Cross-border Tax Talks

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.

Doug McHoney (PwC's US International Tax Services (ITS) Leader) and Roy Weathers (PwC's Vice Chair for Societal Engagement and Policy Solutions) discuss Roy's new role as CEO of CEO Action for Racial Equity. Doug and Roy cover: what CEO Action for Racial Equity is and its goals; the resources businesses like PwC and other companies have committed; how CEO Action for Racial Equity is effectuating policy change to advance racial equity; how data and technology help CEO Action for Racial Equity fellows ideate policies and ideas; how the fellows analyze and prioritize issues; specific issues that CEO Action for Racial Equity is targeting, such as telehealth; potential politicization over these types of issues and how data and common interests can help overcome the politicization; Roy's experience as a Black tax professional; and how everyone can keep the momentum going to implement, cause, and create change.

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.­

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.

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).­

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.

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.

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).

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.]

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.