Cross-border Tax Talks

Pillar Two: UK update

Doug McHoney (PwC’s International Tax Services Global Leader) is joined by returning guest Matt Ryan, a PwC International Tax Partner based in London and leader of PwC UK’s International Tax and Treasury Network. Doug and Matt discuss a selective list of Pillar Two issues and topics related to the UK Finance Bill 2024-25. They provide an update on the latest Pillar Two happenings, including the transposition of the June 2024 OECD Administrative Guidance into UK law, the potential for retroactive provisions, UK compliance requirements, the potential for changes in light of the US election, and what could be next. 

Timestamps:

• 1:20 – Has Doug inspired Matt to watch more baseball? 
• 1:40 – What is the status of Pillar Two in the UK and how did we get here? 
• 2:30 – Will the UK repeal Pillar Two now that President Trump has been elected? 
• 5:00 – What are the UK rules for taxpayers registering for Pillar Two? 
• 7:30 - What are the other Pillar Two compliance requirements in the UK? 
• 8:40 – How does the UK legislative process and procedure work and how does it account for retroactivity?  
• 11:10 – Can future OECD administrative guidance be introduced retroactively in the UK? 
• 13:20 – What is the status of the undertaxed profits rule in the UK? 
• 15:10 – How does the UK determine that another country’s Pillar Two regime is qualified?  
• 16:50 – What is the status of the transitional CbCR safe harbour and anti-arbitrage rules? 
• 18:30 – Tell us more about the specific rules related to Purchase Price Accounting. 
• 19:45 – What does the UK Finance Bill say about Cross border allocation of deferred taxes? 
• 21:15 – How is the UK tracking deferred tax liabilities (DTL) recapture?  
• 22:40 – What does the UK legislation say about allocation of profits of flow through entities? 
• 23:20 – What does the UK legislation say about the allocation of domestic top-up tax liabilities? 
• 24:05 - What does the UK legislation say about GloBE reorganization rules? 
• 25:45 What does the UK legislation say about prior year adjustments in respect to pre-GloBE periods?  
• 26:15 – What are the changes to the definition of flow through entities? 
• 27:20 – How is the UK addressing the redundancy Pillar Two has caused with the offshore receipts in respect to intellectual property (ORIP) rules?  
• 28:30 – What is the latest on the UK introducing Pillar One and removing the digital services taxes? 
• 29:30 - What is the next for the UK and Pillar Two?

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