Doug McHoney (PwC's International Tax Services Global Leader) is at PwC’s Global Financial Services Tax Leaders Meeting in Paris where he is joined by Will Morris, recently named PwC’s Global Tax Policy Leader. Together, they dive into the European Union’s Foreign Subsidies Regulation (FSR). They start with the origin story, how it intersects with State Aid, how taxpayers can be compliant, the necessity for collecting and saving data and information, consequences for failing to comply, and the challenges that taxpayers will face in the coming years, whether or not they currently do business in the European Union.

Timestamps:

1:05 Departing thoughts for Stef van Weeghel’s retirement
2:50 What is the EU’s Foreign Subsidies Regulation (FSR)?
5:15 What is State Aid?
7:10 What were the consequences under the State Aid rules versus the newer FSR rules?
9:45 What are the effective dates of the FSR? What are the prenotification/notification obligations?
17:10 There are a lot of deals that involve US entities. How will the EU view regimes like the IRA Green energy incentives or FDII in light of FSR?
24:10 Is there any distinction in the rules between tax credits?
25:00 If parties fail to notify or breach obligations, the commission can impose a fine of up to 10% of the worldwide group turnover of the previous financial year, among other consequences. Any insight into those, and how would these be enforced practically?
29:55 What types of groups will be impacted by the FSR?
31:20 What steps should taxpayers take to get ready?
37:20 Has the competition for foreign direct investment come to an end?