Cross-border Tax Talks

Green Book Proposals: Codifying Pillar 2 in the US?

Doug McHoney (PwC's US International Tax Services Co-Leader) is joined by Pat Brown, PwC’s International Tax Policy Leader, making his sixth appearance on the podcast. Doug and Pat discuss the Biden Administration's fiscal year 2023 budget proposals as explained in the Green Book, how some of the proposals interact with the OECD’s Pillar Two Model Rules, and what taxpayers might expect.

Timestamps:

• 1:55 - After 30 years in the tax field, what is Pat’s perspective on the amount of change and disruption that we’re seeing for multinational corporations right now?
• 6:00 - A reminder for listeners: what is the Green Book?
• 8:03 - Before getting to specific proposals, what was the administration’s starting point with this Green Book?
• Specific proposals
  • 10:25 - Raising the corporate income tax rate
  • 14:15 - Pillar Two
    • 15:20 - What is the domestic minimum top-up tax?
    • 20:15 - How does the domestic minimum top-up tax differ from the US proposal for a book minimum tax?
    • 25:15 - Any highlights or lowlights on some of the descriptions related to the Undertaxed profits rules (UTPR) potential?
  • 31:00 - Provide tax credit for onshoring jobs to the US and remove tax deductions for shipping jobs overseas
  • 32:45 - Expand the definition of foreign business entity to include taxable units
  • 34:00 - Expand access to retroactive qualified electing fund (QEF) elections
  • 35:50 - Prevent basis shifting by related parties through partnerships
  • 37:00 - Conform definition of ‘control’ with corporate affiliation test
  • 39:00 - High-income individual minimum tax
• 41:30 -What is the likelihood of these proposals becoming law?

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