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December 06, 2019

BEPS 2.0: It's easy as (Amounts) A, B, C

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).

Duration: 43:42

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Doug McHoney

International Tax Services Co-Leader, PwC US

Geoff Jacobi

ITS, Knowledge Management Managing Director, PwC US

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