Cross-border Tax Talks

Pillar Two: how safe is the safe harbor?

Jan 24, 2024

Steve Kohart, PwC international tax partner and former OECD adviser, joins Doug McHoney to discuss the OECD's Pillar Two Administrative Guidance. They cover topics like safe harbor implementation, purchase price adjustments, hybrid arbitrage arrangements, CFC tax allocation, and potential additional guidance in 2024.

46:01

Episode guests

Steve Kohart

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Quick takeaways

OECD's Pillar Two guidance simplifies compliance with transitional safe harbors using country-by-country data.

Challenges may arise from varied jurisdictional implementation of OECD Pillar 2 rules leading to effective application concerns.

Deep dives

Overview of OECD Pillar 2 Administrative Guidance and CBCR Safe Harbors

The OECD has released administrative guidance focusing on transitional country-by-country safe harbors, aimed at simplifying compliance with Pillar 2 rules. The guidance emphasizes a simplified reporting framework allowing reliance on country-by-country data for safe harbors. The complexity of compliance increases, raising questions about the efficacy of safe harbors versus full global income calculations.

Navigating Challenges of Transitional Safe Harbor in Tax Compliance

02:50

Introduction

2min

Analyzing OECD's Guidance on Transitional Safe Harbors

4min

Navigating Tax Regulations and Purchase Price Adjustments

13min

Consolidated Revenue Threshold and Tax Implications

4min

Understanding Hybrid Arbitrage Arrangements and CFC Tax Allocation

18min

Navigating the Transitional Safe Harbor Rules and Anticipating OECD Guidance in 2024

2min

Navigating Challenges in Implementing CBCR Safe Harbor Rules Across Jurisdictions

4min

Doug McHoney (PwC’s International Tax Services Global Leader) is joined by Steve Kohart for our first podcast in PwC’s New York studio. Steve is a PwC international tax partner based in New York, and a former adviser for the OECD Center for Tax Policy and Administration. Doug and Steve discuss the OECD’s latest Pillar Two Administrative Guidance, which was published December 18, 2023 and primarily covers the transitional country by country Safe Harbor. More specifically, Doug and Steve address how jurisdictions will implement the guidance, purchase price accounting adjustments, consistent use of data, hybrid arbitrage arrangements, the allocation of CFC taxes, and whether the OECD will provide additional guidance in 2024.

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Cross-border Tax Talks

Pillar Two: how safe is the safe harbor?

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

Overview of OECD Pillar 2 Administrative Guidance and CBCR Safe Harbors

Challenges in Implementing OECD Pillar 2 Rules in Adopting Jurisdictions

Discussion on Hybrid Arbitrage Arrangements and Allocation of CFC Taxes

Key Considerations for Taxpayers Regarding Pillar 2 Compliance

Navigating Challenges of Transitional Safe Harbor in Tax Compliance

Remember Everything You Learn from Podcasts