Cross-border tax talks
Summary: PwC specialists share insights and perspectives on key issues impacting the ever-changing international tax landscape. Our podcasts aim to provide quick, easy and up-to-date international tax developments to help you stay current and competitive in today's challenging business environment. Listen to episodes at your convenience via your desktop computer or smart device.
Doug McHoney (PwC's US International Tax Services (ITS) Leader) and Ninee Dewar (a Partner in PwC's Washington National Tax Services (WNTS) ITS practice) discuss the recently-released Foreign Derived Intangible Income (FDII) final regulations under...
Doug McHoney (PwC's US International Tax Services (ITS) Leader) and Pam Olson (PwC's US Deputy Tax Leader and Washington National Tax Services (WNTS) Practice Leader) discuss Pam's storied career as she retires from PwC. Doug and Pam talk: life as a tax...
Doug McHoney (PwC's US International Tax Services (ITS) Leader) and Stephen Mosha (an ITS Partner and leader of PwC's Northeast Tax practice) have a candid conversation about Stephen's life as a Black tax professional. Doug and Stephen discuss:...
Doug McHoney (PwC's US International Tax Services (ITS) Leader) and Maarten Maaskant (an ITS Partner and ITS Desk Leader) discuss the EU's mandatory reporting rules (EU Council Directive 2018/822, also known as 'DAC6.') Doug and Maarten cover: the...
Doug McHoney (PwC's US International Tax Services Leader) and Tom Quinn (a Partner in PwC's International Tax Services practice specializing in Value Chain Transformation) analyze the US Tax Court's recently issued decision in Whirlpool v. Commissioner. Doug and Tom discuss: the facts and organizational structure; the basic structure of Mexican maquiladoras; the importance of Luxembourg's permanent establishment (PE) rules in Whirlpool; the intricacies of the Section 954(d) 'branch rules,' including a discussion on Foreign Base Company Sales Income (FBCSI) and how 'check-the-box' elections interplay with the branch rules; the judge's rationale in the Whirlpool opinion; the difficulties in classifying inter-company transactions as 'sales' or 'activities'; the importance of policy considerations - in addition to technical analysis - during tax planning; the importance of transfer pricing principles in Whirlpool, with a focus on the necessity of inter-company documentation; how the Whirlpool decision might have been interpreted post-TCJA; and final takeaways for taxpayers in light of the Whirlpool decision.
Doug McHoney (PwC's US International Tax Services Leader) and Neil Edwards (a Partner in PwC's ITS practice) analyze recently released guidance on the 'anti-hybrid rules' under Section 267A. Doug and Neil discuss: the general overview of the regulation package; how the anti-hybrid rules in the US compare to the OECD's recommendations in 'BEPS 1.0'; how the anti-hybrid rules in the US compare to the anti-hybrid rules in the UK and Australia; changes between the final anti-hybrid regulations and proposed anti-hybrid regulations, including the interest-free loan provision, imported mismatch rules, notional interest deduction (NID) rules, rules regarding deemed branch payments, the definition of a 'fiscally-transparent entity,' and the narrowing the 'interest' definition; and the proposed anti-conduit regulations under Section 881.
Doug McHoney (PwC's US International Tax Services Leader) and Mike DiFronzo (PwC's Washington National Tax Services ITS Leader) do a deep dive into the recently enacted CARES Act. Doug and Mike discuss: the general structure of the tax provisions included in the CARES Act; details of the five-year carryback for 2018, 2019, and/or 2020 Net Operating Losses (NOLs); how NOLs interact with Foreign-Derived Intangible Income (FDII), Global Intangible Low-Taxed Income (GILTI), Foreign Tax Credits (FTCs), and the Section 965 'toll charge'; how refund procedures used in the 2008 crisis may guide current and upcoming refund procedures; how the CARES Act amends the Section 163(j) interest expense limitation; why entities making NOL and/or Section 163(j) adjustments should model their changes due to the potential implication of the Base Erosion and Anti-abuse Tax (BEAT); and how the CARES Act amended Alternative Minimum Tax (AMT) acceleration and Qualified Improvement Property (QIP) bonus depreciation.
Doug McHoney (PwC's US International Tax Services Leader) and Pat Brown (PwC's International Tax Policy Leader) discuss the past, present, and future of US and global corporate taxation in 2020 and beyond. Doug and Pat discuss: issued and pending TCJA regulatory guidance, including anti-hybrid, Section 163(j), Foreign Derived Intangible Income (FDII), Global Intangible Low-Taxed Income (GILTI) high-tax exception, previously-taxed earning and profits (PTEP), and Foreign Tax Credit (FTC) regulations; Treasury's effort to have all TCJA guidance 'done' by October 2020, and what 'done' actually means; the interplay between OIRA, Treasury, and the White House; potential changes to the US corporate tax structure and rate after November's presidential election; the sustainability of the Section 250 deduction; the current state of the EU's Anti-Tax Avoidance Directive II (ATAD II); the global landscape of digital taxation; and continuing developments to the OECD's 'BEPS 2.0' initiative.
Doug McHoney (PwC's US International Tax Services Leader) and Mark Boyer (a Partner in PwC's Washington National Tax MA practice) discuss key MA and international tax considerations after the Tax Cuts and Jobs Act (TJCA). Doug and Mark discuss: life at the IRS before, during, and after the 1986 Tax Reform Act; top diligence concerns in MA transactions post-TCJA; how acquisitions unintentionally may subject companies to the Base Erosion and Anti-Abuse tax (BEAT); key structuring considerations post-TCJA, including the concept of a 'worldwide system of taxation' through BEAT, Foreign Derived Intangible Income (FDII), and global tax reform; the importance of modeling and data accuracy for tax and transaction planning; and the differences between strategic buyers and private equity.
Doug McHoney (PwC's US International Tax Services Leader) and Nils Cousin (International Tax Director in PwC's Washington National Tax Services practice) discuss the intricacies of income sourcing and the recently proposed Section 863(b) and 865 regulations. Among other topics they discuss: the background on sourcing rules and why these rules are so important; the general statutory framework for sales of personal property under Section 865; background on how Section 863(b) affects both 'inbound' and 'outbound' taxation; how the 2017 tax act amended Section 863(b)'s allocation rules; how treaties affect sourcing determinations; how the proposed regulations affect both US-based and foreign-based multinationals; and, finally, how and why taxpayers may elect to rely on the proposed regulations.
Doug McHoney (PwC's US International Tax Services Leader) and Matt Ryan (Leader of PwC UK's International Tax and Treasury Network) avoid the temptation of debating Megxit and dive quickly instead into Brexit. More specifically they cover: the importance of the monarchy to the UK's identity; a primer on the Brexit votes and the Prime Ministers in power during those votes; the treaty implications of Brexit; the importance of the ‘principal purpose test’; how Brexit will impact the new controlled foreign corporation (CFC), Permanent Establishment (PE), and dividends-received rules; how Brexit will impact global trade; and key considerations for companies in a post-Brexit world.
Doug McHoney (PwC's US International Tax Services Leader) and Tim Anson (International Tax Partner in PwC's Washington National Tax Services practice) discuss the recently issued final and proposed foreign tax credit (FTC) regulations. Doug and Tim discuss: the FTC's interplay with global intangible low-taxed income (GILTI); how 'branch IP' is treated in the final FTC regulations; how the final regulations treat expense allocation and apportionment at the CFC level; how the final regulations treat 'deemed paid' credits, including in foreign jurisdictions with different tax year-ends; how the final regulations interplay with Section 905(c) to create the potential for a multitude of amended returns; how the proposed FTC regulations treat research and experimentation apportionment; how the proposed regulations treat stewardship expenses; and how the proposed regulations provide specific rules for timing or base differences under Prop. Reg. sec. 1.861-20 (also known as 'dash 20.').
Doug McHoney (PwC's US International Tax Services Leader) and Roy Weathers (PwC's Vice Chair and US Tax Leader) 'co-develop' a podcast and discuss the dynamic nature of US and global tax reform, and how the tax practitioner's role continues to evolve during these transformative times. Doug and Roy cover: the role of technology and disruption in professional services organizations; how businesses can leverage 'citizen-led' approaches to technology; the infrastructure and budget required for 'enterprise-wide' technologies; the importance of scale in implementing technological tools; the challenges of encouraging and incentivizing adoption of various tools; how utilizing technology can free employees' time for added productivity and upskilling; the merging of law and technology, and the continued evolution of the soft and hard skills necessary for today's and tomorrow's practitioners.
Doug McHoney (PwC's US International Tax Services Leader) and Nita Asher (an International Tax Partner in PwC's Washington National Tax Services practice) discuss the background to, and recent guidance for the Base Erosion and Anti-abuse Tax (BEAT). Doug and Nita discuss Nita's work at the Joint Committee of Taxation during the formation and passage of the Tax Cuts and Jobs Act; the history and reasoning behind the BEAT; how the BEAT compares with the previously-proposed 'Border-Adjustment Tax,' or 'BAT'; how the recently-released final BEAT regulations treat GILTI, subpart F, and PFIC inclusions; how the recent final regulations treat 'netting'; how the recently proposed BEAT regulations permit taxpayers to voluntarily forego deductions and how they can retroactively apply this election; how the onshoring of intellectual property (IP) may affect taxpayers's BEAT computations; and how taxpayers may use distributions or other structuring decisions to mitigate BEAT implications from onshoring IP.
Doug McHoney (PwC's US International Tax Services Leader) and Will Morris (PwC's Deputy Global Tax Policy Leader) pass an interesting smell test on the way to discussing the 'Digitalization of the Economy Project,' which Will reluctantly allows us to refer to as 'BEPS 2.0.' In this episode Doug and Will cover: an overview of the OECD's 'Unified Approach' under Pillar One and how various countries feel about this proposal; the historical context of the OECD's 'inclusive framework'; the reasoning behind the 'significant economic presence' concept and 'fractional apportionment' method; the potential difficulties in reaching a consensus among the 135 signatories to the 'Unified Approach' by late 2020; an overview of the three-tier profit allocation mechanism ('Amount A,' 'Amount B,' and 'Amount C'); the difficulties in determining what a 'consumer facing' and/or 'highly digitalised' business' is under Pillar One; the similarities between US tax reform (specifically BEAT and GILTI) and the OECD's proposals; and the challenges in addressing double-taxation issues under the OECD's proposals. They wrap with some prognosticating of 'Digitalization of the Economy Project,' (BEPS 2.0).