Cross-border Tax Talks
August 20, 2021
A hundred year storm: BEPS 2.0 Update
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.
Timestamps:
- 2:30 - What is the OECD and what role do they play in developing tax policy?
- 6:00 - What is Pillar 1?
- 8:30 - How do these potential rules change the fundamental taxing precedent of the last 100 years?
- 9:00 - What is Pillar 2?
- 13:30 - Where are we in the OECD’s process of finalizing a proposal?
- 16:00 - When would the OECD proposals be implemented in various countries?
- 18:45 - What companies may be subject to Pillar 1 and what are the scoping challenges?
- 22:15 - How will the US be affected by these proposals and what are the necessary steps for implementing these proposals in the US?
- 26:45 - How will the OECD treat the FDII regime if it is not repealed?
- 29:40 - What are some of the challenges with Pillar 2 given some jurisdictions have a corporate income tax rate that is less than 15%?
- 34:15 - What are some of the timing related issues with accounting profits under Pillar 2?
- 35:45 - What challenges will the US face if it moves to a country by country GILTI regime?
- 39:45 - What happens if the US attempts to implement some of these proposals in Budget Reconciliation this year, but does not enact all of them?
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