Cross-border Tax Talks

Pillar Two: Policy, politics and interaction with Pillar One

Dec 8, 2023

Doug McHoney, PwC's International Tax Services Global Leader, and Will Morris, PwC's Global Tax Policy Leader, discuss the progress of Pillar Two. They explore the administration and adjudication process, potential FAQs and future guidance from the OECD, the recent EC guidance, retroactive OECD guidance implementation, and business participation in the process.

38:20

Episode guests

Will Morris

Doug McHoney

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Episode notes

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Quick takeaways

The Pillar 2 process faces challenges due to the complex regulations and potential interpretation clashes in court decisions.

Businesses need clarity on legislation, guidance, and forms for effective compliance with Pillar 2 implementation.

Deep dives

Overview of Pillar 2 and PwC's Pillar 2 Engine

PwC's Pillar 2 engine is a game changer for Pillar 2 modeling, provision, and compliance calculations. It is a centralized rules engine built by a team of Pillar 2 tax experts from around the globe. Pillar 2 is happening with countries like the EU, UK, and Canada implementing it. Implementation is set to begin in January 2024, but there are concerns about the availability of legislation, guidance, and forms. The UTPR (Under-Taxed Payment Rule) in 2025 is a challenge, and there is a need for clarity on the interpretation and incorporation of administrative guidance and FAQs.

Introduction

3min

Reviewing Podcast Duration and Discussing Pillar 2

3min

Implementation and Interpretation of OECD Pillar Two Rules

15min

Implications of the European Commission's Announcement on Market Transferable Tax Credits

10min

Policy risks for non-US-parented groups and business involvement in the Pillar 2 process

4min

Importance of Business Engagement in Global Tax Policy

3min

Doug McHoney (PwC’s International Tax Services Global Leader) is at PwC’s Global Tax Symposium in Rome, where he’s joined by Will Morris. Will is PwC’s Global Tax Policy Leader, and on Will’s last visit to the podcast, he covered FSR, the Foreign Subsidies Regulation. On this podcast, an exciting and familiar topic - Pillar Two! Doug and Will discuss generally how the Pillar Two process has been going. They wonder how tax authorities and courts will administer and adjudicate in their jurisdictions, and what will become of the potential FAQs and future administrative guidance from the OECD. They then discuss the recent EC guidance, and whether countries will be able to bring in the OECD guidance retroactively. Finally, Doug and Will touch on how business have participated thus far in the process.

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Cross-border Tax Talks

Pillar Two: Policy, politics and interaction with Pillar One

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

Overview of Pillar 2 and PwC's Pillar 2 Engine

Challenges and Concerns in Pillar 2 Implementation

Business Participation and Engagement in Pillar 2

Conclusion and Additional Topics on Tax and ESG Reporting

Remember Everything You Learn from Podcasts