Cross-border Tax Talks

September 13, 2024

No double dipping! US proposes new regulations

Doug McHoney (PwC’s International Tax Services Global Leader) is joined by returning guest Elizabeth Nelson, a Partner in PwC’s Washington National Tax Services Practice to discuss the recently proposed regulations that address dual consolidated loss (DCL) rules as well an entirely new tax regime regarding disregarded payment losses (DPLs). Together they dive into the background of the US DCL rules, effective dates, foreign use, intercompany transactions, stock inclusions, mirror legislation, a new anti-avoidance rule, and of course the application of the DCL rules to Pillar Two.

Timestamps:

1:30 – How did Elizabeth end up with both an accounting degree and a degree in French/Italian?
3:38 – What are the US dual consolidated loss rules?
4:55 – What is the concept of a ‘foreign use’ under the DCL rules?
7:54 – What do the new proposed rules say about intercompany transactions?
11:43 – What do the new proposed rules say about items arising from stock ownership?
14:34 – Should the Pillar Two tax regime be subject to the US DCL rules?
17:52 – How could the Pillar Two Transitional Safe Harbour potentially trigger a DCL?
22:23 – Why is “mirror legislation” important for the DCL analysis?
24:30 – What are the new disregarded payment loss (DPL) rules?
28:08 – What is the general anti-avoidance rule under both the DCL and DPL rules?
30:10 – Broadly speaking when are these rules going to be effective?
31:30 – Why should taxpayers comment on these proposed regulations?