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Navigate the complexities of tax policy
Tax policy is a complex and rapidly evolving topic. We help our clients by playing a broader role, bringing together a range of stakeholders — including individuals, companies and non-business organisations — to solve governmental challenges together. Our contributions, aimed at decoding developments, include:
- helping our clients understand the impact of tax policy on their own businesses and plan for future tax policy developments
- helping stakeholders — including individuals, companies and non-business organisations — consider the purpose and impact of tax proposals
- facilitating tax policy discussions with and between governments and international institutions; public, private and non-governmental organisations; and wider society.
Our aim is to build trust among these groups so that together, we can design tax policies that will support economic growth, lead to more broadly shared prosperity, and meet the societal goals that tax policies set out to achieve.
Will Pillars 1 and 2 agreements affect your business?
Complex Pillar 1 and 2 documents full of uncertainties
The OECD recently released three Pillars 1 and 2 consultation documents as well as guidance on Pillar 2 safe harbours and penalty relief. Will Morris, PwC’s Deputy Global Tax Policy Leader, discusses the complexities and uncertainties presented in these documents and encourages companies to study the documents and submit comments.
Watch now
Consider the latest OECD Pillar 1 consultations
The OECD published an 11 July 2022 Pillar 1 Progress Report and other materials, inviting feedback on some new and adjusted Model Rules following reactions to the results of its series of building block consultations over the first half of the year. Read our Alerts and submissions as follows:
Pillar 1 - Administration and Tax Certainty
Alert Submission
Pillar 1 - Amount B
Alert Submission
Pillar 1 - DSTs and similar unilateral measures
Alert Submission
Pillar 1 - Progress Report
Alert Submission Meeting
Pillar 1 - Scope
Alert Submission
Pillar 1 - Extractive Exclusion
Alert Submission
Pillar 1 - Amount A Nexus and Revenue Sourcing
Alert Submission
Pillar 1 - Amount A Tax Base Determination
Alert Submission
Pillar 1 - Regulated Financial Services Exclusion
Alert Submission
Pillar 1 - Amount A Tax Certainty Framework
Alert Submission
Pillar 1 - Tax certainty for issues related to Amount A
Alert Submission
Consider the latest guidance and consultations on Pillar 2
Pillar 2 - Safe Harbours
Alert
Pillar 2 - Tax Certainty
Alert Submission
Pillar 2 - Implementation Framework
Alert Submission
Read our summary of the Pillar 2 Model Rules
The OECD published Model Rules for the Income Inclusion Rule (IIR) and Undertaxed Payments Rule (UTPR) - together known as the GloBE Rules - on 22 December 2021.
Read our alert
(See also our Alert on the EU Member States final adoption of a Directive on implementing those Rules).
Watch our webcast discussing the OECD digitalisation announcement
During our webcast, our panelists did a deep dive into the documents released by OECD, Inclusive Framework and G20 in the first half of October that set out the consensus and additional views on Pillar 1 and Pillar 2 in the project framework previously announced.
For more, you can also watch our perspective on China's position on the topic here.
Watch the replay
Framework countries agree on a new international tax framework
See how 140 countries have voted in reaching an agreement on Pillars 1 and 2, and the breadth of the consensus that has been announced 8 October 2021.
Read now
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How we can support you
Our global Tax policy network helps individuals and organisations navigate the complexity of tax policy-making. Here are some of the ways we support our clients:
Environmental, social and governance (ESG) approach
Tax is an environmental, social and governance (ESG) metric and a driver of sustainable growth. ESG is an umbrella term that covers the duties of businesses in relation to climate and society, and priorities such as purpose that go beyond value creation. Governments and supranational bodies also play a vital role in encouraging such thinking and the actions it can spur.
We can help:
- assess your control framework needs to facilitate good tax governance
- consider tax risk-management approaches to ensure material items are elevated to the board for consideration
- prepare strategies for reporting on tax as part of a wider business strategy
- determine businesses Total Tax Contribution and how that is perceived in a country-by-country analysis.
- design holistic approaches considering broader sustainability and governance criteria, preventing a silo mentality.
Learn more:
Base Erosion and Profit Shifting (BEPS) Action Plan
The recommendations of the BEPS Project, led by the Organisation for Economic Cooperation and Development (OECD), are at the root of much of the recent coordinated governmental activity on perceived international tax avoidance techniques. The recommendations published in October 2015 have been, and are being, supplemented with additional standards and guidance.
We can help you:
- understand the impact of BEPS Project standards or best practices and identify significant risk areas
- plan for variations between jurisdictions in terms of timing, methods and the extent of implementation
- follow remaining BEPS work, consultations and areas of potential focus — through our people, information services and insights.
Learn more:
DAC6: The new EU directive on reporting cross-border tax arrangements
The DAC6 directive has been in place since June 2018. It created new reporting obligations for affected intermediaries and taxpayers, depending on the nature of the arrangement and local law.
It applies to cross-border tax arrangements which meet one or more specified characteristics (hallmarks), and which concern either more than one EU country or an EU country and a non-EU country.
We can help you understand:
- whether DAC6 is relevant to your business
- what you need to do to stay compliant.
Learn more:
Environmental / green taxes and incentives
Tax policymakers, globally and domestically, are increasingly focusing on their contribution to environmental and green agendas. Energy taxation; schemes focused on reducing carbon emissions and neutralising the impact of foreign markets through border adjustment mechanisms; and credits and incentives for those making efficient investments go hand in hand with taxpayers own attempts to display environmental credentials to this stakeholders, whether they are investors, employees, regulators or others.
We can help:
- share economic analysis for use by or with policymakers
- monitor developments and alert stakeholders with impact assessments
- connect stakeholders such as by joining communities, roundtables or study groups (e.g., our carbon tax study group)
- prepare briefings for taxpayers to share with stakeholders
- prepare strategies for reporting on tax as part of a wider business strategy, including as part of an environmental, social and governance (ESG) approach.
Learn more:
Environmental and green taxes
European Comission releases a number of 'green taxation' measures
Global Indirect Tax Policy Group
We all work in an increasingly globalised economy, with constantly evolving technological innovation. The interplay among these trends is having a significant impact on businesses, on governments and ultimately on tax systems. The pace and volume of indirect tax changes are unprecedented and create considerable challenges for businesses. We can expect this to continue for some time.
The PwC Global Indirect Tax Policy Team is proactively involved in helping shape sound future indirect tax policies aimed at:
- eliminating trade barriers and creating a business-friendly environment
- encouraging growth and investment
- safeguarding tax revenues for governments
- improving legal certainty, efficiency and reducing costs for all stakeholders.
We help business and governments stay up-to-date with global indirect tax policy trends and developments. We also help them stay part of the conversation through the full policy cycle, from thought to implementation.
We act as bridge-builders between business and government, bringing together tax policy stakeholders, including technology experts. Together, we work to shape sound tax policies for a better tomorrow.
Learn more:
Impact of COVID-19 on tax policy
COVID-19 will have medium- and longer-term implications for governments, tax administrations and businesses and how they move from crisis response into the recovery phase. They will have to consider their own resilience and whether they need to make any structural changes.
We can help you:
- navigate the complexity, with a collection of insights to help you stay on top of the changes that impact your business
- adapt to maintain normal tax function responsibilities, even if your tax teams are working remotely. They have also had to consider the tax implications of current or potential changes in business models, supply chains and workforce mobility
- consider the impact of transfer pricing on cash liquidity — and use this analysis (alongside additional policy-makers' guidance) to help address COVID-19 impacts
- prepare for your tax contributions to be more closely scrutinised
- consider how tax policy will be affected by the COVID-19's impacts on elements of domestic and global tax systems.
Learn more:
Supranational organisations and other stakeholders
A number of supranational organisations are responsible for setting standards, providing guidance or committing to joint action on tax matters. Through these bodies, several territories' governments or tax authorities act together to determine international tax rules. Still other bodies contribute to the formulation of tax policy. Our Tax Policy Network regularly works with:
- the Organisation for Economic Cooperation and Development (OECD, including through Business at OECD, formerly BIAC), and related forums
- the Platform for Collaboration on Tax and/or its other members: the United Nations (UN), International Monetary Fund (IMF) and World Bank Group (WBG)
- the Group of 20 (G20, T20 and B20) as well as the G7/G8 major countries and G24 Intergovernmental Group on International Monetary Affairs and Development
- the European Union (EU), the Gulf Cooperation Council (GCC), the Association of Southeast Asian Nations (ASEAT) and other regional alliances
- the African Tax Administration Forum (ATAF), the Inter-American Center of Tax Administrations (CIAT), the Intra-European Organisation of Tax Administrations (IOTA) and other associations of tax administrations
- bodies of professional tax practitioners (and tax committees of wider trade bodies), NGOs and the public, speaking through various channels including the media.
Learn more:
Tax Policy Bulletins
Tax policy developments worldwide change at an increasingly fast pace. Drawing on our experience of tax policy issues, as well as our relationships with supranational organisations and other stakeholders, we’ve designed our Tax Policy Bulletins to support you with analysis and insight on policy changes around the world. We also add Tax Policy Alerts to give you a timely update on important developments.
Our Bulletins and Alerts will help you:
- stay on top of tax policy changes
- understand the impacts
- navigate the implications for your business.
Learn more:
Tax transparency
More people than ever have a vested interest in tax matters, including tax transparency, reporting and the tax gap, all of which are in greater focus for governments supranational groups, and NGOs. This means a long-term, transparent tax strategy is more relevant than ever for corporate taxpayers — on that involves clear board tasks and responsibilities, board oversight, effective tax-risk management and auditable tax reporting.
We can help you:
- design and implement a tax governance framework
- build trust and enhance your reputation
- consider your Total Tax Contribution
- promote tax transparency with country-by-country reporting
- benefit from the findings in PwC's annual Paying Taxes study
- put in place effective tax-rate benchmarking.
Learn more:
Total Tax Contribution Framework
Sustainable Tax
Corporate tax governance
Building Public Trust Through Tax Reporting
Tax in a globalised and digital economy
Globalisation and digitalisation are forcing policymakers around the globe to look at international tax frameworks, making changes to reflect the effects on their tax bases. These changes will apply to all large international businesses, not just highly digitalised businesses.
The G20/OECD Inclusive Framework has been reviewing the rules of the international corporate income tax system. Made up of nearly 140 countries operating on an ‘equal footing’, the project is expected to produce a consensus solution by the middle of 2021.
But enough countries are moving unilaterally — for either the short-term or longer — that a global consensus may not be reached. This could create distortions, uncertainty and complexity.
We can help you consider and understand the impact on:
- the effective tax rates your business is subject to
- supply chains and business structures
- compliance burdens
- deal capacity
- communications and reputation.
Learn more:
Taxation of the globalisation and digitalisation of the economy
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