Cross-border Tax Talks

Doug McHoney (PwC's US International Tax Services Co-Leader) is joined by Rebecca Lee (PwC ITS Washington National Tax Partner), who specializes in cross-border financial transactions. They discuss trends in cryptocurrency, including ‘operation hidden treasure,’ taxation of cryptocurrency transactions, US tax reform, El Salvador’s adoption of Bitcoin as legal tender, blockchain in the insurance industry, Bitcoin as an exchange traded fund (ETF), the digitalization of trust, updates on non fungible tokens (NFTs), the impact of decentralized finance (DeFi) on capital markets, and market implications around the world.

Doug McHoney (PwC's US International Tax Services Co-Leader) is in PwC's brand new studio in Washington, DC with Will Morris (PwC’s Deputy Global Tax Policy Leader). Will also was appointed Chair to the American Chamber of Commerce to the European Union and Chair to the Business Industry Advisory Committee to the OECD. Doug and Will discuss the journey thus far to Pillar One and Pillar Two. They touch on, among other things, the future impacts on US-based multinational companies, what has changed in recent months, digital services taxes & unilateral measures, details of Amount A under Pillar One, possible winners and losers, segmentation, scoping, the potential new instrument needed for implementation, details of Globe under Pillar Two, including the minimum rate, and of course, the timeline for implementing these changes.

Doug McHoney (PwC's US International Tax Services Co-Leader) is back in Westminster Studios with Nita Asher (PwC International Tax Services Partner), who served as legislative council at the Joint Committee on Taxation from 2017 to 2018. Doug and Nita pick up from the previous podcast with Sherry Grabow, and discuss the legislative climate; covering, among other topics: the legislative process for tax reform, how this iteration of reform differs from 2017, granting of regulatory authority, impact of proposed changes to Section 163(n), the wholesale changes proposed to BEAT; clarification to foreign personal holding company income; and new foreign tax carryforward rules.

Doug McHoney (PwC's US International Tax Services Co-Leader) is live at the Westminster Studios with Sherry Grabow (PwC's US International Tax Services Co-Leader) to discuss the international tax provisions in the recently released ‘Chairman’s Mark’ from the House Ways and Means Committee. Doug and Sherry cover, among other topics: Interest expense under new Section 163(n) and existing Section 163(j); changes to foreign derived intangible income (FDII), modifications to the global intangible low-taxed income (GILTI) regime, changes to the foreign tax credit rules; sweeping changes to subpart F income; a refreshed base erosion and anti-abuse tax (BEAT), and how taxpayers should prepare for potential changes to the tax rules.

Doug McHoney (PwC's US International Tax Services (ITS) Leader) is live at the Westminster Studios with Tom Patten (ITS Partner based in London) to discuss current and future tax considerations for US inbound companies. Doug and Tom chew on toasted ravioli and sandwich structures and then cover, among other topics: the impact of a Pillar 2 regime on US inbound companies; the potential for replacing the base erosion anti-abuse tax (BEAT) with the Stopping Harmful Inversions and Ending Low-tax Developments (SHIELD) provision, impending changes and proposals to interest expense, further limiting the ability of domestic corporations to expatriate; the effects of Brexit on US inbounds; and the potential for Pillar 1 to spurn treaty negotiation and ratification.

Doug McHoney (PwC's US International Tax Services Leader) is live at the Westminster Studios with Calum Dewar (Integrated Global Structuring Leader) to discuss the OECD’s Two Pillar solution to address the taxation of the digitalization of the economy. Doug and Calum cover, among other topics: Pillar 1 -  the reallocation of profits of large multinational companies; Pillar 2 - a global minimum tax rate of at least 15%; the momentum to find a consensus agreement; the design challenges the OECD still faces; how PIllar 2 proposals compare to the US GILTI regime; the potential for carve outs and segmentation; the implementation obstacles in the United States; and the importance of US multinationals to engage with policy makers.

Doug McHoney (PwC's US International Tax Services Leader) is live at the Westminster Studios with John McDonald (Quantitative Solutions & Technologies Managing Director) to discuss the role of technology in tax. Doug and John cover, among other topics: the cross section of computer science and tax; the economics of the professional services industry; how TCJA has made taxation much more complex;  the digital evolution of tax research; the power of definitions and testing to retain information; the usefulness of a graph data structure in tax; how centralized rules engines are superior to spreadsheets; the power of visualizations; the future of probability analysis in taxation, and the need for change management.

Doug McHoney (PwC's US International Tax Services (ITS) Leader) holds another post-vaccine session live at the Westminster Studios with Maarten Maaskant (PwC’s Foreign Tax Desk Leader) to discuss the latest happenings in the European Union (EU) from a legislative, administrative, and judicial perspective. Doug and Maarten cover, among other topics: both the Amazon and Engie state aid decisions in the EU General Court and their future implications; public country-by-country reporting; the European Commission (EC) proposal for a new instrument to address potential distortive effects of foreign subsidies; and the EC communication on business taxation for the 21st century.

Doug McHoney (PwC's US International Tax Services (ITS) Leader) sits down virtually with Dr. Alexis Crow (PwC's Global Leader of Geopolitical Investing Practice) to discuss the state of globalization, and more specifically, whether we have seen the end of globalization. Doug and Alexis cover how the landscape has shifted, and how we got to the current state; tensions within the technology sector, including a 'cold war' from a technology perspective; the globalization of the financial services sector; possible solutions for global cohesion; trends in tax and business from digital and environmental perspectives, and the increasing significance of Asia's role; climate policies and the 'greening' of financial flows; and the future of globalization, including what business leaders and investors should expect in a covid-recovering global economy.

Doug McHoney (PwC's US International Tax Services (ITS) Leader) holds the second post-vaccine session live at the Westminster Studios with Pat Brown (PwC WNTS Policy Co-leader) to discuss President Biden’s FY 22 Budget and the much anticipated and related explanations of such proposals, also known as the Treasury Green Book. Doug and Pat cover, among other proposals: increasing the US corporate income tax rate from 21% to 28%; increasing the global intangible low-taxed income (GILTI) tax rate to 21%; removing the qualified business asset investment (QBAI) provision; repealing the deduction for foreign derived intangible income (FDII); replacing the Base Erosion and Anti-Abuse Tax (BEAT) with a Stopping Harmful Inversions and Ending Low-tax Developments (SHIELD) provision; restricting deductions of excessive interest for disproportionate borrowing in the US; the status and likelihood of the OECD’s Pillars One and Two; and what companies should consider as potential tax legislation becomes more likely.

Doug McHoney (PwC's US International Tax Services (ITS) Leader) is joined in person at the Westminster Studios by David Parrish (PwC's ESG Tax Leader) to discuss the umbrella term environmental, social, & governance. Doug and David cover: the definition of ESG; its effects on a company's business and footprint; the driving forces of NGOs, investors, consumers, and governments;  the impacts it has on deals, capital investment, & tax; the alignment of ESG corporate strategies and goals; and the path forward from sustainability, transparency, and value chain perspectives.

Doug McHoney (PwC's US International Tax Services Leader) and David Cueller (PwC Mexico’s Tax and Legal Services Leader) discuss Mexican developments, including outsourcing reform and Mexico's current position in the OECD BEPS Project. Doug and David cover: the history of Mexico's outsourcing regime; recent disruptive changes made to various laws, including the Income Tax Law, VAT Law, and Labor Law; the specialized services exception; companies impacted by the recent law changes; the potential for penalties and tax fraud; relevant compliance concerns; and US tax considerations. They also discuss Mexico's BEPS-aligned legislation and the non-deductibility of payments to certain foreign entities.

Doug McHoney (PwC's US International Tax Services (ITS) Leader) and Chip Harter (Senior Policy Advisor in PwC's Washington National Tax Services Practice and former Deputy Assistant Secretary for International Tax Affairs in the Office of Tax Policy at the US Department of the Treasury) discuss Chip's experiences at Treasury and the latest outlook for tax policy.  Doug and Chip cover: Chip's involvement in the review and publication of IRS regulations and the role of Treasury officials in the regulations' process; Chip's involvement in the Tax Cuts and Jobs Act (TCJA); Chip's thoughts on the global intangible low-taxed income (GILTI) regime and his reaction to the interplay of the foreign tax credit regime and GILTI; the history and recent updates to the GILTI high-tax exception; and the prospects for a 'true' global minimum tax and the outlook for agreement on the OECD's base erosion and profit shifting (BEPS) project.

Doug McHoney (PwC's US International Tax Services (ITS) Leader) and Thomas Groenen (PwC's US ITS-Financial Services Leader) discuss the renewed interest in special purpose acquisition companies (SPACs). Doug and Thomas cover: how Thomas made his way from the UK to the US; Thomas's advice for individuals interested in moving to the United States to become tax professionals; what a SPAC is and how it generally functions; the history of SPACs—dating back to the British 'South Sea bubble' in the early 18th century; how SPACs compare to and interrelate with IPOs; how and why individuals and entities invest in SPACs; the tax implications for SPAC investors; considerations regarding the SPAC's jurisdiction; the SPAC lifecycle, from founding to de-SPACing; the importance of choosing the correct investment vehicle (both corporate v. pass-through and domestic v. foreign); how the passive foreign investment company (PFIC) regime interplays with foreign SPACs; and the possible future of SPACs.­

Doug McHoney (PwC's US International Tax Services (ITS) Leader) and Kathryn Kaminsky (PwC's Vice Chair - US Tax Leader) discuss Kathryn's background and her transition to PwC's US Tax Leader. Doug and Kathryn cover: Kathryn's experience as a woman in the audit and tax professions; how men can be advocates and allies for women; the differences between advocacy and mentorship; how to ensure career paths are not inhibited by the desire to have a family; Kathryn's experience as an auditor and leading practices for tax practitioners, auditors, and businesses; the challenges in communicating nuanced technical issues; challenges in transitioning from Audit to Tax and what we can learn from Kathryn's experiences over the past nine months as US Tax Leader; best practices for remote working; conversations Kathryn has been having with companies regarding potential upcoming domestic and global tax policy changes; how tax professionals can elevate issues to the C-suite; and why every business decision has a tax implication.