Cross-border Tax Talks

Let's make a Deal: What’s behind Pillar Two?

Doug McHoney (PwC's International Tax Services Global Leader) welcomes back podcast regular Calum Dewar (Principal, International tax services) to discuss Pillar Two. This time Doug and Calum dive deep into the deals area, including the Pillar Two tax consequences of specific deal transactions and structures. They also talk about the recent release of both the South Korea and UK Pillar Two draft rules.

Timestamps:

• 1:10 - Any key takeaways from the UK and South Korean Pillar Two draft rules?
• 3:30 - Why is Pillar Two so important to consider in today’s deals environment?
• 5:55 - What are some examples of due diligence items to consider?
• 8:00 - Deals scenarios
  • 8:30 - US Corporation buying a US Target
  • 12:30 - US Corporation purchasing a US LLC as a disregarded entity
  • 16:30 - How do we know if a seller has been charged a debt?
  • 18:45 - How does purchasing an LLC compare to a straight-asset sale?
  • 22:25 - US Corporation purchasing a foreign company
  • 25:25 - What if a foreign subsidiary is purchasing a CFC?
  • 26:50 - More details regarding a US Corp buying a foreign disregarded entity
  • 28:50 - What about joint ventures?
• 35:30 - Structural aspects
  • 35:35 - What should we consider from a Pillar Two perspective on Intercompany lending?
  • 40:16 - What should taxpayers be aware of with regard to post-deal integration, specifically IP migration?
• 49:40 - What general advice does Calum have for investors, taxpayers, and advisors?

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