Episode 86: The middlegame – Pillar Two strategy for transfer pricing evolves

In this TP Talks episode, David Ernick (Transfer Pricing Principal in PwC’s US National Tax Services practice), Kartikeya Singh (Transfer Pricing Principal in PwC’s US National Tax Services practice), and Giorgia Maffini (Transfer Pricing and Tax Policy Director with PwC UK) continue the Pillar Two discussion, focusing on the  commentary published in March and how it has slightly reinterpreted the role of transfer pricing in Pillar Two; developments in Europe, including the UK stakeholder consultation and the ECOFIN progress regarding implementation of Pillar Two within the European Union; US developments; and the transfer pricing implications in instances of double taxation in the Pillar Two system.

Stay tuned for future TP Talks podcasts covering Pillar Two developments.

Timestamps

• 4:26 - What are the latest developments in Europe and why are these developments important for the implementation of Pillar 2?
• 9:09 - What are the latest developments in the US, particularly if other countries move forward with respect to Pillar Two?
• 12:56 - The commentary to the model rules was published in March and it contained some surprises in relation to the treatment of TP. How has the commentary impacted article 3.2.3, and has it changed the interpretation of the role of the arm’s-length principle and TP under the Pillar Two regime?
• 24:06 - The UK has carried out an extensive stakeholders consultation. Have they given further clarifications on how transfer pricing and TP adjustments should be working?
• 29:01 - What are the implications for transfer pricing if there are instances of double taxation in the Pillar 2 system?

Contacts: David Ernick, Giorgia Maffini, Kartikeya Singh