Doug McHoney (PwC's International Tax Services Global Leader) is back at Westminster Studios in St. Louis, Missouri where he’s joined by Steve Kohart, International Tax Principal with PwC in New York City and former Advisor for the Center for Tax Policy and Administration for the OECD. Together they discuss the latest wave of OECD Pillar Two guidance including the SubjecttoTaxRule (STTR), UTPR safe harbour, qualified domestic minimum topup tax (QDMTT) safe harbour, marketable transferable tax credits (MTTCs), as well as the six key pieces of the substance base income exclusion (SBIE).

Timestamps:

3:05 In July 2023, the OECD released four documents. What were those documents?
5:30 What is the Subject To Tax Rule (STTR)?
8:55 Any thoughts on how the STTR might be incorporated with the US and some of the US treaties?
9:55 What do we now know about the GloBE Information Return?
15:20 Moving on to the Pillar Two administrative guidance, particularly the transitional UTPR safe harbour. What does ‘Ultimate Parent Entity (UPE) jurisdiction’ mean?
18:50 What did the guidance tell us about the QDMTT safe harbour?
20:45 One of the other interesting points in the QMDTT section of the guidance was that jurisdictions can choose the accounting standard for the base of the tax. What does that mean?
22:35: What did the guidance tell us about filing returns with a QDMTT?
23:40 There was specific language about taxpayers challenging to QDMTT for constitutional reasons or on the basis of investment treaties. How does that work?
24:50 What categories of taxes are excluded from the QDMTT?
25:50 What are marketable transferable tax credits?
28:35 What are some quick updates also contained in the guidance?
Currency conversion rules
Translating topup taxes
30:30 What are the six key pieces of the substance base income exclusion?
33:40 What are some items we should expect in future guidance?
35:20 How will jurisdictions incorporate future changes from the OECD into their domestic law?