International Tax and Treasury

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.

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.

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 is designed to help multinational organisations keep up with the constant flow of tax developments.

Florida has enacted legislation requiring remote sellers and marketplace providers to collect and remit sales and use taxes, effective July 1, 2021.

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.

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.

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.

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, 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.

Please join PwC professionals from our Tax and Deals practices on Thursday, 20 May 2021 at 7pm for 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.

Welcome to the May edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.

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.

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.

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.

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.

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.

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.

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).

Highlights of this edition include: 1) Webcast - Using tax incentives to generate value from investments; 2) Tax Readiness webcast: Are digital taxes here to stay? 3) US Senate Finance Democrats and Treasury Secretary Yellen call for international tax policy changes; and 4) The latest podcast in our Tap into Tax series - Catching the international tax policy train.

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.

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.

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 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.

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.

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.

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.

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.

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%.

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.

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.

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.

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.

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.

Welcome to the April edition of Australia's Monthly Tax Update, keeping you up to date on the latest Australian and international tax developments.

The Cyprus Parliament recently approved the draft Bill amending the Law on Administrative Cooperation in the Field of Taxation, implementing DAC6.

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.

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.

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 is designed to help multinational organisations keep up with the constant flow of tax developments.

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).

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.

The Senate Finance Committee on March 25 2021 held a hearing on how US international tax policy impacts American workers, jobs, and investment.

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”).

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.

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.

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.

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.

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.

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.

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.

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.

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.

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 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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

Register to join us on Wednesday, 17 March 2021 at 6pm to discuss international tax planning in a post-election environment.

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 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.

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.

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.

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.

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.

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.

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.

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.

The latest edition of our Korean tax update.

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.

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.

Welcome to our first edition for 2021 of recent developments in international and treasury tax of interest to multinationals operating in the UK.

Welcome to our last update for 2020 on recent developments in international and treasury tax of interest to multinationals operating in the UK.

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.