Cross-border Tax Talks

Doug McHoney (PwC’s International Tax Services Global Leader) is joined by Jenny Chong, Shanghai-based International Tax Partner and PwC’s Asia-Pacific International Tax Services Leader. Doug and Jenny discuss the structure and enforcement of China’s international tax regime, including corporate tax rates, incentives, CFC rules, and foreign tax credits. They examine the complexities of indirect stock transfer rules, audit trends, and beneficial ownership requirements. The conversation turns to Pillar Two, where Jenny outlines how Chinese multinationals are preparing despite a lack of formal adoption. They also explore the implications of potential termination of the US-China tax treaty and the resurgence of tariffs. Jenny shares how Chinese companies are adapting to compliance burdens and regulatory uncertainty amidst global tax and trade tensions. 

Doug McHoney chats with Leo Johnson, a lecturer at Oxford and co-founder of Sustainable Finance, known for his insights on megatrends. They delve into the psychological hurdles tax professionals face during crises, like climate change and economic stress. Leo introduces behavioral personas such as catalysts and silent rebels and discusses strategies to overcome resistance to change. Together, they emphasize the importance of purpose, autonomy, and collaboration in fostering high-performing teams while addressing burnout and cultivating meaningful work.

Itai Grinberg, a Georgetown University law faculty member and former US Treasury Deputy Assistant Secretary, shares insights on the global corporate minimum tax initiative. He reveals the behind-the-scenes dynamics of Pillar Two, discussing the impact of the Biden administration's early support and the controversial Build Back Better legislation. Grinberg also addresses international tensions like Brexit and US-China relations, while reflecting on future cooperation challenges in multinational tax policy. His unique perspective highlights the intricate balance between global negotiations and domestic concerns.

Doug McHoney (PwC’s International Tax Services Global Leader) is joined by Arne Schnitger, a Berlin-based International Tax Partner at PwC Germany and co-host of the German-language tax podcast “Frisch Serviert.” Arne previously served in the German Ministry of Finance and brings deep insight into both domestic and cross-border policy developments. Doug and Arne discuss Germany’s evolving corporate tax landscape, including potential rate reductions, simplification initiatives, and the implications of recent coalition negotiations. They dive into Germany’s controlled foreign corporation (CFC) regime, explore the mechanics of the constitutional ‘German debt brake,’ and unpack recent developments surrounding Pillar Two. The conversation highlights the intersection of German and US tax policy, the ongoing tension between multilateralism and unilateral measures, and the administrative and technical challenges multinationals face under the global minimum tax framework. They also examine prospects for EU-level simplification and the future of long-standing anti-avoidance measures in light of Pillar Two implementation. 

Tom Patten, a London-based US International Tax Partner at PwC, dives into the complex and often overlooked Sections 891 and 899 of the U.S. tax code. He discusses the upcoming executive order that aims to address discriminatory foreign taxes and its potential repercussions for non-US citizens. The conversation shifts to proposed changes to the BEAT rules, focusing on how these retaliatory measures could affect multinational corporations. With insights into navigating this evolving landscape, Patten provides essential advice for companies facing uncertain tax regulations.

Doug McHoney (PwC’s International Tax Services Global Leader) is joined by Dr. Romero Tavares, PwC Brazil’s International Tax Leader and a professor of international tax law in São Paulo. Doug and Romero discuss the increasing intersection between Brazil’s international tax policy and global trade dynamics, including the effects of recent US executive orders. They cover Brazil’s high-tax corporate environment, its historically aggressive CFC-like full inclusion regime, and the country’s rapid adoption of a qualified domestic minimum top-up tax (QDMTT). The conversation explores the political and policy rationale behind these moves, the anticipated redesign of Brazil’s CFC regime, and the operational challenges multinationals face with the new OECD-aligned transfer pricing rules. Romero also breaks down Brazil’s massive indirect tax reform and the country’s potential shift to more internationally-aligned tax norms, while questioning the long-term viability of the undertaxed profits rule (UTPR) and Pillar Two’s durability under changing geopolitical winds. 

Dr. Alexis Crow, Partner and Chief Economist at PwC US and former London School of Economics instructor, joins Doug McHoney for an insightful discussion. They analyze the impact of recent tariffs on global trade and the strains on U.S. consumers and businesses amid rising inflation. The conversation explores China’s economic resilience and India's manufacturing growth, alongside shifts in Europe and Latin America. They emphasize how multinationals should prepare for changes in tax policy and the broader economic landscape.

Doug McHoney (PwC’s International Tax Services Global Leader) is joined by Kristin Bohl, a Partner in PwC’s Customs and International Trade Practice. Kristin previously served as a judicial law clerk at the U.S. Court of International Trade. Doug and Kristin discuss the rapidly evolving trade and tariff landscape, focusing on the recent executive orders imposing new tariffs on Canada, Mexico, and China under the ‘America First’ trade policy. They break down the impact of tariffs on industries such as automotive, pharmaceuticals, retail, and technology, and cover strategies that businesses can deploy to mitigate costs. Key topics include the authority of the US President to impose tariffs, the role of trade deficits in tariff policy, and the use of tariffs as a foreign policy tool. They also explore potential retaliatory measures from US trading partners, the impact on global supply chains, and short to long-term strategies for businesses to adapt to the new tariff regime. 

Pat Brown, International Tax Partner at PwC and former VP of Tax at General Electric, joins Doug McHoney to discuss the evolving landscape of U.S. corporate tax policy. They dive into the implications of recent regulations, including disregarded payment loss rules and cloud sourcing. With a new administration, they assess the fate of these rules and the ticking time bomb of expiring provisions from the 2017 Tax Cuts and Jobs Act. The conversation also touches on international tax challenges and the U.S. response to OECD proposals, providing valuable insights for businesses navigating the future.

Doug McHoney (PwC’s International Tax Services Global Leader) is joined by Steve Kohart, an International Tax Principal in PwC’s New York City office and former advisor to the OECD’s Center for Tax Policy and Administration. Doug and Steve discuss the OECD’s latest administrative guidance on Pillar Two, covering key changes to transition rules, deferred tax asset adjustments, tax credits, and compliance burdens for multinational corporations. They dive into the OECD’s focus on Bermuda and Switzerland, new anti-abuse measures, implications of the Qualified Domestic Minimum Top-up Tax (QDMTT), and the complexities of the new Globe Information Return (GIR). The conversation also explores the political and procedural challenges in implementing additional guidance, particularly in light of the new US administration’s stance on Pillar Two.