Cross-border Tax Talks

Wade Sutton (PwC’s Washington National Tax Services - International Tax Services Leader) is joined by Pat Brown, an ITS Partner and Co-Leader of PwC’s Washington National Tax Services practice. Pat previously served as the US Treasury’s Associate International Tax Counsel and has been a frequent guest on the podcast. Wade and Pat take a deeper dive into the future of Pillar Two, focusing on the G7’s ‘side-by-side' agreement.  They highlight the historical positions of previous US administrations, why  proposed Section 899  was dropped from OBBBA, US dissatisfaction with the lack of accommodations for the US GILTI regime and R&D tax credits, the OECD process and how countries could implement changes, and the potential for simplification including a potential permanent safe harbor. Finally, they look to the future and what may happen next. 

Doug McHoney (PwC’s International Tax Services Global Leader) is joined by Wade Sutton, a principal who leads the international tax team in PwC’s Washington National Tax Services practice. Doug and Wade discuss OB-3’s outbound impacts and the ripple effects across the system: CAMT interactions and credit ordering; Section 174 R&E expensing elections; Section 163(j) excluding CFC items and the financing/on-lending response; FDII’s shift to FDDEI, a permanent 14% rate, and 2026 expense-apportionment relief; GILTI’s rebrand to Net CFC tested income with a 14% effective rate and ‘directly allocable’ expense questions; inventory-sourcing relief; repeal of the Section 898 one-month deferral; permanent CFC look-through; the Section 958(b)(4) fix; a new Section 951(a)(2)(B) framework; selected technical corrections; and why granular modeling matters now more than ever.  

Doug McHoney (PwC’s International Tax Services Global Leader) is joined by Nita Asher, an international tax principal in PwC’s Washington National Tax Services practice focused on inbound multinationals, with prior government experience during the TCJA. Doug and Nita discuss the One Big Beautiful Bill Act (“OB3”) and its impact on inbounds, including permanent 100% bonus depreciation; new Section 168N for qualified production property; Section 163(j)’s EBITDA-based ATI; the reworked ‘FDDEI’ (formerly FDII) and its 14% rate with outbound IP limits; shifting IRA credit timelines and ‘foreign entity of concern’ issues; BEAT’s modest rate bump to 10.5% and unchanged credit treatment; the potential future of Section 899; and CAMT interactions. Throughout, they emphasize modeling to avoid BEAT/CAMT whipsaws while capturing OBBBA cash-flow benefits.

Raza Janjua, a Director at PwC’s NYC ITS practice and an authority on hybrid arbitrage, dives into the intricate world of international tax transformations. He dissects the origins of BEPS Action 2 and how it paved the way for complex hybrid arbitrage rules. The conversation uncovers real-life pitfalls, from preferred equity classifications to cross-border compliance challenges. Raza also speculates on future guidance from the G7 and its implications for U.S. tax laws, emphasizing the necessity for clearer frameworks in an evolving landscape.

In this enlightening discussion, Craig Stronberg, Senior Director of PwC Intelligence and former national security expert, shares insights on the shifting landscape of U.S. global policy and rising powers like BRICS. He dives into the complexities of protectionism, globalization debates, and how multinational firms navigate uncertainty through risk management and scenario planning. They also explore the surprising link between national happiness and trade success, emphasizing that prioritizing citizen well-being can unlock significant growth opportunities.

Calum Dewar and Mike Urse are distinguished international tax partners with extensive careers at PwC, specializing in cross-border tax. They discuss the allure of international tax, emphasizing the constant evolution and intellectual challenge it brings. Their fascinating career trajectories highlight mentorship’s role and the balance of technology and human relationships in their success. With humor, they reflect on transformative experiences, touching on technology's evolution from dictaphones to AI and offering invaluable advice for aspiring tax professionals.

Doug McHoney (PwC’s International Tax Services Global Leader) is joined by Pat Brown, an international tax partner and Co-Leader of PwC’s Washington National Tax Services practice and former US Treasury’s Associate International Tax Counsel. In part three of Doug’s three-part OBBBA discussion with Pat, they discuss the newly enacted OB3 reconciliation law, focusing on its permanent corporate and individual tax provisions, the recalibration of bonus depreciation, Section 174 expensing and Section 163(j); the Senate’s redesign of GILTI, FDII and BEAT; Inflation Reduction Act rollbacks; Treasury’s last-minute removal of Section 899; and the G7’s surprise accord intended to exempt US-parented groups from Pillar Two’s IIR and UTPR while elevating QDMTTs and compliance simplification. They map the procedural and legislative steps still needed, potential timing gaps, and why multinational groups must keep Pillar Two compliance front-of-mind.  

In this engaging discussion, Jesse Kavanaugh, an international tax partner at PwC Hong Kong and expert in Pillar Two regulations, shares his valuable insights. He highlights the uneven implementation of Pillar Two across various Asia-Pacific jurisdictions and addresses the pending legislation in Hong Kong. Jesse explores the complexities of compliance management, particularly the pitfalls in transitional safe harbors and the unique challenges faced by industries like shipping and real estate. His crucial advice? Start preparing for compliance now!

In this enlightening discussion, Pat Brown, an International Tax Partner and Co-Leader at PwC’s Washington National Tax Services, shares his expertise on the intricate details of the 'One Big Beautiful Bill.' He and Doug McHoney delve into the complexities surrounding the legislative maze, including the urgent July 4th deadline and the challenges of aligning House and Senate bills. They discuss crucial changes to GILTI, FDII, and the BEAT, revealing how these modifications will impact both domestic and international taxpayers.

Pat Brown, an International Tax Partner at PwC and former Deputy International Tax Counsel, joins Doug McHoney to discuss the 'One Big Beautiful Bill.' They dive into its legislative path in Congress and its implications for both domestic and international taxpayers. Key topics include temporary business provisions, the impact of Section 899 on digital services taxes, and the evolving treatment of research expenses. They also tackle the complexities of U.S. tax credits under global minimum tax rules and international negotiations surrounding the Undertaxed Profits Rule.