals
President Joe Biden on March 31 announced a $2 trillion "American Jobs Plan" focused on infrastructure and other spending initiatives, including tax incentives for clean energy and domestic manufacturing. He also proposed a 'Made in America Tax Plan' containing corporate tax increase proposals designed to offset the costs of the American Jobs Plan infrastructure spending. In advance of the President’s remarks, the White House released an outline of specific infrastructure proposals and corporate tax increase offsets. This PwC Insight focuses on the tax-related aspects of President Biden’s plan related to environmental, social, and governance (ESG) issues.
Netherlands submits draft bill introducing conditional source tax on dividend payments
On March 25, 2021, the Bill introducing a conditional withholding tax on dividends was submitted to the Lower House of Parliament. The Conditional Withholding Tax on Dividends Act supplements the 2021 Withholding Tax Act and aims to prevent the untaxed flow of dividends from the Netherlands to low-tax jurisdictions and in abuse situations.
EU Direct Tax Group Newsletter - January/February 2021
Welcome to our latest EUDTG bimonthly newsletter, featuring summaries of all the relevant ECJ and national court cases and decisions, and EU policy initiatives related to EU direct tax law and state aid.
Dutch consultation on adaptation of tax qualification rules for legal entities
On 29 March 2021 the Dutch Ministry of Finance published a consultation document which includes proposed amendments to the Dutch qualification rules for Dutch and foreign entities. The consultation period ends on 26 April 2021.
White House lists corporate tax offsets for Biden infrastructure plan
President Joe Biden held an event in Pittsburgh on 31 March 2021 to announce a $2 trillion "American Jobs Plan'' focused on infrastructure and other spending initiatives, with part of the cost of his proposals to be offset by corporate tax increase proposals. In advance of the President’s remarks, the White House released an outline of specific infrastructure proposals and corporate tax increase offsets.
Australia - Monthly tax update: April 2021
Welcome to the April edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.
Cyprus Parliament approves legislation implementing DAC6
The Cyprus Parliament recently approved the draft Bill amending the Law on Administrative Cooperation in the Field of Taxation, implementing DAC6.
US Tax Readiness: How to comply with the new final stewardship regulations
Have you updated your approach to allocating and apportioning stewardship expense? Join this webcast on Wednesday, 7 April at 7pm and hear from our international tax and transfer pricing specialists.
Key trade and policy considerations for US inbound companies
Global trade will play a key role in economic recovery efforts in the United States and around the world. Business supply chains continue to be affected by the implementation of the updated free trade agreements in Canada and Mexico. The Biden administration is expected to continue negotiating separate free trade agreements with the European Union and the United Kingdom, as well as pursuing new trade agreements with other nations.
India - Amendments to the Finance Bill, 2021 as passed by both houses of the parliament
The Finance Bill 2021 was passed by the Lok Sabha on 23 March 2021 with amendments to the original Bill that was tabled before the Lok Sabha on 1 February 2021 (Original Bill). Subsequently, the Bill was affirmed by the Rajya Sabha on 24 March 2021, without any further amendments. This Tax Insight explains the key amendments.
International Tax News - February 2021
International Tax News is designed to help multinational organisations keep up with the constant flow of tax developments.
Spain enacts ATAD 2 anti-hybrid rules
The Spanish government on March 9 amended the Corporate Income Tax law and the Non-Resident Income Tax law to address hybrid mismatches. The stated purpose of these amendments is to enact into Spanish domestic law the anti-hybrid rules included in EU Directive 2016/1164, dated July 12, 2016 (‘ATAD 1), as amended by EU Directive 2017/952, dated May 29, 2017 (ATAD 2).
Germany passes draft ATAD bill
The German government on March 24 passed a draft bill (Draft) aimed at implementing the Anti-Tax Avoidance Directive (ATAD). The Draft is expected to become law before the September elections.
US international tax policy focus of Senate Finance Committee hearing
The Senate Finance Committee on March 25 2021 held a hearing on how US international tax policy impacts American workers, jobs, and investment.
European Union Adopts Mandatory Exchange of Information for Digital Platform Operators
The Council of the European Union has adopted an EU Directive expanding the scope of automatic exchange of information to digital platform operators and amending existing provisions on administrative cooperation in the field of taxation (“DAC7”). DAC7 introduces the 6th amendment to the Directive 2011/16/EU on administrative cooperation in the field of taxation (“DAC”).
EU expands reporting obligations under DAC7 and DAC8 for the digital economy and crypto assets
While EU Member States, advisors and taxpayers are still navigating the DAC6 landscape, the European Union is moving quickly to expand reporting obligations in the digital world. On March 10, the European Parliament (EP) adopted the DAC7 text featuring the new digital platform reporting rules proposed last year by the EU Commission. On March 22, the EU Council adopted the new rules, applicable January 1, 2023. Separately on March 10, the Commission launched a public consultation on DAC8, which would impose reporting obligations for e-money and crypto assets.
US Federal COVID relief to states restricts use for ‘net tax’ reductions
The American Rescue Plan Act enacted on March 11 provides over $195 billion in direct aid to states but includes a provision prohibiting the use of those funds to “either directly or indirectly offset a reduction in the net tax revenue” of a receiving state. Businesses should monitor tax measures potentially impacted by this provision and the status of Treasury guidance on the issue.
International tax update for multinationals operating in the UK - period to 19 March 2021
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK. This edition includes measures announced in the Finance Bill.
Hong Kong proposes relaxation of deduction of foreign taxes for profits tax purpose
The Inland Revenue (Amendment) (Miscellaneous Provisions) Bill 2021 was recently gazetted. The Bill, among other things, seeks to amend the Inland Revenue Ordinance to enhance the deduction of foreign taxes for profits tax purposes as a means for relieving double taxation in Hong Kong. Upon enactment of the Bill, the revised rules on foreign tax deduction will take effect from the year of assessment 2021/22.
Cyprus - Anti-tax abuse proposals include new withholding taxes and corporate tax residence test
The Cypriot Ministry of Finance has submitted two tax bills to Parliament proposing anti-tax abuse measures in line with recent EU Country-Specific Recommendations for Cyprus and the EU guidelines for defensive tax measures to be adopted by EU Member States towards EU blacklisted jurisdictions.
CJEU rules that the Hungarian advertisement tax and the Polish tax on the retail sector do not infringe EU State aid rules
The Court of Justice of the European Union has issued its judgments in two cases relating to the Hungarian Advertisement tax and to the Polish retail tax ruling that they do not infringe EU State aid rules.
Korean Tax Update - March 2021
This edition includes: 1) The National Assembly approved Bill to amend the Special Tax Treatment Control Law; 2) Amended Enforcement Rules of Tax Laws have been proclaimed; 3) NTS expands the ‘Advance Verification for R&D Tax Credit’; and 4) Rulings update.
Implementation of Interest Limitation Rules in Ireland
Interest limitation rules ("ILR"), as required by the EU Anti Tax Avoidance Directive, are set to be transposed into Irish law later this year and take effect from 1 January 2022. The existing Irish interest deductibility rules will remain in effect after 1 January 2022 and taxpayers will need to compute tax liabilities by reference to the new ILR and the old deductibility rules. The Department of Finance acknowledges the complexity that will ensue and has sought stakeholder engagement by way of a Feedback Statement process. The first part of this process closed for public comments on 8 March 2021.
Maryland interprets new tax on digital products; provides filing, payment extension
The Maryland Comptroller has issued guidance on the expansion of the state’s sales and use tax to a digital product or code, specifying which items are considered taxable digital products if delivered electronically, explaining exclusions and exemptions from tax, and applying economic nexus and marketplace facilitator rules to digital products. The tax must be collected beginning March 14, 2021. The Comptroller has provided an extension to July 15, 2021 to file and pay tax, and relief from interest and penalties if the tax is paid by that date. The requirement to collect the tax from customers has not been delayed.
Global Digital Tax Online - our new online tool
In a time when information is key and compliance is vital, GlobalDigitalTaxOnline (GDTO) is an essential tool to help navigate the complex world of tax and the reporting of various digital/electronic services.
Finance Bill 2021 - changes to the anti-hybrid rules
Finance Bill 2021 has now been published and it includes several legislative updates to the anti-hybrid rules following HMRCs recent consultation. This article provides a high level summary of these updates.
EU Directive proposals would widen public country-by-country reporting
The EU Member States’ negotiating mandate on public country-by-country reporting (public CbCR) was established under the Portuguese Presidency of the Council on the basis of its compromise draft following the informal Council video conference on 25 February 2021. The mandate also was approved by Member State permanent representatives in the ‘Coreper’ meeting on 3 March 2021.
DAC6 information exchange between EU Member States may begin on April 30
Most of the EU Member States that deferred the DAC6 reporting deadlines due to the pandemic postponed them to February 28, 2021. Thus, the extended deadline for reporting cross-border arrangements satisfying at least one of the DAC6 hallmarks and whose first step was implemented on or after June 25, 2018 has passed.
New Zealand Tax Tips: March 2021
This edition of Tax Tips provides a recap of the New Zealand Government's COVID-19 support measures and also discusses the NZ Inland Revenue's new exposure draft on the administration of the imported hybrid mismatch rule, which sets out the steps Inland Revenue expects taxpayers to have undertaken before claiming deductions for cross-border related party payments.
House clears $1.9 trillion relief legislation for President Biden’s signature
The House on March 10 voted 220 to 211 to approve the Senate-passed version of H.R. 1319, the American Rescue Plan Act of 2021. House passage of the $1.9 trillion legislative package clears the measure to go to the White House and be signed into law by President Biden.
Inbounds should engage now on US tax and trade policy
The Biden Administration and Congress are focused on responding to the COVID-19 pandemic and its economic impact, while also preparing to consider significant tax law changes impacting business and individuals. Important changes in trade policy also are likely. Foreign companies and investors will need to engage early with policymakers to educate them about the vital role they play in the US economy and about their unique concerns.
The US FDI landscape in 2021
Following the challenging economic climate of 2020 and the change of presidential administrations in January, 2021 is shaping up as a crucial year for foreign direct investment (FDI) in the United States. There are several key trends and points worth noting.
US Senate passes COVID relief legislation with changes to House-approved bill
The Senate on March 6 passed by a vote of 50 to 49 a Senate substitute amendment to the COVID relief legislation that made certain changes to the House-passed budget reconciliation bill (H.R. 1319, the American Rescue Plan Act of 2021). The final vote came Saturday afternoon after an all-night session in which a number of additional amendments were considered.
International tax update for multinationals operating in the UK - period to 5 March 2021
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK. This edition includes our comments on the Chancellor's recent Budget.
Switzerland publishes updated safe harbour interest rates for 2021
The Swiss Federal Tax Administration recently published two circulars outlining the safe harbour interest rates applicable to shareholder and intercompany loans, denominated in Swiss Francs and foreign currencies, applicable for 2021.
Wisconsin appellate court rules Department cannot challenge DRD from non-corporate entities in prior years
The Wisconsin Court of Appeals on February 25 upheld a lower court decision concluding that Wisconsin’s dividend received deduction (DRD) - which requires that a distribution be received with respect to ‘common stock’ - applies to a distribution made from a foreign LLP that elected to be taxed as a corporation for federal income tax purposes.
Budget 2021 - International tax and treasury aspects for multinational companies
The Chancellor delivered his 2021 Budget on 3 March 2021. Set out in this article is a summary of the key announcements from an international corporate tax and treasury perspective for multinational companies.
CJEU rules the ordinary tax credit method provided for by DTTs compatible with the free movement of capital
On 24 April 2019, the French Supreme Administrative Court asked for a preliminary ruling on the Société Générale case (C-403/19) to the Court of Justice of the European Union (CJEU). The CJEU delivered its Judgment on 25 February 2021 without any Advocate General’s opinion.
EU members debate proposal on public country-by-country reporting
During an informal video conference on 25 February 2021, a majority of EU Member States (through their Ministers of Internal Market and Industry) expressed support for the compromise text of a proposed Directive on public country-by-country reporting (pCbCR). The disclosure of certain tax information by undertakings and branches is now supported by 15 Member States, including the current Presidency (Portugal) as a non-tax matter that requires a ‘qualified majority’ of votes to proceed.
US Tax Readiness: International tax planning post-election
Register to join us on Wednesday, 17 March 2021 at 6pm to discuss international tax planning in a post-election environment.
Australia - Monthly tax update: March 2021
Welcome to the March edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.
US State tax policy changes on the horizon, but is 2021 the year?
US State and local budget processes were significantly disrupted by the impact of COVID-19. States and localities now confront difficult tax and budget choices in the current and upcoming legislative sessions.
Pennsylvania new voluntary compliance program for businesses with in-state inventory
The Pennsylvania Department of Revenue has announced a 90-day voluntary compliance program to run until May 8, 2021, which allows any business that has inventory or stores property in the state but that is not registered to collect and pay Pennsylvania taxes to become compliant. The program offers a limited look-back period and penalty relief.
Webinar: China's Foreign Investments Security Review Measures - How will they impact your business?
China recently 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. Watch this recent webcast where the key issues that foreign investors may face after the Measures are enacted, and the resulting business impacts were discussed.
German IP nexus rules: Ministry of Finance circular simplifies WHT & capital gains tax procedures
The German Ministry of Finance has issued a circular that provides updated filing and withholding procedures for royalties attributable to IP registered in a German book or register. By taking advantage of this new simplified process within the prescribed time limits, taxpayers have an opportunity to avoid penalties that may otherwise be imposed.
German draft bill for a “Tax Haven Defence Act” published
The German Federal Ministry of Finance recently published a draft bill for a so-called "Tax Haven Defence Act", which provides for the implementation of defence measures in regard to business relationships or shareholdings with reference to certain non-cooperative states.
International tax update for multinationals operating in the UK - period to 19 February 2021
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK. Topics covered include Budget 2021 and details of our live session taking place on 4 March where we will explore the latest tax issues and how they will impact businesses.
US SALT trends, Opportunities for US inbound companies in 2021
We expect several state and local tax trends to impact US inbound companies in 2021. These trends include: 1) President Biden’s tax proposals and continued conformity; 2) an increase in state and local taxation, specifically at the local level; 3) enhanced state focus on transfer pricing; 4) greater opportunity for tax credits and incentives changes in consumption taxes; and 5) telecommuting nexus. Inbound companies should evaluate their US state tax exposure risk and determine whether the anticipated changes in 2021 could have a material effect on such exposure.
India budget 2021—Impact on foreign investors and multinationals
The Indian Finance Minister recently presented the Union Budget 2021 against the backdrop of a challenging economic environment due to COVID-19. In view of India’s tax reform measures to date, Budget 2021 maintains the same overall tax structure, but contains several measures that aim to attain tax certainty, facilitate tax administration, and reduce tax disputes. Multinational entities should analyze the impact of key Budget proposals on their operations, including a helpful provision to create a new board for advance rulings.
Korean Tax Update - February 2021
The latest edition of our Korean tax update.
International tax update for multinationals operating in the UK - period to 5 February 2021
Welcome to our latest update on recent developments in international and treasury tax of interest to multinationals operating in the UK. Topics include taxation of the digital economy and Germany's withholding tax proposals.
International tax update for multinationals operating in the UK - period 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. Topics include: 1) revised OECD guidance on tax treaty interpretation during the COVID-19 pandemic; 2) US election analysis - what it means for US and global tax policy; and 3) Global business operating models.
International tax update for multinationals operating in the UK - period to 8 January 2021
Welcome to our first edition for 2021 of recent developments in international and treasury tax of interest to multinationals operating in the UK.
International tax update for multinationals operating in the UK - period to 11 December 2020
Welcome to our last update for 2020 on recent developments in international and treasury tax of interest to multinationals operating in the UK.
Visit our US Tax Reform hub
US Tax Reform could give rise to sweeping, complex changes for companies with a US footprint. To help you stay informed, we'll be updating this hub with all the latest comments and analysis as the situation develops.