Cross-border Tax Talks

Latest Episodes:

Trading places: Trade considerations for tax professionals Mar 04, 2021

Show notes

Doug McHoney (PwC's US International Tax Services (ITS) Leader) and Chris Desmond (PwC's Global Trade Services Practice Leader) discuss the global trade landscape. In addition to their prognostications for Major League Baseball's NL Central division, Doug and Chris cover: how trade and tax are interrelated; how businesses can structure their trade and tax groups to encourage coordination; the 'big picture' trade landscape both inside and outside of the US; recent changes to US trade regulations; Section 301 and how Section 301 tariffs operate; impacts that Katherine Tai—President Biden's nominee for United States Trade Representative—may have on US trade policy; what duty drawback is and how businesses can utilize it; global updates to digital service taxes (DSTs) and how Section 301 tariffs interrelate with DSTs; how practical it is for businesses to shift supply chains in light of tariffs; President Biden's 'Made in America' executive order and how it may impact multinational enterprises; the importance of modeling from both a trade and tax perspective; and final pieces of advice for taxpayers.

Grab your passport: global tax policy update Feb 18, 2021

Show notes

Doug McHoney (PwC's US International Tax Services (ITS) Leader) and Will Morris (PwC's Deputy Global Tax Policy Leader) discuss important updates to international tax policy. Doug and Will cover: recent updates to the OECD's base erosion and profit shifting (BEPS) project—BEPS 2.0—including the proposed timeline for agreement, unresolved issues in the Pillar One and Pillar Two Blueprints, and potential challenges to implementation; recent IRS and Treasury appointees and how these individuals may affect domestic and international policy; the challenges of amending US treaties even if the OECD's Inclusive Framework reaches consensus; the EU Court of Justice's recent decision in Lexel AB v. Skatteverket regarding the EU's 'freedom of establishment' concept and how this decision may cause challenges in implementing Pillar Two in the European Union; recent developments concerning digital service taxes (DST), including a look at the UK's proposed online sales tax and diverted profits tax, India's equalization levy, and Indonesia's electronic transactions tax; a recent court decision in France related to a permanent establishments; and how taxpayers can prepare for international tax disruption.

More items of interest: The final 163(j) regulations Feb 11, 2021

Show notes

Doug McHoney (PwC's US International Tax Services (ITS) Leader) and Rebecca Lee (ITS Partner in PwC's Washington National Tax Services office) have much to cover with the recently released final regulations under Section 163(j). Doug and Rebecca discuss: the background of the interest expense limitation rules under Section 163(j); the content and formulation of the 2018 proposed regulations, 2020 proposed regulations, and 2020 final regulations issued under Section 163(j); the new administration's potential influence on the 2021 final regulations; how the 2021 final regulations amend the definition of 'interest' and the calculation of adjusted taxable income (ATI); how the 2021 final regulations affect C corporations, consolidated groups, and partnerships; what the CFC group election is and how companies can make the election; the many anti-abuse rules contained in the 2021 final regulations; changes to the safe-harbor election; and advice for taxpayers on how to consistently and accurately apply the multitude of rules under Section 163(j).

Bring SALT to the table: Key state and local topics Feb 05, 2021

Show notes

Doug McHoney (PwC's US International Tax Services (ITS) Leader) and Rob Ozmun (State and Local Tax (SALT) Partner in PwC's Washington National Tax Services office) peel the onion on how state and local tax issues can impact cross-border planning, and vice versa. Doug and Rob set the table with a brief primer on state and local corporate tax, then devour topics including: state conformity to the Internal Revenue Code; how different states have handled federal developments regarding subpart F income, global intangible low-taxed income (GILTI), the Section 965 'toll charge,' and the Section 250 deduction; how businesses are analyzing the dividends received deduction (DRD) under Section 245A and the GILTI high-tax exception at the state level; important state and local considerations related to the business interest expense deduction rules under Section 163(j); how states have reacted to the CARES Act; how states have implemented (or declined to implement) the base-erosion and anti-abuse tax (BEAT); and key considerations for taxpayers. Come hungry for knowledge, leave satiated.

US tax reform 2.0? Biden's international tax campaign proposals Jan 22, 2021

Show notes

Doug McHoney (PwC's US International Tax Services (ITS) Leader) and Nita Asher (ITS Partner in PwC's Washington National Tax Services office) cover some of President Biden's campaign tax proposals. Doug and Nita discuss: the current state of Congress and the White House; President Biden's campaign proposals to increase the corporate and global intangible low-taxed income (GILTI) tax rates, move the GILTI determination to a country-by-country basis, eliminate the exemption for qualified business asset investment (QBAI), amend the base erosion and anti-abuse (BEAT) tax, and implement a minimum tax on global book income; how President Biden's proposals interact with the OECD's ongoing base erosion and profit shifting (BEPS) project; the budget reconciliation process in the Senate and the likelihood of Congress enacting President Biden's proposals; what the regulatory landscape may look like under the Biden administration; and why taxpayers should engage with policymakers in a timely manner.

Supply and demand: key value chain considerations in 2021 Jan 06, 2021

Show notes

Doug McHoney (PwC's US International Tax Services (ITS) Leader) and Alex Voloshko (PwC's Value Chain Transformation Leader and ITS Partner in PwC's Washington National Tax Services office) discuss key considerations for value chains in 2021. Doug and Alex define 'value chain,' and how it includes the 'supply chain,' the 'demand chain,' and more; how value chains impact tax and transfer pricing; how supply chains were disrupted in 2020 and the outlook for supply chains in the new year; the plethora of factors that go into value and supply chain planning, including cost structure, access to qualified labor and production capabilities, regulatory considerations, and tax costs; the growing pressure on companies to 'near shore' and diversify their value chains; important trends for multinational entities, including increased scrutiny from tax authorities and increased transparency; the increasing importance of managing growth in a strategic manner; and recent trends concerning permanent establishments (PE).

WHT do you mean? A 95 year old German withholding tax on royalties Dec 10, 2020

Show notes

Doug McHoney (PwC's US International Tax Services (ITS) Leader) and Dr. Arne Schnitger (Head of PwC Germany's National Tax Office) discuss withholding taxation in Germany pursuant to Section 49 of Germany's tax code. Doug and Arne discuss: the background of Germany's Section 49 withholding tax and the circumstances under which Section 49 applies; the recent Circular issued by the German authorities discussing the application of Section 49; potential legal challenges to Section 49 taxation, including constitutionality and estoppel; the definition of 'German-registered IP' and 'EU-registered IP', and how tax advisers determine which royalties are subject to tax under Section 49; the interplay between withholding taxation and treaty jurisdictions; the importance of exemption certificates for prospective payments; what companies should do regarding historic liabilities; potential penalties for failure to file and/or remit tax as required by Section 49; and final pieces of advice for multinational taxpayers impacted by Section 49. [NOTE: The majority of this episode was recorded prior to the German Ministry of Finance's release of draft, proposed legislation (in German) regarding the effective repeal of Section 49(1) on an extraterritorial basis as it applies to IP registered in Germany. During the final five minutes of this podcast, Doug and Arne discuss key takeaways from this draft legislation.]

Extension cord: The story of tax extenders Nov 30, 2020

Show notes

Doug McHoney (PwC's US International Tax Services Leader) and Rohit Kumar (co-leader of PwC's Washington National Tax Services practice) discuss the past, present, and future of tax extenders. Doug and Rohit discuss: Rohit's experience as Domestic Policy Director and Deputy Chief of Staff for Senate Majority Leader Mitch McConnell; what tax extenders are and why they exist; the importance of the ten-year congressional budget window; the political calculus involved in determining whether certain tax provisions are temporary or permanent; the background and history of the controlled foreign corporation (CFC) look-through rule; potential alternatives to the tax extender regime; and the necessity for bipartisanship due to the upcoming 'fiscal cliff' at the end of 2025, caused by the potential expiration of a multitude of Tax Cuts and Jobs Act (TJCA) provisions.

Going for the gold: macroeconomics in 2021 and beyond Nov 13, 2020

Show notes

Doug McHoney (PwC's US International Tax Services (ITS) Leader) and Craig Stronberg (leader of Macro Capability for PwC Intelligence) discuss key macroeconomic considerations after November's elections. Doug and Craig discuss: the global implications of President-elect Biden's upcoming administration; the potential for tax reform in 2021 and beyond; the future of trade and diplomacy with China, including potential changes to supply chains, onshoring, and digital currencies; trends in 'protectionism' both inside and outside the US; key advice Craig has for executives and multinational corporations in light of the current geopolitical uncertainties; and Craig's experience working to protect the Olympic games.

Hard hat area: the OECD's Blueprints on Pillar One and Pillar Two Oct 30, 2020

Show notes

Doug McHoney (PwC's US International Tax Services (ITS) Leader) and Pat Brown (PwC's International Tax Policy Leader) discuss the OECD's recently released blueprints on Pillars One and Two. Doug and Pat discuss: Pat becoming the most frequent Cross-border Tax Talks guest (four) and the sizing for Pat's 'Five-Timers' jacket when he next appears (spoiler: 42 Long); the background of the OECD's base erosion and profit shifting (BEPS) project and the progression from 'BEPS 1.0' to 'BEPS 2.0'; the background of Pillar One, including a discussion of 'Amount A' and 'Amount B'; the background of Pillar Two, including a discussion of the 'undertaxed payments rule' and the 'income inclusion rule'; highlights from the OECD's Blueprint on Pillar One, including the concept of 'consumer-facing businesses'; highlights from the OECD's Blueprint on Pillar Two, including the OECD's 'jurisdictional-blending' approach and the 'income-inclusion' regime; and what the future looks like for BEPS 2.0 implementation in 2021 and beyond.

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