Cross-border Tax Talks

Pascal Saint-Amans: The Pillar Two Origin Story

Doug McHoney (PwC's US International Tax Services Global Leader) records from PwC’s 2023 International Tax Conference, where he is joined by Pascal Saint-Amans, former Director of the OECD's Centre for Tax Policy and Administration and current partner with Brunswick, a strategic advisory firm. Doug and Pascal dive directly into the BEPS Project with an overview of the Pillar Two origin story, the challenges and successes of the project, harmful tax practices and the ways the OECD is trying to change tax systems, the natural complexity of tax, the future of tax incentives, compliance requirements, the private sector’s role in the policy process and much more.

Timestamps:

• 1:20 - What is the origin story of the income inclusion rule (IIR) and the undertax profits rule (UTPR)?
• 6:15 - What does Pascal say to critics of the UTPR, particularly how this type of tax will fit into the global treaty network?
• 7:30 - As Pascal looks back at the process, what is his perspective on what went well?
• 10:30 - What didn’t go well?
• 12:30 - Does the BEPS project really make the system more fair? Do we expect countries to change previously implemented incentive regimes?
• 15:15 - As we think about the development of these Pillar Two rules and the 100+ countries that signed on to the agreement, a common question is whether the qualified domestic minimum top-up tax (QDMTT) is inevitable?
• 18:55 - One of the challenges acknowledged by the OECD will be jurisdictions implementing differing rules. How does Pascal see these practical issues playing out?
• 23:05 - We are still a ways away from Pillar Two filings. Is it Pascal’s view that there will be one common form?
• 24:40 - On the US side, is Pascal surprised that the US did not enact county-by-country GILTI? What is Pascal’s perspective on the failure of Build Back Better and Treasury’s commitment to Pillar Two?
• 28:00 - How is the US going to react as digital taxes begin to pick back up and various countries begin enacting a UTPR and digital taxes?
• 31:00 - What value has the private sector provided to this process? Any advice to taxpayers who want to be a part of the process?
• 33:45 - What is Pascal’s response to critics that he is leveraging his experience with the OECD, now that he is in private practice?

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