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US Tax
To help you stay informed, this hub contains the latest comments and analysis for companies with a US footprint. To request access to all the Insights and Resources across the PwC Suite, click the button at the top of the pages.
Treasury and the IRS on 24 April 2024, released final regulations (TD 9992) regarding the definition of domestically controlled qualified investment entities (DC QIE) under Section 897. The final regulations provide much needed transition rules and primarily affect foreign persons that own stock in a QIE that would be a United States real property interest (USRPI) if the QIE were not domestically controlled.
The IRS Advance Pricing and Mutual Agreement Program (APMA) on March 26 issued its 25th Annual Statutory Report Concerning Advance Pricing Agreements (APAs). The report shows there was a significant increase in the number of APAs executed in 2023, with the number more than doubling from 77 in 2022 to 156 in 2023, making 2023 a record year in the history of the APA program in terms of the number of executed APAs. For APAs completed in 2023, there was a slight improvement in the time to finalize APAs, decreasing slightly in 2023 to three and a half years, and down from the all-time recent high of approximately 43 months in 2022. The increase in executed APAs, coupled with the slight decrease in processing times, suggests continued improvement in the efficiency of the APA process four years after the COVID-19 pandemic.
On 11 March, President Biden sent Congress a fiscal year (FY) 2025 budget that proposes to increase taxes by nearly $5 trillion for corporations and for individuals with incomes above $400,000. Many of the president’s tax proposals -- including a proposal to increase the corporate tax rate to 28% and impose a 25% minimum tax on certain high-income individuals – were included in President Biden’s previous budgets. New tax proposals in the FY 2025 budget include measures to increase the recently enacted corporate alternative minimum tax rate from 15% to 21% and to deny business deductions for employee compensation above $1 million.
In this webcast replay from 17 January, our panel of PwC policy specialists review our 2024 Tax Policy Outlook and outline the upcoming tax policy decisions to be made and delve into the significant hurdles faced by business leaders. This includes strategies on effectively engaging with policymakers and the public to garner support for tax policies that foster future economic growth, business investments, and job creation.
Join our panelists on Tuesday 25 April at 7pm as they discuss the evolving compliance challenges produced by these two events and how companies are implementing leading practices to reduce costs, minimize risk, and produce cash tax savings.
President Biden on 9 March sent Congress an FY 2024 budget that proposes to increase taxes for corporations and for individuals with incomes above $400,000.
In a State of the Union address to a joint session of Congress on 7 February, President Biden called on Congress to support his economic policy agenda that includes reforming the tax code to “reward work and not just wealth.” The President said that he is proposing to increase from 1% to 4% the excise tax on corporate stock repurchases that was enacted in 2022 as part of the Inflation Reduction Act (IRA). He also called on Congress to enact a “billionaire” minimum tax and other corporate and individual tax proposals. The President’s tax proposals will be submitted to Congress as part of his FY 2024 budget. The President’s budget and a Treasury Department “Green Book” general explanation of revenue proposals will be released on 9 March, according to White House officials.
This Insights provides a discussion of and PwC observations on the interim guidance addressing application of the new excise tax on repurchase of corporate stock released by Treasury on 27 December.
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.
President Biden signed into law the Inflation Reduction Act (the Act) on 16 August. One key-revenue raising provision is a 15% minimum tax based on adjusted financial statement income (book minimum tax, or BMT). The BMT is effective for tax years beginning after 31 December 2022.
How will the tax provisions in the Inflation Reduction Act impact organizations? Watch the replay from this webcast where our panel of specialists discuss the bill's tax incentives, 15% book minimum tax (BMT), and 1% stock buyback excise tax.
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.
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.
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.
The Senate on August 7 voted 51 to 50 along party lines to pass the “Inflation Reduction Act'' budget reconciliation bill (the bill). The tie-breaking vote in the evenly divided Senate was provided by Vice President Kamala Harris. The Senate action clears the way for the House to return from its August recess on Friday, August 12 to consider the bill. President Biden and Democratic leaders hope to see the narrowly divided House approve the bill without change so it can be signed into law before the end of August.
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.
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.
Senate Majority Leader Chuck Schumer and Senator Joe Manchin have announced an agreement on a budget reconciliation bill (the Inflation Reduction Act of 2022). According to fact sheets distributed by Senate Democrats, the legislation includes revenue and spending offsets of $739 billion over 10 years by increasing taxes paid by businesses and individuals and by producing savings from changes in federal prescription drug pricing policies.
The US Treasury Department took the rare step on 8 July of providing notice to Hungary that it is terminating the US-Hungary income tax treaty, which has been in operation since 1979. According to an article in the Wall Street Journal, Treasury explained its action based on long-standing concerns with Hungary’s tax system and the treaty itself, and a lack of satisfactory action by Hungary to remedy these concerns in coordination with other EU member countries that are seeking to implement the OECD Pillar Two global minimum tax proposal.
Watch this recent webcast where our panel 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.
Watch this webcast recording from 22 June 2022, where our Tax Accounting Services (TAS) specialists take a deep dive into relevant tax accounting matters and recent tax developments.
In response to a perceived potential abuse of the ‘anti-clawback’ regulations released in 2019, the IRS recently published Proposed Regulation sec. 20.2010-1(c)(3). This proposed regulation would impose some limits on the anti-clawback regulations issued in 2019. The regulation, when finalised, is proposed to apply to estates of descendants dying on or after 27 April 2022. Comments on the proposed regulations are due by 26 July 2022.
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 where our panel of specialists discuss practical steps for adapting to change and preparing for the future.
Corporate blockers may provide tax-exempt entities an opportunity to enhance certain types of investment returns. With changes in US tax law brought about by the 2017 tax reform legislation, university endowments, foundations, pension trusts, and other tax-exempt entities should analyze whether the use of an alternative investment vehicle (“AIV” or “corporate blocker”) could play an appropriate part in their overall investment strategy.
Watch the replay from 31 May where our specialists discuss the importance of ESG positioning in corporate strategy, buy-side due diligence, sell-side divestiture planning, and credits & incentives.
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.
Watch the replay from 4 May where our specialists discuss the controversy challenges companies are facing and ways they can minimize risk to their business operations.
The past few months have seen several important developments affecting US global trade. Taxpayers that could be affected should analyse the potential impact.
The Treasury Department on 28 March 2022 published its “General Explanations of the Administration’s Fiscal Year 2023 Revenue Proposals” (traditionally known as the ‘Green Book’) providing additional details of tax proposals included in President Biden’s FY 2023 budget submission to Congress, many of which may affect high-income individual taxpayers and asset managers.
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’.
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.
Join our Tax Accounting Services (TAS) specialists on Thursday 24 March 2022 at 6pm as they take a deep dive into relevant tax accounting matters and recent tax developments.
Watch the replay where our specialists discuss 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.
The 2017 tax reform act amended Section 174, effective for tax years beginning after 2021, to require capitalization and amortization of research expenditures and software development costs. Watch the replay from 23 February where our panel of specialists discussed the implications of this new capitalization requirement, including potential impacts on the research credit, foreign tax credits, tested income, Section 861 allocation, Section 482 cost sharing arrangements, and state and local taxes.
Join our panel of specialists as we dive into this year’s Tax Policy Outlook, discussing the key role that tax can play around potential changes to US and global tax policy, a world of technological disruption, fractured geopolitics, the enduring impacts of the COVID-19 pandemic, and increased focus on ESG concerns. Watch the recording now.
Governor Gavin Newsom recently signed Senate Bill (SB) 113, which includes taxpayer-friendly changes to the California pass-through entity tax (PTE tax). SB 113 significantly expands the population of business entities eligible to make the PTE election and alleviates various concerns around the utilization of the PTE tax credits.
The US Court of Appeals for the Sixth Circuit in Whirlpool v. Commissioner recently affirmed the US Tax Court’s May 2020 decision. The Tax Court had held that Whirlpool’s controlled foreign corporation (‘CFC’) in Luxembourg had earned subpart F foreign base company sales income (‘FBCSI’) from supplying appliances manufactured in Mexico.
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.
North Carolina's franchise tax deduction for receivables made to affiliates was unconstitutional because the deduction was allowed only regarding in-state business.
Treasury and the IRS recently released final regulations addressing various aspects of the foreign tax credit (FTC) regime. Watch the replay from this webcast where our panel of PwC specialists discuss these final regulations and the impact they may have on taxpayers.
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.
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.
Unless pending legislation is enacted, a change to Section 174 requiring the capitalization of R&E expenditures is in effect for amounts paid or incurred in tax years beginning after 2021. A potential increase in the Section 163(j) interest deduction disallowance also has gone into effect in 2022. Taxpayers should consider the impact of these changes on their first quarter 2022 financial reporting and estimated tax payments and on cash taxes, R&E credits, Section 861 allocation and apportionment of R&E expenditures, state income taxes, and other tax matters.
The IRS and Treasury recently published final regulations under Sections 860A, 860G, 1001, 1271, 1275, and 7701(1). These regulations provide tax guidance with respect to alterations to debt instruments, derivative contracts, and other contracts that replace interbank offered rates (IBORs) - e.g., London Interbank Offered Rate (LIBOR) - with qualified replacement rates or provide fallback replacement rate provisions.
‘Cookie nexus’ does not constitute physical presence for Commerce Clause purposes in pre-Wayfair periods, the Massachusetts Appellate Tax Board (ATB) has ruled.
Chief Counsel Advice (CCA) 202132009 considers whether a taxpayer (remitting taxpayer) that pays the branded prescription drug fee (pharma fee) and is reimbursed by members of the taxpayer’s controlled group may exclude the reimbursement from gross income simply because the liability for the fee is joint and several.
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 November 19 by the House. Chairman Wyden noted that the bill text is subject to further revisions.
Watch the replay of this webcast where our panel of Tax Accounting Services (TAS) specialists take a deep dive into relevant tax accounting matters and recent tax developments.
The IRS has released final versions of two new forms that should be added to the tax returns of pass-through entities to report certain international income, deductions, credits, and other miscellaneous items.
The House on 19 November voted 220 to 213 to pass the “Build Back Better” reconciliation bill (H.R. 5376) that includes more than $1.5 trillion in business, international, and individual tax increase provisions. All but one Democrat voted for H.R. 5376; all Republicans voted against the bill.
The Oregon Tax Court’s Regular Division has reversed its prior decision and held that Subpart F income included in Oregon taxable income qualifies as a “gross receipt” for sales factor apportionment purposes. This finding allowed the Tax Court to evaluate whether a sales factor statutory provision operates to include or exclude such Subpart F income from the sales factor.
Louisiana voters recently defeated a constitutional amendment that would have centralized sales tax administration at the state level (eliminating a warren of parish sales tax assessors and audits) but approved another constitutional amendment significantly impacting individual income, corporate income, and corporate franchise taxpayers.
The House is expected to vote the week of 15 November on a revised version of the Build Back Better reconciliation legislation. This Tax Insights provides an analysis of some of the key tax provisions of the revised Build Back Better bill affecting high net-worth individuals and families.
The ‘Build Back Better’ reconciliation bill currently under consideration in the House retains, with some modifications, nearly all of the clean energy incentives included in the version of the bill approved by the House Ways and Means Committee in September along with several new credits.
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.
President Biden on 28 October announced a “Build Back Better” framework that outlines spending provisions described as costing $1.75 trillion over 10 years and revenue offsets believed to add up to nearly $2 trillion over the same period. The proposed revenue offsets include significant business, international, and individual tax increases, increased IRS enforcement measures, and repeal of a Medicare prescription drug rebate rule. Our PwC Tax Insights provides an analysis of key business and individual provisions proposed as part of the revised Build Back Better bill and includes a chart summarizing effective dates in the bill.
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.
President Biden announced on 28 October a framework agreement on “Build Back Better” legislation that the House could consider as early as 29 October. he framework agreement outlines spending provisions that are described as costing $1.75 trillion over 10 years, and revenue offsets that are believed to add up to nearly $2 trillion over the same period.
Senate Democrats are proposing new tax increase measures to offset the cost of “Build Back Better” reconciliation legislation in response to objections from Senator Krysten Sinema (D-AZ) to increasing the marginal tax rates for corporate, individual, and capital gains income.
Austria, France, Italy, Spain, the United Kingdom and the United States on 21 October 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.
In this webcast replay from Wednesday 20 October 2021, we explored effective solutions to meet extensive tax reporting requirements in a prioritized, cost efficient manner, as well as planning for what's around the corner in this ever-changing regulatory environment.
Watch this webcast replay from Wednesday 29 September where PwC professionals from our Tax, Deals and Value Chain Transformation practices had 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.
This Insight provides an overview of certain provisions in the federal “Build Back Better” reconciliation bill with observations as to potential state tax impacts.
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.
The ‘Build Back Better’ reconciliation bill approved September 15 by the House Ways and Means Committee (the bill) includes numerous incentives for clean energy.
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.
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.
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.
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.
This webcast took place on Wednesday 22 September 2021, where our panel of Tax Accounting Services (TAS) specialists took a deep dive into relevant tax accounting matters and recent tax developments.
Senate Finance Committee Chairman Ron Wyden, Finance Members Sherrod Brown and Senator Mark Warner have released discussion draft legislation and a six-page, section-by-section staff description on international tax reform proposals. The Discussion Draft builds on concepts set forth in a framework outline of proposals for overhauling international taxation that was released by Chairman Wyden, Senator Brown and Senator Warner on April 5, 2021.
The IRS has released procedures for taxpayers to change their methods of accounting to comply with final regulations under Section 451. Taxpayers impacted by the final regulations may need to make accounting method changes to comply with the Section 451 regulations under these new procedures.
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.
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.
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.”
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.
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.
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.
In this US webcast taking place on Wednesday 25 August at 7pm, we will explore two key focus areas of Environmental, Social, and Governance (ESG) - Reporting and Investment - and how they relate to tax and the increased demands for transparency.
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.
In Letter Ruling 21-06 (6/10/21), the Tennessee Department of Revenue addressed the franchise and excise tax implications when a partnership makes an IRC Sec. 754 election to step up the adjusted basis of its assets for federal income tax purposes, and the partnership elects to “push down” the purchase accounting adjustments resulting from the purchase that gave rise to the IRC Sec. 754 election.
Regulatory and legislative developments in the United States and abroad have generated continued interest in the financial accounting and reporting framework, including accounting for income taxes. Fundamental to the income tax accounting framework is an understanding of deferred tax accounting. In this publication we provide a refresher of the deferred tax accounting model and why deferred taxes are an important measure within the financial statements.
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).
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.
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.
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.
The Illinois Legislature has passed several bills that the governor is expected to sign. The bills as passed by the legislature are summarized in this Insight.
The President’s budget proposals include creation of a comprehensive financial account information reporting regime under which financial institutions would be required to report information on account inflows and outflows to increase reporting on earnings from investments and business activity. Similar reporting requirements would apply to crypto asset exchanges, custodians, and payment settlement entities.
The Massachusetts Supreme Judicial Court recently affirmed the right to apportion sales tax on software transferred for use in more than one state, allowing the sellers’ application for abatement of tax on out-of-state software use.
The New Jersey Tax Court recently found that the New Jersey Division of Taxation could not adjust NOL carryforwards that were created in years that were closed due to the state’s four-year statute of limitations against assessment. The Tax Court stated that such an adjustment would be “tantamount to an adjustment of the income reported in those years and thus constitutes an audit of closed years, which is impermissionable under the” New Jersey four-year statute of limitations.
The California Franchise Tax Board (FTB) recently held an Interested Parties Meeting (IPM) to discuss proposed amendments to the market-based sourcing rules under California Code of Regulations, title 18 (CCR), section 25136-2. Five previous IPMs for the market-based sourcing rules were held over 2017 – 2020. Few comments were made at the meeting.
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.
Watch the replay from this webcast held on Thursday 3 June 2021, where our PwC panel walked through Treasury's 'Green Book,' which adds details to President Biden's FY22 Budget proposals, and informs Congress.
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.
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.
The IRS recently issued Rev. Proc. 2021-26, which provides automatic consent for certain accounting method changes to the alternative depreciation system (ADS) for purposes of the global intangible low-taxed income (GILTI) regime under Section 951A, and updates terms and conditions for accounting method changes to take into account the enactment of Section 951A. Taxpayers subject to the GILTI regime may want to consider whether a change to the ADS for GILTI purposes may be necessary or beneficial.
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.
Join us on Wednesday, 23 June 2021 at 7pm for our Tax Readiness series: Q2 financial reporting considerations. Our panel of Tax Accounting Services (TAS) specialists will take a deep dive into relevant tax accounting matters and recent tax developments.
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.
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.
If you missed this webcast on Wednesday, 12 May 2021, you can watch the replay as we examine potential steps that businesses can take in the near-term to proactively prepare for any changes in trade policy.
Please join PwC professionals from our Tax and Deals practices on Wednesday, 26 May 2021 at 8pm 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.
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.
Watch this webcast replay from 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.
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.
Legislation passed by the Maryland General Assembly on the last day of the regular session (April 12) delays the state’s digital advertising gross revenue tax by one year and retroactively amends the state’s digital products sales tax provisions. Because of questions raised by litigation challenges to the Maryland digital advertising tax under the federal Internet Tax Freedom Act and the US Constitution and the lack of guidance from the Comptroller on how to source digital ad revenue, a delay has been expected.
The New York Legislature recently approved comprehensive tax legislation (S2509-C/A3009-C) as part of the state’s FY 22 budget. The legislation includes increased taxes on businesses and high-income individuals and a pass-through entity tax option. Other provisions include amendments to the real estate transfer tax and the impact of a remote workforce on state tax benefits. Read more in this PwC Tax Insights.
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.
Virginia’s FY 2020-2022 budget enacted on April 7 includes a requirement for “corporations that are members of a unitary business” to file a report declaring certain unitary combined reporting items for the 2019 tax year. Under an amendment requested by Governor Ralph Northam (D) and approved by the General Assembly, these pro forma reports are due by July 1, 2021.
We asked Tax leaders to weigh in on their priorities and outlook on the business environment as well as their perspectives on international tax rules and environmental, social and governance issues. Tapping into this collective intelligence can help you anticipate what’s next, see how you measure up, and spark new ideas for growth.
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.
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 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.
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.
The US Tax Court recently held that a taxpayer was not entitled to Section 41 research credits for activities conducted by its shipbuilding subsidiary regarding development of a tanker and dry dock. In a 61-page opinion, the court found that the subsidiary did not perform ‘qualified research’ as defined in Section 41(d) and that ‘the includible amount of QREs for each of the Apex tanker and the dry dock pursuant to section 41(a) and (b) [therefore] was zero.’
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 IRS and Treasury have released final regulations under Section 162(f) and Section 6050X, Section 162(f) generally disallows a deduction for certain payments to the government or another entity for violations of law. Section 6050X requires the government or entity to file an information return. The final regulations significantly expand the exception to disallowance for amounts paid or incurred for restitution or remediation or to come into compliance with law.
US Treasury and the IRS recently released final regulations under Section 163(j). The regulations finalize, with certain key changes and reservations, proposed regulations published in the Federal Register on September 14, 2020. Section 163(j), which was modified by the 2017 tax reform legislation and the CARES Act, generally limits US business interest expense deductions to the sum of business interest income, 30% (or 50%, as applicable) of adjusted taxable income, and the taxpayer’s floor plan financing interest for the tax year.
President-elect Joe Biden has proposed a $1.9 trillion emergency legislative package (the American Rescue Plan) to fund COVID-19 vaccinations, provide increased direct relief to individuals, and support communities. Biden said the proposal is the first step in a two-part plan that is needed immediately and will be followed by an economic recovery plan -- the Build Back Better Recovery Plan -- that he will outline in February.
The IRS and Treasury have released final regulations under Sections 451(b), 451(c), and 1275 dealing with the all-events test for recognizing gross income and the limited advance payment deferral. The final regulations include significant new rules on amounts for which there is no enforceable right to payment and on offsetting revenue for certain inventory costs.
The final regulations apply generally for tax years beginning on or after January 1, 2021.
Watch the replay from this webcast held on 14 January 2021 where we discussed significant issues arising under the recently published Section 451 final regulations dealing with recognizing income under the all-events test and the advance payment deferral method.
Prospects for action on President-elect Joe Biden’s tax proposals have increased significantly with Georgia Senate runoff election results putting Democrats on track to control the Senate as well as the House. Based on unofficial results, Democratic candidate Raphael Warnock is projected by the Associated Press to have defeated incumbent Senator Kelly Loeffler (R-GA) and Democratic candidate Jon Ossoff is leading former Senator David Perdue (R-GA). Democratic victories in the two Georgia races would result in a 50-50 Senate with the tie-breaking vote of Vice President-elect Kamala Harris giving Democrats a de facto 51-50 majority.
The US Treasury and the IRS recently released Final Regulations (which finalize with modifications the 2019 Proposed Regulations published on July 11, 2019) under Sections 1291, 1297, and 1298, and Proposed Regulations under Sections 250, 951A, 1291, 1297, and 1298. This Insight covers the key provisions of the Final Regulations and the Proposed Regulations.
The US Congress recently approved a $2.4 trillion legislative package to fund the federal government through the end of the fiscal year, provide further COVID-19 economic relief, and extend certain expiring tax provisions. Additional measures include provisions to eliminate ‘surprise’ medical billing. The House passed the legislation by a vote of 359 to 53 and the Senate voted 92 to 6 to clear the legislation for President Trump’s expected signature.
The 2017 tax reform act generally eliminated the deduction for business expenses for providing employees with qualified transportation fringe benefits and for providing or paying for employee commuting. The IRS and Treasury have finalized regulations proposed in June 2020 on these disallowances. The final regulations provide helpful clarifications, especially as regards the application of the exceptions for QTFs to the disallowance and how the rules apply during the COVID-19 pandemic.
Watch this webcast replay where our PwC panel share potential implications of the US elections on US operations of global companies headquartered outside the United States.
The US Treasury and the IRS have released guidance under the passive foreign investment company (PFIC) regime in the form of two regulation packages: Final Regulations (which finalize the 2019 Proposed Regulations published 11 July 2019) under Sections 1291, 1297, and 1298; and new Proposed Regulations under Sections 250, 951A, 1291, 1297, and 1298.
The US Treasury and the IRS released final regulations (the Final Regulations) and proposed regulations (the 2020 Proposed Regulations) regarding the downward attribution rules under Section 958 in light of the repeal of Section 958(b)(4) as part of the 2017 tax reform legislation (the Act).
While many taxpayers consider possible future tax policy changes that may result from the recent federal elections, they should also turn their attention to certain current year tax provisions affecting individuals that will expire at the end of 2020. Taxpayers should consider planning for these changes before year-end.
The direction of US international tax policy in the next congress and new Administration will be determined largely by the outcome of the 2020 federal elections. Former Vice President Joe Biden is projected to have secured more than the required 270 electoral votes to have won the presidency. This Insight outlines business tax changes that Biden proposed during his campaign as well as ongoing global tax talks.
US Treasury and the IRS recently released Final Regulations under Sections 1446(f) and 864(c)(8). Section 1446(f), added to the Code by the 2017 tax reform legislation, provides rules for withholding on the transfer or disposition of a partnership interest. Proposed Regulations were issued in May 2019, which laid the framework for guidance on withholding and reporting obligations under Section 1446(f) (the Proposed Regulations). The Proposed Regulations also addressed information reporting under Section 864(c)(8); these rules were finalized in September 2020. The Final Regulations retain the basic structure and guidance of the Proposed Regulations, but with various modifications.
The US 2017 tax reform act amended Section 168(k) to provide for 100% bonus depreciation for qualified property acquired after September 27, 2017, and placed in service before 2023 (2024 for certain aircraft and longer production period property), with declining percentages thereafter. The IRS and Treasury previously published a series of regulations, including proposed and final regulations in 2019 and final regulations in 2020, implementing these provisions. The IRS recently issued Rev. Proc. 2020-50, which provides procedures for bonus depreciation automatic accounting method changes, elections, and election revocations to comply with the bonus depreciation regulations.
The IRS recently issued Notice 2020-75, informing taxpayers of forthcoming proposed regulations designed to clarify that state and local income taxes imposed on, and paid by, a partnership or an S corporation on its income are allowed as a deduction in computing the entity’s non-separately stated taxable income or loss for the tax year of payment. Under the regulations, partnerships and S corporations could deduct state and local income taxes against ordinary income, with no addback required at the individual partner or shareholder level.
Updated 2020 federal election results show that Democratic presidential candidate Joe Biden is projected to have won the race for the White House, but control of the Senate may not be decided until January 2021 when run-off elections are expected to be held for two Georgia Senate races.
The US Treasury and the IRS recently released Final Regulations under Section 1502 implementing recent statutory amendments to Section 172 relating to the absorption of consolidated net operating loss (CNOL) carryovers and carrybacks. Treasury and the IRS on July 8, 2020 published proposed and temporary Section 1502 regulations (the 2020 Proposed Regulations and 2020 Temporary Regulations) implementing the amendments to Section 172.
The recently released Final Regulations for the Base Erosion and Anti-Abuse Tax (BEAT) is of importance for US inbound companies, with the characterization of base eroding payments being especially significant. The 2020 Final Regulations contain additional changes that may have a material impact on US inbound companies.
Recently released final regulations addressing the Section 250 deduction for foreign-derived intangible income (FDII) provide domestic corporations – including those in the cryptocurrency and digital asset space – potentially a clearer path to reducing the amount of US tax imposed on certain types of 'foreign-derived' income.
US Treasury and the IRS on September 29 released Final regulations under Sections 863, 865, 937, and 1502. The Final Regulations provide important guidance for taxpayers with cross-border supply chains, particularly those that manufacture inventory outside the United States for sale into the United States as well as foreign corporations where a US office materially participates in the sale.
The US Treasury and the IRS recently released final regulations and proposed regulations addressing various aspects of the foreign tax credit (FTC) regime. In this Alert, we identify some of the key highlights .
The IRS and Treasury have finalized proposed regulations published in 2019 providing additional rules for bonus depreciation under Section 168(k), as amended by the 2017 tax reform act (the Act). These final regulations also provide clarifications to earlier final regulations under Section 168(k) (2019 final regulations). Like the proposed regulations that preceded them, the final regulations provide helpful clarifications and rules that expand the availability of bonus depreciation for many taxpayers.
US Treasury and the IRS have released final and proposed regulations to provide administrative guidance for the Foreign Tax Credit (FTC) regime, which was updated in the 2017 tax reform act.
The US Treasury and the IRS have issued Notice 2020-73 on September 17. The Notice indicates that the IRS 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 December 7, 2021.
The US Treasury and the IRS on September 1 released 103 pages of Final Regulations for the Base Erosion and Anti-Abuse Tax (BEAT) under Section 59A as enacted by the 2017 tax reform legislation. The BEAT rules require certain corporations to pay a minimum tax on taxable income as computed without certain deductions for certain payments to foreign related parties.
The US Treasury and the IRS have released final regulations under Section 59A (the base erosion and anti-abuse tax or BEAT). These regulations finalize proposed regulations published in the Federal Register on December 6, 2019. The final regulations retain the basic approach and structure of the proposed regulations. Important for the insurance industry is the treatment of reinsurance premiums paid as deductions for purposes of the waiver election.
The US Treasury recently issued Notice 2020-69, which, among other things, provides notice that regulations are expected that would allow certain S corporations to elect entity-level treatment for purposes of the Global Intangible Low-Taxed Income (GILTI) rule under Section 951A.
The US Treasury and the IRS have released final regulations under Section 59A (‘the base erosion and anti-avoidance tax’ or ‘BEAT’). BEAT, which requires certain US corporations to pay a minimum tax associated with, broadly speaking, deductible payments to non-US related parties, was enacted by the 2017 tax reform act.
US Treasury and the IRS recently published Final Regulations and 2020 Proposed Regulations under Section 245A, as enacted by the 2017 tax reform legislation, and Sections 954 and 6038. On June 18, 2019, Treasury and the IRS had published temporary regulations and cross-referenced the proposed regulations under Sections 245A, 954, and 6038. As of August 27, 2020, the 2019 Proposed Regulations are finalized, and the 2019 Temporary Regulations have been removed.
Join us on Wednesday, 16 September at 5pm for the results of the latest PwC Pulse survey, which will feature what’s on the minds of senior executives heading into this historic US election and how businesses can prepare for potential impacts.
Recently, Treasury and the IRS released long awaited proposed regulations under Section 1061. The proposed regulations define key terms, describe the method for calculating the amounts subject to Section 1061, provide rules for applying Section 1061 through tiers of passthrough entities, detail the application of the exceptions to Section 1061, provide reporting rules, and describe rules for transfers to related parties. Watch this related webcast replay.
US Treasury and the IRS recently released final regulations and proposed regulations on the Section 163(j) interest expense limitation rules. The final regulations generally finalize proposed regulations published in November 2018. This Insight describes the most significant changes from the 2018 proposed regulations in more detail.
US Treasury and the IRS have released final regulations and proposed regulations under Section 163(j). Watch this webcast replay from August 11th 2020 where we discussed the guidance.
US Treasury and the IRS have released final regulations and proposed regulations under Section 163(j). Section 163(j), which was modified by the 2017 tax reform act and the CARES Act, generally limits US business interest expense deductions to the sum of business interest income, 30% (or 50%, as applicable) of adjusted taxable income (ATI), and the taxpayer’s floor plan financing interest for the tax year.
The US Treasury has released Final Regulations and Proposed Regulations under Section 954, and Section 951A as enacted by the 2017 tax reform legislation (the Act). These regulations relate to the treatment of income that is subject to a high rate of foreign tax under the global intangible low-taxed income (GILTI) and subpart F income regimes.
Treasury and the IRS, recently released final regulations for the Foreign-Derived Intangible Income (FDII) and Global Intangible Low-Taxed Income (GILTI) (the Section 250 deduction) as enacted by the 2017 tax reform legislation. The Section 250 deduction generally provides taxpayers a deduction with respect to deemed intangible income earned from servicing foreign markets directly from the United States or through controlled foreign corporations (CFCs). If you missed our webcast on 21 July where we discussed the Section 250 deduction guidance you can watch the replay here.
US Treasury and the IRS have released 295 pages of final regulations addressing the Deduction for Foreign-Derived Intangible Income and Global Intangible Low-Taxed Income (the Section 250 deduction) as enacted by the 2017 tax reform legislation. The Section 250 deduction generally provides taxpayers a deduction with respect to deemed intangible income earned from servicing foreign markets directly from the US or through controlled foreign corporations.
The US Federal Register released the final regulations for the FDII and GILTI deduction under Section 250. Section 250 was enacted under the 2017 tax reform act and set forth a deduction for domestic corporations equal to the sum of 37.5 percent of their foreign-derived intangible income and 50 percent of their global intangible low-taxed income and section 78 amount, up to a limit based on taxable income. Section 250 also introduced rules for determining FDII.
Treasury and the IRS released regulations under Section 385 that finalize the treatment of certain qualified short-term debt instruments, transactions involving controlled partnerships, and transactions involving consolidated groups for purposes of classifying certain interests in corporations as stock or indebtedness under final regulations published in 2016. While the 2020 Final Regulations, published May 13, do not contain substantive changes from the proposed and temporary regulations that were issued contemporaneously with the issuance of the 2016 Final Regulations, they have practical impact for multinational enterprises and present several issues and potential traps that corporations should consider in structuring or revising their intercompany debt or financing arrangements.
The road to a global agreement on changes to the international tax framework has become more uncertain following the US Treasury’s decision to pause some of its participation in the OECD negotiations.
The IRS recently issued correcting amendments to the final and proposed foreign tax credit (FTC) regulations released last December. While primarily addressing clerical issues (such as updating incorrect cross references), the amendments make important corrections with respect to the waiver of the five-year binding rule regarding the method for allocating and apportioning R&E expense and the pre-effective date application scope of the proposed regulations.
The CARES Act provides a technical correction to a drafting error in the 2017 tax reform act, which had omitted qualified improvement property (QIP) from the definition of qualified property eligible for additional first-year (bonus) depreciation. The IRS has released Rev. Proc. 2020-25, allowing taxpayers to change depreciation for QIP placed in service after 31 December 2017. The revenue procedure also allows taxpayers to make certain elections late or to revoke or withdraw previous elections.
US Treasury and the IRS recently published regulations that finalize 2018 proposed regulations addressing anti-hybrid rules under Sections 245A(e), 267A, and 1503(d). On the same date, Treasury and the IRS issued additional proposed regulations under Sections 245A(e), 881 (with respect to the anti-conduit regulations), and 951A. Read our additional analysis here.
The US Treasury has released final regulations under Sections 245A(e) and 267A and proposed regulations under Sections 245A(e), 881, and 951A. Section 245A generally provides a 100% dividends received deduction (DRD) for the foreign-source portion of dividends received by a US corporation from foreign corporations with respect to which it is a 10% US shareholder. Section 245A(e), however, denies the DRD for any amount received from a controlled foreign corporation (CFC) for which the CFC receives a deduction or other benefit for foreign income tax purposes (a hybrid dividend). Section 267A disallows deductions for certain related-party payments in connection with hybrid transactions or made by or to hybrid entities.
US Treasury and the IRS recently released final regulations relating to the limitation on foreign tax credits (FTCs) for foreign taxes paid or accrued in connection with covered asset acquisitions (CAAs) under Section 901(m). Section 901(m) disallows a portion of the FTC attributable to a basis difference in assets acquired in a CAA. The final regulations are generally consistent with temporary and proposed regulations issued on December 6, 2016, with targeted revisions to address some comments received from taxpayers.
The 2017 tax reform act significantly limited the trade or business expense deduction for meals and entertainment by generally disallowing deductions for business entertainment expenses and removing the de minimis fringe benefit exception to the 50% deduction disallowance for meal expenses. These amendments apply to expenses paid or incurred after December 31, 2017. The IRS and Treasury have published proposed regulations interpreting these rules.
With a US presidential election on the horizon, doubts about political and economic stability, and continuing shifts in global tax policy, 2020 promises to be an eventful year with uncertainty around the impact that these factors will have on the business and tax community. How should you prepare for what lies ahead in 2020?
Divided government, the impeachment of President Trump, global tensions and a focus on the 2020 elections -- While US and global tax rules constantly evolve, the scope and pace of the changes currently under consideration or already underway is unprecedented.
The IRS recently released proposed regulations under Section 382(h), which partially withdraw selected text of the 2019 proposed Section 382(h) regulations primarily relating to the date the final Section 382(h) regulations would become applicable to taxpayers.
The House passed FY 2020 funding legislation on 17 December 2019 that includes a significant year-end tax package that was agreed to by Congressional leaders and Trump administration officials.
2019 was an eventful year that saw the IRS and Treasury issue a number of important regulations and other published guidance under the 2017 tax reform act. This Insight summarizes many of those developments and other tax issues and provisions.
Watch the replay from this webcast held on December 16th where we discussed the latest foreign tax credit (FTC) guidance and read our additional analysis.
US Treasury recently released both Final and Temporary Regulations along with Proposed Regulations under Sections 704, 861, 901, 904, 905, 954, 960, 965 and 986. These regulations are administrative guidance with respect to the foreign tax credit regime following the enactment of the 2017 tax reform act.
The Qualified Opportunity Zone program, enacted in the 2017 tax reform legislation, has triggered developments in Congress and the Administration. Several bills have been introduced that are intended to strengthen reporting requirements, while bills by Senate Finance Committee Ranking Member Ron Wyden (D-OR) and others call for substantive changes to the Act's provisions.
Treasury has released Final Regulations and Proposed Regulations under Section 59A (‘the base erosion and anti-avoidance tax' or ‘BEAT’). BEAT, which requires certain US corporations to pay a minimum tax associated with deductible payments to non-US related parties, was enacted by the 2017 tax reform act. Treasury previously released proposed regulations under Section 59A on December 13, 2018 (published December 21, 2018 in the Federal Register).
Watch the replay from this webcast held on 9 December, where PwC industry professionals and specialists highlighted trends affecting foreign direct investment and the US operations of global companies. Panelists provided a view of 2020 including expected policy, trade and political developments.
PwC’s Washington National Tax Services on October 16 hosted the live webcast “Tax Readiness: Recession or not, how troubled businesses will be affected by the Section 382 proposed regulations”, featuring PwC Tax and Deals specialists. They discussed economic risk factors for US companies, and the tax impact that the proposed regulations under Section 382(h) (the Proposed Regulations), released by Treasury on September 9, may have on troubled businesses.
PwC professionals discussed the Section 451(c) proposed regulations and Rev. Proc. 2019-37 in a Tax Readiness series webcast on Tuesday, October 1, 2019. Watch the replay.
The IRS and Treasury have released long-awaited proposed regulations implementing Sections 451(b) and 451(c), added by the 2017 tax reform act, and Rev. Proc. 2019-37, which provides procedures for a taxpayer to change its method of accounting to comply with the amendments to Section 451, including the proposed regulations. This Insight discusses the Section 451(b) proposed regulations. PwC professionals discussed the proposed regulations in a Tax Readiness series webcast on September 26, 2019.
A year after the US Supreme Court’s Wayfair decision, marketplace sellers and facilitators continue to struggle applying new state thresholds, effective dates, definitions, and other provisions. Many questions remain as companies update their processes and systems while monitoring for new marketplace compliance requirements. View the replay from this recent webcast and read our Insights which highlight the discussions.
The US tax reform legislation (the Act) enacted in late 2017 made important changes that affect financing of US operations of companies not headquartered in the United States. Now that taxpayers and practitioners have had an opportunity to digest the impact of these changes, this is an excellent time to take a closer look at these provisions, especially with the IRS having published pertinent regulations and other guidance, with more expected in the near future.
The comprehensive federal tax reform legislation enacted in late 2017 and subsequently issued guidance significantly affect the ability of taxpayers to claim foreign tax credits (FTCs). The ability to claim FTCs is closely tied to how certain expenses - including selling, general, and administrative (SG&A) and stewardship - are allocated and apportioned among different categories of income. Similar rules may also affect foreign-derived intangible income (FDII) benefits. Watch the replay from a recent PwC webcast featuring specialists who discussed these issues and read our Insight highlighting those discussions.
Watch this recording where our panel of State and Local Tax (SALT) specialists discussed the potential for state tax reform including a split roll property tax and extending the sales tax to services, the state’s response to Wayfair, and the state’s new tax appeals process.
PwC recently submitted a comment letter regarding the proposed regulations under Section 1446(f) that address tax withholding and information reporting on partnerships with a US trade or business. Section 1446(f) was enacted as part of the 2017 tax reform act, and the proposed regulations were issued on May 13, 2019.
US Treasury and the IRS recently released final and proposed regulations under Section 951A as enacted by the 2017 tax reform legislation and provisions related to implementing Section 951A. The Final Regulations and Proposed Regulations provide guidance relating to a US shareholder's pro rata share of its global intangible low-tax income (GILTI).
US Treasury and the IRS recently released 105-page temporary regulations under Section 245A as enacted by the 2017 tax reform legislation. The regulations seek to limit the benefits of section 245A where “the literal effect of section 245A would reverse the intended effect of the subpart F and GILTI regimes.”
View the recording of this webcast in our Tax readiness series: Q2 financial reporting considerations. Our panel of Tax Accounting Services (TAS) specialists will take a deep dive into relevant tax accounting matters and recent tax developments.
US Treasury released, on May 17, proposed regulations under Sections 954 and 958 (the Proposed Regulations) for the purposes of computing subpart F income and global intangible low-taxed income (GILTI).
In this webcast our state tax experts explained the current US sales tax and state income tax requirements from a US inbound perspective, and covered examples of circumstances where a compliance responsibility may exist and the potential consequences.
Watch the latest webcast in our Tax Readiness series: Tax issues arising from settlements and judgments after tax reform held on Wednesday, May 15, 2019.
Watch the replay of this latest webcast in our Tax Readiness series: Understanding the new Opportunity Zone guidance and how it applies to businesses and investors held on 30 April 2019.
The Opportunity Zones (OZ) Program is intended to spur investment in economically distressed communities and promote long-term economic growth in these communities through a variety of investment vehicles. Over the past several months, taxpayers have anticipated the proposed regulations with the expectation that they will provide a certain level of assurance on key issues that may affect investments in qualified opportunity funds.
The US 2017 tax reform Act (the Act) continues to have a substantial impact on multinational companies, whether headquartered in the United States or elsewhere. In some instances, the provisions of the Act are causing unintended consequences for non-US headquartered companies (US inbound companies) as they interact with provisions of their home countries’ tax laws. Even a positive aspect of US tax reform – such as the reduction of the corporate income tax rate – may negatively impact certain business operations of US inbound companies.
Watch the replay from the second of our two-part U.S. Tax Reform Webcast series held on 27 March. This webcast series is an extension of our previous series on U.S. tax reform from an EMEA perspective.
Watch the replay from this webcast held on Wednesday, March 27, 2019 where our panel of Tax Accounting Services (TAS) specialists looked at relevant tax accounting matters and recent tax developments.
The proposed regulations raise a number of important issues. On 14 March, PwC hosted a webcast featuring PwC specialists who discussed some of these issues. This Insight highlights those discussions.
Watch this webcast replay from 20 March 2019 where we discussed key federal tax reform provisions (GILTI, FDII, 163(j), etc.) and analysed the related state tax implications of these provisions.
PwC’s US Inbound Tax Services invites you to join the discussion to identify the opportunities for your global business and US operations today - and tomorrow. Watch the webcast replay.
The 2017 tax reform act has intertwined S corporation ‘reasonable compensation’ with the new Section 199A deduction in that the amount of compensation paid to S corporation shareholder employees can impact the extent to which the Section 199A deduction is allowed.
The 2017 US tax reform act repealed Internal Revenue Code Section 708(b)(1)(B), otherwise referred to as the partnership technical termination provision. Under the revised federal law, a sale or exchange of 50% or greater interest in a partnership does not terminate the partnership nor end the partnership’s taxable year.
The 2017 tax reform act (the Act) introduced new Code Section 965, which imposes a ‘toll charge’ on mandatory deemed repatriation of certain deferred foreign earnings. The IRS on January 15 released final regulations under Section 965 that retain the overall structure and basic approach of the proposed Section 965 regulations released on August 1, 2018, with modifications.
The Section 199A final regulations raise a number of important issues. PwC on February 12 hosted a webcast featuring PwC specialists who discussed some of these issues. This Insight highlights those discussions.
The IRS has released a set of Questions and Answers (Q&As) that provide guidance on Section 965 reporting and payment requirements for 2018 tax returns, including obligations resulting from amounts included in income for the 2017 tax year.
The final Section 965 regulations, released on January 15, 2019 (and subsequently updated), specify that, for taxpayers that elected to pay their toll tax liability in installments, if a triggering event or acceleration event occurred on or before the date that the final Section 965 regulations are published in the Federal Register, then a transfer agreement to avoid an acceleration event must be filed within 30 days of that publication date in order to be considered timely filed.
Join us Thursday, January 31, 2019 from 2-3:00PM EDT for the latest webcast where we’ll share reactions to the State of the Union address and also talk through PwC’s latest thought leadership, the 2019 Tax Policy Outlook and Top Policy Trends.
The 2018 US midterm elections and partial government shutdown illustrate the intensified ongoing disagreements between the political parties on how to address many issues, including tax policy, healthcare, immigration, and the environment. A key challenge facing the new 116th Congress and President Trump, will be whether bipartisan agreements can be reached to enact significant legislation with a Democrat-controlled House and a Republican-led Senate.
This PwC Tax Insight highlights some of the major considerations in evaluating the impact of certain federal provisions and notes the need for separate state calculations for many federal tax reform matters.
Treasury has released proposed regulations (the Proposed Regulations) under the new dividends received deduction (DRD) and anti-hybrid rules as enacted under Sections 245A and 267A, respectively.
Watch the replay of this webcast from Thursday 3 January 2019 where our panel of Tax Accounting Services (TAS) specialists take a deep dive into relevant tax accounting matters impacting year-end financial reporting.
The BEAT rules require certain corporations to pay a minimum tax on payments to non-US related parties. The Proposed Regulations, released on December 13, 2018, are the first regulatory guidance under new Section 59A, which was enacted by the 2017 tax reform act (the Act).
The US tax system is one of the most complicated in the world. It is important that individuals, organisations and employees understand the impact of US tax on everyday decisions.
The proposed regulations raise a number of important issues. PwC on December 12 hosted a webcast featuring PwC specialists who discussed some of these issues. This Tax Insight highlights those discussions and you can watch the webcast replay.
The proposed regulations raise a number of important issues. PwC on December 6 hosted a webcast featuring PwC specialists who discussed some of these issues. This Insight highlights those discussions.
The Proposed Regulations, are the first form of administrative guidance with respect to the foreign tax credit (FTC) regime following the enactment of the 2017 tax reform act (the Act).
On November 26, the US Treasury released proposed regulations (the Proposed Regulations) concerning the Section 163(j) interest expense limitation rules. We will discuss the Section 163(j) guidance in an upcoming Tax Reform Readiness series webcast.
Chairman Kevin Brady (R-TX) released a 297-page tax bill that includes a limited number of technical corrections to the 2017 tax reform act and more than 30 ‘tax extender’ provisions dealing with expired or expiring tax provisions.
On August 1, Treasury and the IRS released a 249-page set of proposed regulations under Section 965, addressing a wide range of issues regarding the toll charge. PwC on August 9 hosted a webcast featuring PwC specialists who discussed the proposed Section 965 regulations. This Insight highlights some of those discussions.
On 1 August 2018 the US Treasury and the IRS released proposed regulations under Section 965 (the Proposed 965 Regulations). The Proposed 965 Regulations provide guidance relating to the ‘toll tax’ due upon the mandatory deemed repatriation of certain deferred foreign earnings.
Companies in the U.S. were already sitting on piles of cash before tax reform passed in December 2017. Now, with a strengthening global economy and a tax overhaul that lowers the corporate tax rate from 35 to 21 percent and incentivises U.S. companies to repatriate all their previously untaxed foreign earnings, those piles of cash are poised to grow substantially. Some estimate there may be more than US$330 billion in tax savings for corporations over the next 10 years, not including the trillions of dollars held overseas that may now come home. The big question is: What will companies do with this windfall?
The 2017 tax reform reconciliation act (the Act) is having a substantial impact on US taxpayers. Among the most significant areas of impact are the international tax reform provisions and their interactions with each other.
On May 2 we hosted a webcast featuring PwC specialists who discussed some of the key interactions among these provisions. This Insight highlights some of those discussions.
The Treasury and the IRS have released Notice 2018-26, signalling intent to issue regulations related to mandatory repatriation (the 'toll tax'). Notice 2018-26 is the third notice issued as part of the transition to a new territorial tax regime under the 2017 Tax Reform Reconciliation Act, also known as the ‘Tax Cuts and Jobs Act.’
If you are a US citizen or resident or have US family members involved in your Canadian business, consider how the recent US tax reform may impact you.
For the CFO and Corporate Treasurer, US tax reform could affect everything from capital allocation, funding strategies and liquidity management practices to structure and organisation, presenting new opportunities and risks to the prior ways of conducting business. With this in mind, they should therefore act quickly by evaluating the implications to the company and work across the enterprise to compose short and long term strategy and execution plans.
One of the biggest tax stories of recent months has been the sweeping changes being made to the US tax system. It's clear that when the world's biggest economy makes significant tax changes, it's a big deal worldwide, the effects are far-reaching and could affect all of us. What are the implications for policy makers, and what should businesses be aware of?
Any company with a US footprint is potentially impacted by US tax reform, albeit each a bit differently. Our Tax Valuations team (working alongside tax) can assist on a variety of issues which might arise out of these changes, especially with effective tax rate and provisioning modelling, the consequential impacts on deal pricing and debt push-down analysis, and any changes to operating models.
The 2017 tax reform reconciliation act - the largest overhaul of the US tax code in 31 years - is already having a substantial impact on US taxpayers, including on operating models and business strategy decisions.
Recordings are now available of all three episodes in our recent series of webcasts focused on the aspects of US tax reform likely to have the biggest impact on European headed multinationals.
We highlight the key changes together with some brief commentary on things that can be done before the end of the year to maximise the benefit of various deductions/exemptions that certain taxpayers or employers may claim.
On Friday 22 December, President Trump signed the tax reform bill (HR 1) into law. The law will lower business and individual tax rates, modernize US international tax rules, and provide the most significant overhaul of the US tax code in more than 30 years.
On 22nd December 2017, the Tax Cuts and Jobs Act, which brings significant changes to the US tax system, was signed by President Trump and has now become law. The legislation impacts the taxation of some executive compensation and a number of employee benefits.
UK business with a US footprint will be impacted by the US tax reform, which includes a lower corporate tax rate and a broad range of cross border provisions.
Congress has given final approval to the House and Senate conference committee agreement on tax reform legislation (HR 1) that will lower business and individual tax rates, modernise US international tax rules, and provide the most significant overhaul of the US tax code in more than 30 years.
When it comes to accounting for tax reform under US GAAP, new questions arise every day. This “frequently asked questions” document shares our views on the most common questions. It covers topics such as accounting for tax reform by non-calendar year ends, asserting indefinite reinvestment in light of tax reform, application of SAB 118, interplay of tax reform with business combinations and goodwill impairments, and other hot topics.
On 15 December, a House and Senate conference committee reached agreement on a final version of tax reform legislation, the ‘Tax Cuts and Jobs Act,’ that would lower business and individual tax rates, modernize US international tax rules, and provide the most significant overhaul of the US tax code in more than 30 years.
Watch a recording of our recent webcast (19 December 2017) to learn more about what the US Senate's tax reform legislation has in store for global companies that do business in the United States.
We highlight some of the key considerations for individuals and employers who interact with the US, and provide some initial guidance on the proposed tax reforms which are likely to come into effect for the 2018 tax year.
To help you assess the financial reporting implications of the US tax reform, we have prepared a summary of the key proposals together with the relevant tax accounting implications under US GAAP.
The Senate Finance bill introduces a new tax on ‘global intangible low-taxed income’ and a minimum ‘base erosion and anti-abuse tax’ imposed on certain payments by a US corporation to a foreign related entity.
Watch the replay of this webcast held on Wednesday 25 September 2019 to hear perspectives from our PwC specialists as they look at expected US political and regulatory activity for the remainder of 2019.
