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Global tax accounting servicesNewsletter
Focusing on tax accounting issues affecting businesses today
January—March 2014
The Global Tax Accounting Services Newsletter is a quarterly publication from PwC’s Global Tax Accounting Services Group. It highlights issues that may be of interest to tax executives, finance directors and financial controllers.
In this first release for 2014 we provide an update on country-by-country reporting, discuss what auditor rotation proposals in the European Union mean for businesses with a presence in Europe, and provide an update on an accounting alternative for non-public entities and the most recent International Financial Reporting Standards (IFRS) Interpretation Committee’s guidance on some tax related matters.
We also draw your attention to some significant tax law and tax rate changes that occurred around the globe during the quarter ended 31 March 2014.
Finally, we highlight some similarities and differences for income tax accounting under IFRS and US Generally Accepted Accounting Principles (US GAAP), and provide guidance on when tax law changes should be accounted for under these frameworks.
If you would like to discuss any items in this newsletter, tax accounting issues affecting businesses today, or general tax accounting matters, please contact your local PwC team or the relevant Tax Accounting Services network member listed at the end of this document.
Readers should not rely on the information contained within this newsletter without seeking professional advice. For a thorough summary of developments, please consult with your local PwC team.
Ken KuykendallGlobal Tax Accounting Services Leader+1 (312) 298 [email protected]
Andrew WigginsGlobal Tax Accounting ServicesKnowledge Management Leader+44 (0) 121 232 2065 [email protected]
Introduction
Global tax accounting services newsletter
Accounting and reporting updates
u Country-by-country reporting
u Proposals for auditor rotation and restrictions on non-audit services in the European Union
u Accounting alternative for non-public entities in relation to goodwill
u The IFRS Interpretations Committee (IFRIC) update
Recent and upcoming major tax law changes
u Notable tax rate changes
u Other important tax law changes
Tax accounting refresher
u IFRS and US GAAP: similarities and differences
u When to account for tax law changes
Contacts and primary authors
u Global and regional tax accounting leaders
u Tax accounting leaders in major countries
u Primary authors
In this issue
Global tax accounting services newsletter
Country-by-country reportingOverviewAs we mentioned in the Q4 2013 newsletter, on 30 January 2014 the Organisation for Economic Cooperation and Development (OECD) published a discussion draft on transfer pricing documentation and a template for country-by-country reporting (CBCR).
The OECD received more than 1,300 pages of comments on the draft by the end of the consultation period on 23 February 2014, including a response from PwC.
The OECD carried out a private consultation discussing the CBCR template with businesses in March 2014. It also provided an update on amendments to be made to the template during its second Base Erosion and Profit Shifting (BEPS) public webcast on 2 April 2014.
The next step is a public consultation on 19 May 2014, with a final version of the CBCR template expected in June 2014 for endorsement by September 2014.
Once the OECD has published its final version of the rules it will be up to individual countries to decide on how and when they will implement them.
Issues highlighted in PwC’s responsePwC’s response to the OECD’s discussion draft highlighted the following main issues associated with the CBCR template:
• Significant compliance burden for multinationals as a result of the proposed CBCR requirements
• Considerable investment in systems and resources that may be required in order to compile the relevant information for the CBCR template accurately and appropriately.
• Confidentiality concerns in relation to information reported on the template.
• Concerns in relation to the consistency of each tax authority’s approach to, and interpretation of, the proposed CBCR requirements.
• Absence of a significant materiality threshold that would contribute to increased administrative burden.
This section offers insight into the most recent developments in accounting standards, financial reporting, and related matters, along with the tax accounting implications.
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Accounting and reporting updates
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Accounting and reporting updates
• Increased risk of disputes with tax authorities in relation to the reported data.
PwC’s response also made a number of recommendations to the OECD in relation to the above issues, including the following:
• Multinationals should be allowed flexibility in collecting and reporting data in the CBCR template (e.g., reporting income tax on a cash or accrual basis), provided the multinationals are consistent in the information they provide.
• Strict confidentiality requirements should be observed by tax authorities regarding the CBCR template. In particular, tax authorities should use treaty exchange of information or similar provisions to exchange CBCR data between countries.
• A materiality threshold should be introduced for small or low risk entities or transactions.
• Dispute resolution mechanisms, including arbitration provisions, should be improved.
For more information on the highlighted issues and our recommendations, please follow the link to PwC’s response.
Amendments to be made to the CBCR templateAs mentioned above, the OECD provided an update on amendments to be made to the template during its second Base Erosion and Profit Shifting (BEPS) public webcast on 2 April 2014. The amendments included the following:
• The CBCR template will not be part of the master file but a separate document.
• Financial data reporting will be required on a country basis rather than on a legal entity basis.
• Information on inter-company transactions (interest, royalties and other payments) will be removed from the template.
• Multinationals will need to provide a list of entities and permanent establishments in each country, including their relevant activity codes.
• Multinationals will have an option to disclose information based either on statutory or other financial reports, as long as the chosen approach is applied consistently across the group from year to year.
The methodology for filing/sharing of the CBCR template with tax authorities and the language of the template remain outstanding issues.
Practical challenges for multinationalsIt is clear that the proposed CBCR template will have a significant impact on any multinational business.
To assist multinationals in understanding practical implications of the CBCR template for their business we have recently issued a publication “Challenges multinationals may face in completing the OECD’s country-by-country reporting template”. In addition to issues highlighted above, such challenges could include the following:
• Availability of information (e.g., statutory accounts).
• Availability of sufficient centralised controls and processes over the statutory data.
• Availability of human resources
• Additional manual processes
• Increased risk of errors
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Accounting and reporting updates
• Potentially significant investments in processes (as well as in information systems mentioned above) to enable extraction of the relevant data.
• Availability of an appropriate risk management framework to allow for effective reconciliation of data reported in the template.
• Multiple reporting (i.e., additional reporting under other regimes that include some form of CBCR, for example, EU Capital Requirements Directive IV).
TakeawayMultinationals should pay close attention to CBCR developments, as they will have a significant impact on compliance, systems and processes, and human resources requirements, and it is highly likely that CBCR will be implemented in some jurisdictions the multinationals operate in.
Given the lead time necessary to prepare internal systems and processes for CBCR and the potentially substantial costs involved, it is critical that multinationals assess whether their current information and accounting systems will allow them to comply with the proposed CBCR requirements. Such an assessment should be undertaken now, even though it is possible the reporting may not be required immediately.
Multinationals should factor into their budgets the cost and time needed to prepare information and accounting systems and processes, and start formulating strategies to deal with additional compliance and audit requirements arising as a result of the proposed CBCR template.
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Public interest entityThe draft legislation defines public interest entities as all EU-domiciled entities with instruments listed on a regulated EU exchange, all banks and all insurance undertakings.
The public interest entity definition applies even where a company is part of a group listed outside Europe. European subsidiaries of US groups, for example, will be caught, if they have EU-listed securities, an EU banking licence, or undertake insurance activities. This could cause complexities if subsidiaries are forced to rotate auditors, even when the parent (listed outside Europe) is not required to rotate.
Mandatory auditor rotationUnder the proposals, all EU public interest entities will be required to rotate their auditors every ten years.
If EU member states choose to allow it, this period of mandatory rotation can be extended to 20 years if a competitive tender is performed at the ten year point, or 24 years in the case of a joint audit appointment.
Member states can also implement a shorter rotation period, without the extension options.
This may be an option for those member states that already have a rotation regime in place (e.g., Italy, which currently requires auditor rotation every nine years).
Transition arrangements will vary depending on the length of the audit appointment at the date the new rules come into force. If the auditor has been in place for 20 years or more, the first rotation must take place within six years. If the auditor has been in place for between 11 and 20 years, the first rotation must take place within nine years. Otherwise, the new regime will apply from two years of the legislation implementation date, so as at mid-2016 (i.e., the mandatory auditor rotation would be required within ten years from that date).
Restrictions on non-audit servicesThe new legislation will also restrict the non-audit services that can be provided by the auditor of a public interest entity. The restrictions will begin to apply within two years of the legislation coming into force—likely to be mid-2016.
In this area, the proposed legislation is complex and, in some cases, unclear. There are a number of options for member states and national supervisors to consider whereby they can make national application less onerous or more stringent.
Proposals for auditor rotation and restrictions on non-audit services in the European UnionOverviewAt the end of 2013 the European Commission, Parliament and Council reached agreement on draft legislation to reform the audit market within the European Union (EU). In April 2014 the European Parliament adopted the draft legislation in plenary session. The next steps are the formal approval by the EU Council and the publication of the new rules in the Official Journal of the EU, which is expected in mid-2014.
If approved, this legislation will mean that mandatory rotation of audit firms will be introduced for all public interest entities in the EU. There will also be additional restrictions on the non-audit services that audit firms can provide to audit clients. The restrictions take the form of a cap on the amount of non-audit fees that can be billed, and a ‘blacklist’ of prohibited services that the auditor cannot provide.
These changes are significant and may cause complexity for businesses. They are also the latest in a series of regulatory reforms impacting the audit marketplace.
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Firstly, fees received for non-audit services in any one year cannot exceed 70% of the average of the audit fees billed over the previous three years.
Secondly, there is a list of non-audit services that cannot be provided by the auditor of a public interest entity (or by its network firms) to that entity, or to its parent or subsidiaries within the EU. These are summarised in the table on the next page. Member states’ interpretation of this guidance will be very important, and could differ between them.
In addition to the above list, Member states have the option to add other non-audit services to the prohibited list if it is believed that the service presents a particular threat to independence.
Other non-audit services may be provided, as long as the audit committee of the public interest entity approves the provision of these services after assessing the potential threats to independence that could arise, and the safeguards that have been applied.
What happens next?Following formal approval from the EU Council the legislation will be written into the Official Journal of the EU, after which it comes into force within 20 days. This is expected to be mid-2014. At that point, national implementation decisions will begin.
As described above, there are a number of Member state options which will need to be decided at a national level. In addition, much of the text describing prohibited audit services is open to interpretation. We expect national supervisors will issue guidance suggesting how it should be implemented.
TakeawayEU businesses should consider the affect of both mandatory rotation and increased non-audit service restrictions may have on their business. In particular, businesses will need to be mindful of extra time and effort that may be required in managing the rotation process and bringing new auditors up to speed. This may be particularly relevant for companies experiencing difficulty or going through significant corporate transactions.
Public interest entities (defined above) that use their auditor for provision of tax advice and tax compliance services will need to be mindful of the new restrictions for non-audit services, and should start planning transition in advance. This is particularly important if such services are locked in for a few years under a contract. The same applies to tax technology that could be licensed to the entity by its auditor and for which transition should be carefully managed.
Audit committees will need to monitor and manage auditor rotations carefully in order to minimise the risks that disruption brings to audit quality.
The mandatory rotation requirements could be imposed ‘on top of’ the existing specific tendering requirements in some EU member states (e.g., in the United Kingdom). Companies and their auditors will need to work carefully through the transition arrangements of the different regimes to understand how they will fit together. This is a complex area that will need to be considered on a case-by-case basis.
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Prohibited non-audit service Comment
Tax advice and compliance Member states can allow these services if they are deemed to have no direct effect on, or are immaterial to, the audited financial statements. Services involving payroll tax and customs duties can never be permitted.
Services that involve playing any part in the management or decision-making process of the audited entity
This includes working capital and cash management, providing financial information, and creating supply chain efficiency as examples of such services.
Book-keeping and preparing accounting records and financial statements/payroll services
These restrictions will be similar to those already imposed by existing regulations.
Designing and implementing internal controls over financial information or systems
These services are all prohibited in the 12 months prior to an audit appointment, and throughout the audit appointment.
Valuation services Member states can allow these services if they are deemed to have no direct effect on, or are immaterial to, the audited financial statements.
Legal services/Internal audit/Human resource services Restrictions may be more extensive than those currently applied, depending on Member states’ interpretation of the legislation.
Services linked to financing and investment strategy and allocation, and investment strategy of the audited entity
The draft text confirms that providing assurance services, including the provision of comfort letters on prospectuses, will still be permitted. The introductory text to the proposed legislation also suggests that due diligence services will be permissible.
Promoting, dealing in or underwriting shares in the audited entity
This restriction will be similar to that already imposed by existing regulations.
Accounting and reporting updates
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Accounting and reporting updates
Accounting alternative for non-public entities in relation to goodwillOverviewOn 16 January 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-02, Accounting for Goodwill.
This standard provides non-public entities with an accounting alternative, which is intended to allow amortisation of goodwill on a straight-line basis and simplify the goodwill impairment model.
Accounting for goodwill under the alternativeAs mentioned above under the goodwill alternative, a non-public entity is able to amortise goodwill on a straight-line basis over a period of ten years, or a shorter period if the company demonstrates that another useful life is more appropriate.
Goodwill would be subject to impairment testing only upon the occurrence of a triggering event (typically, when circumstances change, such as the fair value of a company is below its carrying value). Upon adoption, a company will need to make a policy election regarding whether it will assess goodwill for impairment at an entity-wide level or a reporting unit level.
If a triggering event occurs, a non-public entity will continue to have the option to first assess qualitative factors to determine whether a quantitative impairment test is necessary. If a quantitative impairment test is required, a one-step impairment test would be performed. The amount of the potential impairment would be measured by calculating the difference between the carrying amount of the entity (or reporting unit, as applicable) and its fair value. A hypothetical purchase price allocation to isolate the change in goodwill (i.e., step two) would no longer be required.
If a non-public entity elects to apply the alternative accounting, it will be required to apply all aspects of the alternative (i.e., both amortisation and the simplified impairment test).
What are the main tax accounting implications of this accounting alternative?From a tax accounting perspective, adoption of the goodwill alternative may require a reassessment of income tax valuation allowances in certain circumstances.
Under US GAAP, a deferred tax liability (DTL) would often arise in relation to goodwill as a result of the tax amortisation. However, such DTL is usually not recognised as a source of income when assessing the realisation of deferred tax assets. This is because it will not reverse until some indefinite future period when the business is sold, or goodwill is impaired.
If the company that adopted the goodwill alternative has a DTL relating to the goodwill it may be able to now consider the DTL as a source of income when determining how much of a valuation allowance it needs. This is because the amortisation of goodwill for book purposes provides a degree of predictability as to the reversal of the DTL.
Effect of the accounting alternative on public companiesAs mentioned above, the new standard applies to non-public entities; however, it may also affect public companies.
If a public company is required to include a non-public entity’s financial statements in a regulatory filing, the non-public entity’s financial statements would need to be retrospectively adjusted to unwind any previously elected private company accounting alternatives.
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Additionally, a public company would be able to apply the private company standards in the standalone financial statements of a subsidiary, as long as the subsidiary, on its own, meets the definition of a non-public entity.
What’s next?The standard is effective for annual periods beginning after 15 December 2014, and interim periods within annual periods beginning after 15 December 2015.
Early adoption is permitted, which means that an eligible non-public entity could elect to apply the alternative in its 2013 financial statements, as long as those financial statements have not been made available for issuance prior to the release of the final standards.
The alternative would be applied on a prospective basis, with amortisation of existing goodwill commencing at the beginning of the period of adoption.
The FASB has separately added a project to its technical agenda to address the accounting for goodwill for public business entities and not-for-profit entities. Deliberations on this project are expected to commence in 2014.
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The IFRS Interpretations Committee (IFRIC) updateOverviewDuring the first quarter of 2014 the IFRIC considered the following tax related issues:
• Does IAS 12 Income Taxes (IAS 12) require that deferred tax assets (DTAs) are recognised to the extent of suitable taxable temporary differences?
• What are the implications of loss limitations when DTAs are recognised only to the extent of suitable taxable temporary differences?
• What is the threshold for the recognition of DTAs for uncertain tax positions?
• What are the deferred tax implications of assets held in a corporate wrapper, and does IAS 12 require that an entity account for both the inside and outside basis differences?
• What are the deferred tax implications of financial assets measured at fair value when the fair value is less than cost?
• What are the deferred tax implications, and does the initial recognition exception apply when businesses are transferred in an intra-group reorganisation?
Below we outline the IFRIC’s tentative conclusions on the above issues.
Does IAS 12 require that DTAs are recognised to the extent of suitable taxable temporary differences?In 2013 the IFRIC received a request for guidance on the recognition and measurement of DTAs when an entity is loss-making. It was asked to clarify whether IAS 12 requires that a DTA is recognised when there are suitable reversing taxable temporary differences regardless of an entity’s expectations of future tax losses.
During its January 2014 meeting, the IFRIC confirmed that a DTA should be recognised when there are suitable reversing taxable temporary differences, and that it is not necessary to consider future tax losses. This position is based on the following:
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• According to paragraphs 28 and 35 of IAS 12, a DTA is recognised to the extent of the taxable temporary differences of an appropriate type that reverse in an appropriate period.
• As the reversing taxable temporary differences enable the utilisation of the deductible temporary differences, they are sufficient to justify the recognition of DTAs.
• As a result, it is not necessary to consider future tax losses.
What are the implications of loss limitation when DTAs are recognised only to the extent of suitable taxable temporary differences?The IFRIC was asked to clarify how the guidance in IAS 12 is applied when tax laws limit the extent to which losses can be recovered against future profits.
The IFRIC confirmed that the DTAs should be adjusted accordingly to reflect the impact of tax loss limitations when DTAs are recognised only to the extent of taxable temporary differences.
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Accounting and reporting updates
What is the threshold for the recognition of DTAs for uncertain tax positions?The IFRIC considered a request for guidance on the recognition of a DTA in the following situation:
• Tax laws require an entity to make an immediate payment when a tax examination results in an additional charge; and
• The entity intends to appeal against the charge, because it expects, but is not certain, to recover some or all of that cash.
The IFRIC noted that paragraph 12 of IAS 12 provides sufficient guidance on the recognition of current tax assets and current tax liabilities. It states that current tax for current and prior periods shall, to the extent unpaid, be recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess shall be recognised as an asset.
The IFRIC confirmed that, in the above situation, an asset is recognised if the amount of cash paid (which is a certain amount) exceeds the amount of tax expected to be due (which is an uncertain amount).
What are the deferred tax implications of assets held in a corporate wrapper, and does IAS 12 require that an entity accounts for both the inside and outside basis differences?The IFRIC received a request to clarify tax accounting for a parent entity in the consolidated financial statements, in the situation when a subsidiary owns only one asset (the asset), and the parent expects to recover the carrying amount of the asset by selling the shares in the subsidiary (the shares).
Specifically, the IFRIC was asked to confirm whether the deferred tax should be calculated using the tax base of the asset (the inside basis) or the tax base of the shares (the outside basis).
The IFRIC acknowledged that, in practice, there are different views on this issue. The IFRIC’s view, however, is that IAS12’s requirements in this situation are clear - the parent has to recognise both the deferred tax related to the asset and to the shares, provided tax law treats the asset and the shares as two separate assets and no specific exceptions in IAS 12 apply in this situation.
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What are the deferred tax implications of financial assets measured at fair value when that fair value is less than cost?A few years ago the IFRIC received a request to clarify the accounting for DTAs in the following situation:
• An entity has deductible temporary differences relating to unrealised losses on debt instruments that are classified as available-for-sale financial assets and measured at fair value.
• The entity is not allowed to deduct unrealised losses for tax purposes.
• The entity has the ability and intention to hold the debt instruments until the unrealised loss reverses.
• There are insufficient taxable temporary differences and no other probable taxable profits against which the entity can utilise those deductible temporary differences.
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The IFRIC previously concluded that DTAs for unrealised losses on debt instruments are recognised, unless recovering the debt instrument by holding it until an unrealised losses reverses does not reduce future tax payments and instead only avoids higher tax losses. In effect, it may be difficult to recognise a DTA if a company has accumulated losses.
At its meeting in January 2014, the IFRIC analysed feedback from the consultation with IASB members and tentatively decided to confirm its recommended approach and to draft an amendment to IAS 12 that illustrates the application of the existing principles of IAS 12 in accounting for DTAs for unrealised losses on debt instruments measured at fair value.
Subject to reviewing the draft amendment to IAS 12, the IFRIC supported the IASB staff’s recommendation that such an amendment to IAS 12 should mainly be an illustrative example, with other amendments to IAS 12 made only if the clarification through an illustrative example is insufficient.
What are the deferred tax implications, and does the initial recognition exception apply when businesses are transferred in an intra-group reorganisation?The IFRIC received a request to clarify tax accounting under IAS 12 in the following situation:
• An entity recognised goodwill from the acquisition of a business.
• The entity subsequently recorded a deferred tax liability relating to goodwill.
• The entity set up a new wholly-owned subsidiary and transferred the above business, including the related (accounting) goodwill to this subsidiary. However, for tax purposes, the (tax) goodwill is retained by the entity and not transferred to the subsidiary.
• The entity prepares consolidated financial statements.
At its January 2014 meeting, the IFRIC confirmed that deferred tax balances should be determined separately for each entity in the consolidated group that files separate tax returns.
The IFRIC also confirmed that transferring the goodwill to the subsidiary would not meet the initial recognition exception described in paragraphs 15 and 24 of IAS 12 in the consolidated financial statements. As a result, deferred tax for temporary differences should be recognised in the consolidated financial statements (subject to meeting the recoverability criteria for recognising deferred tax assets in IAS 12).
As such, in the above situation, a DTA should be recognised in the consolidated financial statements to the extent of tax goodwill remaining in the parent entity. In addition, a deferred tax liability should be recognised as a result of the book goodwill transferred to the subsidiary.
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This section focuses on major changes in the tax law that may be of interest to multinational companies. It is intended to increase readers’ awareness of the main global tax law changes during the quarter, but does not offer a comprehensive list of tax law changes for all countries.
Country Prior rate New rate
Guatemala (CIT) 31% 28%/25%1
Israel 5.47%3/4.10%4 4.31%2/3.23%%3
Japan (ETR) 38.01% 35.65%4
Portugal (CIT) 25% 23%5
Portugal (CIT—state surcharge) 3%/5% 3%/5%/7%5
Notable enacted tax rate changes
1 The reduction in the tax rate was enacted on 1 January 2014 and is effective from 1 January 2014 (28%) and 1 January 2015 (25%). 2 The reduction of the tax rate on interest charged on a loan from a company to its supplier, employee or a controlling shareholder was enacted on 6 January 2014 and is effective from 1 January 2014.
3 The reduction of the tax rate on interest charged on intercompany loans was enacted on 6 January 2014 and is effective from 1 January 2014. 4 These changes were enacted on 5 December 2013 and are effective from 1 January 2014.
4 The termination of the Restoration Corporation Surtax resulting in the reduction of the effective tax rate (ETR) in Japan was enacted on 20 March 2014 with the effect from 1 April 2014 (the above ETR is for corporations with capital exceeding JPY100 million in Tokyo Metropolitan area).
5 These changes were enacted on 16 January 2014 (substantively enacted on 26 December 2013—see the Q4 2013 newsletter) and are effective from 1 January 2014. The rate of the state surcharge depends on the amount of taxable income (before deduction of tax losses) and is as follows:
• 3%—on EUR 1.5 million to EUR 7.5 million taxable income
• 5%—on EUR 7.5 million to EUR 35 million taxable income
• 7%—on taxable income above EUR 35 million
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Other important tax law changes
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Recent and upcoming major tax law changes
AustriaVarious Austrian tax proposals that we covered in the Q4 2013 newsletter were enacted during the first quarter of 2014. These included the following:
• Utilisation of foreign tax losses is now limited to 75% of Austrian taxable income.
• Formation of an Austrian tax group between Austrian companies and their foreign group companies is restricted to companies from EU/EEA and some treaty jurisdictions.
• Goodwill amortisation has been abolished.
• Deductibility of staff provisions is effectively increased via a reduction in the discount rate applicable in calculating staff provisions for income tax purposes.
• Deduction for individual employee salary is capped at EUR 500,000 per year.
• ‘Golden handshakes’ (generally, special severance payments made to employees in connection with an early retirement) paid to employees are no longer deductible (with very limited exceptions).
CanadaThe following measures were proposed in Canada during the first quarter of 2014 as part of the federal budget:
• A domestic anti-avoidance rule will be introduced to target ‘double tax treaty shopping.’
• An anti-avoidance rule will be introduced to target certain ‘back-to-back’ loan arrangements that aim to avoid application of withholding tax and thin capitalisation rules.
• The ‘regulated foreign financial institution exception’ in the foreign accrual property income (FAPI) regime will be amended to ensure the exception does not apply to non-financial institutions.
• It will be clarified that the anti-avoidance rule in the FAPI regime will apply to certain tax planning arrangements referred to as ‘insurance swaps.’
ChileDuring the first quarter of 2014, a significant tax reform was proposed in Chile. The reform’s primary stated objective is to increase tax revenues to finance public education.
In particular, the tax reform includes the following measures:
• The corporate income tax rate will increase from 20% to 25% over a four-year period, starting with 21% in 2014.
• Profits of an entity will be taxed to its shareholders as they accrue, regardless of whether they have been distributed. Any corporate tax paid by the entity will remain creditable against the final tax payable by the shareholders (i.e., the total income tax payable will remain 35%).
• Interest and expenses related to the acquisition of shares, and other securities will no longer be deductible for income tax purposes. Instead, the interest will be capitalised in the tax basis of the shares and other securities.
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Recent and upcoming major tax law changes
• New thin capitalisation rules will be introduced.
• General anti-avoidance rules aimed at tax-motivated transactions will be introduced.
• A one-time full depreciation deduction will be allowed for certain expenses incurred in asset acquisitions.
• Anti-deferral rules will be introduced for passive income earned by controlled foreign companies. Passive income would include dividends, interest, and royalties. A foreign tax credit will be allowed against the Chilean income tax imposed on such passive income.
In addition, the Chilean government enacted changes to the foreign tax credit rules that increased the maximum foreign tax credit amount available to taxpayers to 35% (if foreign income is derived from a treaty country) or 32% (in all other circumstances).
DenmarkThe following measures were enacted during the first quarter of 2014 in Denmark:
• Refund of value of tax losses arising from research and development activities, previously available starting with the 2015 assessment year, is now available starting with the 2014 assessment year.
• An exit charge arising on the transfer of assets to a foreign permanent establishment or foreign headquarters (domiciled in EU/EEA) can be payable over a period of up to seven years.
GreeceThe following measures were enacted during the first quarter of 2014 in Greece:
• Amendments were made to the new Income Tax Code in relation to the following:
– Greek source income
– Deductibility of interest and other expenses (in particular, expenses for scientific and technological research are now deductible at 130%)
– Withholding tax obligations (in particular, an exemption to withhold tax on payments of dividends, interest and royalties to a parent company has been broadened).
• Amendments were made to the new Code of Tax Procedures (that defines procedures of identification, assessment, and collection of state revenues as well as administrative penalties for non-compliance with legislation) to broaden the meaning of ‘acts of tax avoidance’, and amend the submission deadline for certain transfer pricing information.
JapanTax reform in Japan, as we reported in the Q4 2013 newsletter, was enacted in the first quarter of 2014. It included the following significant measures:
• The Restoration Corporation Surtax was terminated one year early (i.e., from 1 April 2014).
• An incentive (i.e., special depreciation or a tax credit) for investments in National Strategic Special Areas was introduced.
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Recent and upcoming major tax law changes
• The applicable period for the investment incentive for International Strategic Areas (to assist in rebuilding efforts from the Tohoku earthquake and tsunami and encourage foreign corporate investment into Japan) was extended.
• The employment promotion incentive was extended for another two years.
• A 50% deduction for certain entertainment expenses incurred by large corporations was allowed.
• Temporary surtax measures on undisclosed expenditures by corporate taxpayers were amended to become permanent.
• Temporary suspension of the tax loss carry-back was extended for another two years (small and medium enterprises excluded).
• Temporary suspension of taxation of retirement pension funds was extended for another three years.
• The Authorised OECD Approach (generally referred to as the functionally separate entity approach) for calculating profits attributed to a permanent establishment in Japan was adopted.
• Provision of services between certain unrelated parties was included in the scope of the transfer pricing regime.
• The inhabitants corporate tax rate was reduced.
• A new local corporate tax at a fixed rate of 4.4% was introduced. This tax is earmarked to a special government reserve for allocation to local governments in financial distress.
New ZealandFinancial arrangement rules in New Zealand were amended in relation to certain interest-free and reduced-interest loans. The amendments clarify that any positive adjustments that may be required in relation to these loans under IFRS are not taxable, and likewise any negative adjustments are not deductible.
This measure was enacted in the first quarter of 2014.
PanamaAs mentioned in the Q4 2013 newsletter the new worldwide income tax system enacted in Panama in December 2013 was repealed on 10 January 2014 effective retroactively.
PortugalVarious corporate tax reform proposals that were substantively enacted in the fourth quarter of 2013 (see the Q4 2013 newsletter) were enacted for US GAAP purposes in the first quarter of 2014.
QatarDuring the first quarter of 2014 a proposal was introduced in Qatar to exempt foreign investors in Qatar funds, invested in shares and other securities, from income tax in Qatar.
RussiaDuring the first quarter of 2014 the Russian Ministry of Finance proposed to introduce Controlled Foreign Company (CFC) rules in Russia. Under the proposed CFC rules, a Russian tax resident must pay tax in Russia on undistributed retained earnings of their controlled offshore entities. The list of the offshore jurisdictions subject to the CFC rules will be determined by the Ministry of Finance.
It is expected that these rules will be enacted on 1 January 2015.
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Recent and upcoming major tax law changes
SingaporeThe following measures were announced in Singapore as part of the 2014 Budget speech and were substantively enacted for IFRS purposes during the first quarter of 2014 (please note that for US GAAP purposes these measures were not enacted):
• The Productivity & Innovation Credit (PIC) scheme will be extended for three years (i.e., financial years ending 2015 to 2017). In addition, a new ‘PIC+’ scheme will be introduced for qualifying small-and medium-sized entities and will apply for the 2014 to 2017 financial years.
• The Research and Development (R&D) tax incentives due to expire in the 2014 financial year will be extended as follows:
– The additional 50% tax deduction for qualified R&D expenses will be extended for 10 years to the 2024 financial year.
– The 200% tax deduction available for R&D projects approved by the Singapore Economic Development Board will be extended until 31 March 2020.
• The ‘writing down’ allowance for the acquisition of prescribed intellectual property rights will be extended for five years to the 2019 financial year. The accelerated ‘writing down’ allowance available to media and digital entertainment companies will be extended for three years to the 2017 financial year.
• The Land Intensification Allowance scheme (to encourage manufactures to build on certain industrial land) will be extended to 30 June 2020. The scheme provides tax benefits with an initial allowance of 25% and an annual allowance of 5% of qualified capital expenditures. In addition to the industry sectors that had previously qualified for the scheme, it will be extended to the logistics sector and businesses carrying out qualifying activities on airport and port land.
• Basel III Additional Tier 1 instruments (other than shares) issued by Singapore-incorporated banks will be treated as debt for tax purposes.
South AfricaThe following measures were announced in South Africa as part of the 2014 Budget and were substantively enacted during the first quarter of 2014 (please note that for US GAAP purposes these measures were not enacted):
• Insurance premiums under policies that protect an employer against contingent liabilities that could arise on the death or disability of an employee will no longer be deductible, unless there is a risk that the employer incurs a loss as a result of this event.
• Hybrid instruments rules will be amended to provide a relief for refinancing transactions undertaken by mining exploration companies in certain circumstances.
• Restrictions applicable to interest deductibility in the context of certain reorganisations and acquisitions will be amended.
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Recent and upcoming major tax law changes
• The venture capital company regime (allowing for a deduction of amounts invested in certain qualifying investments) will be amended. In particular:
– Certain deductions will not be subject to a claw-back or recoupment.
– The total asset limit of a qualifying venture capital company will be increased from ZAR20 million to ZAR50 million (and from ZAR300 million to ZAR500 million in the case of junior mining companies).
– Capital gains tax on the disposal of qualifying investments will be eliminated.
– Types of business that a venture capital company can undertake in order to qualify for the regime will be extended.
• Net returns from foreign reinsurance activities will now be subject to tax in South Africa.
• Taxation of risk business undertaken by long-term insurers will be aligned with taxation of such business undertaken by short-term insurers.
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• Certain transfer pricing adjustments in relation to cross border loans may be treated as a dividend or a capital contribution, depending on the facts and circumstances.
• The high tax exemption available in relation to income attributable to a South African resident under the controlled foreign company rules will be extended in circumstances where a foreign company conducts business through a permanent establishment.
South KoreaThe following tax reform proposals announced in August 2013 were enacted during the first quarter of 2014 in South Korea:
• Withholding tax now applies to personal service income that is characterised as business profits under a tax treaty.
• Controlled foreign company (CFC) rules apply in some cases where passive income of a CFC constitutes less than 50% of its gross income.
• Rules allowing for deferral of tax on capital gain arising on the disposal of certain assets (e.g., land, buildings) were tightened to discourage their misapplication.
• Taxation of certain capital gains realised by a shareholder of a venture firm may be deferred.
• Tax rate (in addition to corporate income tax) applicable to capital gains derived by corporations on the disposal of houses or non-business purpose land was reduced from 30% to 10%.
• The minimum tax rate for large corporations for taxable income over KRW 100 billion was increased from 16% to 17%.
• The maximum research and development (R&D) tax credit available to large corporations was reduced from 6% to 4% of the amount of R&D expenses.
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Recent and upcoming major tax law changes
SpainDuring the first quarter of 2014 Spain enacted the following urgent measures in relation to refinancing and restructuring corporate debt:
• Debt conversions into shares will not be taxable to the primary creditor on a conversion after 1 January 2014.
• If a discount was offered on the debt purchase, such discount will be treated as taxable income.
• If a portion of the debt is forgiven, this amount will be included in taxable income over the period of time in proportion to the amount of financial expense recognised on the remaining debt.
These measures are effective from 1 January 2014.
TaiwanDuring the first quarter of 2014 the Ministry of Finance of Taiwan proposed the following measures:
• The ceiling of 10% surtax on undistributed retained earnings (which may be creditable against dividend withholding tax for non-resident shareholders) by 50% (i.e., effectively to 5%).
• Small- and medium-sized enterprises will be allowed an additional deduction for salary expenses up to 130% of the salaries paid to newly hired employees in the current year.
• Companies claiming R&D tax credit will be allowed to choose an alternative, under which they can claim an R&D tax credit based on 10% of current year R&D expenses. This credit will be credited against income tax payable during three years (including the current year).
United KingdomDuring the first quarter of 2014 it was proposed that the annual investment allowance (a 100% upfront tax relief for qualifying plant and machinery) in the United Kingdom is increased to GBP 500,000.
United StatesDuring the first quarter of 2014 the United States’ House Ways and Means Committee Chairman Dave Camp released a 976-page discussion draft ‘Tax Reform Act of 2014’, which would lower the corporate tax rate from 35% to 25%, reform US international tax rules and simplify the tax code.
A few days later the Obama Administration released its fiscal year 2015 budget proposals in the Treasury Green Book which also includes several tax proposals.
For more information on the above proposals please refer to the following PwC’s publications:
• Ways and Means Chairman Camp releases tax reform discussion draft
• Overview of Ways and Means Chairman Camp’s tax reform discussion draft
• 2014 Camp discussion draft changes previously proposed international tax regime
• Obama Administration FY 2015 budget focuses on tax reform, deficit reduction, and new initiatives
• Impact of recent legislative proposals on US inbound companies
Although tax reform is unlikely this year or next, we encourage multinationals to consider the potential impact of the above proposals on their business and tax accounting. We will keep you informed on further developments.
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Tax accounting refresher
In this section we highlight some similarities and differences for income tax accounting under International Financial Reporting Standards (IFRS) and US Generally Accepted Accounting Principles (US GAAP), and provide guidance on when tax law changes should be accounted for under these frameworks.
IFRS and US GAAP: similarities and differencesThe current income tax accounting frameworks under IFRS and US GAAP are both balance sheet liability models and share many fundamental principles At times, however, they are applied in different manners, and there are differences in the exceptions to the fundamental principles under each framework.
Since 2002, the US Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have been committed to the convergence of US GAAP and IFRS. Preparers and regulators have called for convergence to simplify financial reporting and to reduce the burden of compliance for listed companies, especially those with a stock-market listing in more than one jurisdiction (for an update on the status of the four active convergence projects see the Q4 2013 newsletter).
Meanwhile preparers should be aware of the current similarities and differences between IFRS and US GAAP, particularly in relation to the following items that are outlined in the table below:
• Tax basis
• Tax rate applied to current and deferred taxes
• Recognition of deferred tax assets
• Tax holidays
• Unrealised intra-group profits
• Uncertain tax positions
• Intraperiod allocations
For broader comparison of accounting for income tax under IFRS and US GAAP, please refer to our publication “IFRS and US GAAP: similarities and differences”
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Impact US GAAP IFRS
Tax basis
Under IFRS, a single asset or liability may have more than one tax basis, whereas there would be generally only one tax basis per asset or liability under US GAAP
Tax basis is based upon the relevant tax law. It is generally determined by the amount that is depreciable for tax purposes or deductible upon sale or liquidation of the asset or settlement of the liability.
As contrasted with IFRS, there is no rebuttable presumption of recovery through sale for investment property.
Tax basis is determined based on the expected manner of recovery. Assets and liabilities may have a dual manner of recovery (e.g., through use and through sale). In that case, the carrying amount of the asset or liability is bifurcated, resulting in more than a single temporary difference related to that item.
A rebuttable presumption exists that investment property measured at fair value will be recovered through sale.
Tax rate applied to current and deferred taxes
The impact on deferred and current taxes as a result of changes in tax laws impacting tax rates may be recognised earlier under IFRS.
US GAAP requires the use of enacted rates when calculating current and deferred taxes (for more information see discussion in section ‘When to account for tax changes’ below).
Under IFRS current and deferred taxes are calculated using enacted or substantively enacted rates (for more information see discussion in section ‘When to account for tax changes’ below).
Recognition of deferred tax assets
The frameworks take differing approaches to the presentation of deferred tax assets. It would be expected that net deferred tax assets recorded would be similar under both standards.
Deferred tax assets are recognised in full, but are then reduced by a valuation allowance if it is considered more likely than not that some portion of the deferred taxes will not be realised.
Deferred tax assets are recognised to the extent that it is probable (defined as ‘more likely than not’) that sufficient taxable profits will be available to utilise the deductible temporary difference or unused tax losses. Valuation allowances are not allowed to be recorded.
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Impact US GAAP IFRS
Tax holidays
Tax holidays may be treated differently under US GAAP and IFRS.
There is no official definition of a tax holiday for US GAAP purposes. However, there is guidance on the appropriate tax accounting for tax holidays. Specifically, the FASB considered whether a deferred tax asset should be established for the future tax savings on the premise that such savings are similar to a net operating loss (NOL) carryforward or other tax attribute.
Ultimately, the FASB decided to prohibit recognition of a deferred tax asset for future anticipated benefits for any tax holiday.
However, the effects on existing deferred income tax balances resulting from the initial qualification for a tax holiday or its extension/renewal should be recognised on the approval date or on the filing date if approval is not necessary. There may be exceptions, for instance, if government approval is considered perfunctory because the qualification requirements can clearly and objectively be assessed. In those cases, depending upon a company’s specific facts and circumstances, the effects of the holiday may be recorded prior to the final approval.
Additionally, differences often exist between the book and tax basis of assets and liabilities on balance sheet dates within the holiday period. If these differences are scheduled to reverse during the tax holiday, deferred taxes should be measured for the differences based on the conditions of the tax holiday (e.g., full or partial exemption). If the differences are scheduled to reverse after the tax holiday, deferred taxes should be provided at the enacted rate that is expected to be in effect after the tax holiday expires. The expiration of the holiday is similar to an enacted change in future tax rates, which must be recognised in the deferred tax computation. In some circumstances, tax planning actions to accelerate taxable income into the holiday period or to delay deductions until after the holiday may be considered.
Similar to US GAAP, IFRS provides no official definition of a tax holiday. In addition, there is no specific guidance under IFRS regarding tax holidays, but the treatment of holidays is typically not substantially different than under US GAAP. However, for temporary differences that reverse after the tax holiday period, deferred taxes should be measured at the enacted or ‘substantively enacted’ tax rates that are expected to apply after the tax holiday period.
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Unrealised intra-group profits
The frameworks require different approaches when current and deferred taxes on unrealised intragroup activity are considered.
For purposes of the consolidated financial statements, any tax impacts to the seller as a result of an intercompany sale are deferred and recognised upon a sale to a third-party or as the transferred property is amortised or depreciated.
In addition, the buyer is prohibited from recognising a deferred tax asset for any excess of tax basis over the carrying amount of the transferred assets in the consolidated financial statements.
Any tax impacts to the seller as a result of the intercompany transaction are recognised as incurred.
A temporary difference usually arises on consolidation as a result of retaining the pre-transaction carrying amount of the transferred asset while having its tax base according to the intragroup transaction price.
Deferred taxes resulting from the intra-group sale are recognised at the buyer’s tax rate.
Uncertain tax positions
Differences with respect to recognition unit of account, measurement, methodology, and the treatment of subsequent events may result in varying outcome under the two frameworks.
Uncertain tax positions are recognised and measured using a two-step process: (1) determine whether a benefit may be recognised, and (2) measure the amount of the benefit. Tax benefit from uncertain tax positions may be recognised only if it is more likely than not that the tax position is sustainable based on its technical merits.
Uncertain tax positions are evaluated at the individual tax position level.
The tax benefit is measured by using a cumulative probability model: the largest amount of tax benefit that is greater than 50% likely of being realised upon ultimate settlement.
Relevant developments affecting uncertain tax positions after the balance sheet date but before issuance of the financial statements (including the discovery of information that was not available as of the balance sheet date) would be considered a non-recognised subsequent event for which no effect would be recorded in the current-period financial statements.
Accounting for uncertain tax positions is not specifically addressed within IFRS. The tax consequences of events should follow the manner in which an entity expects the tax position to be resolved with the tax authorities at the balance sheet date.
Practice has developed such that uncertain tax positions may be evaluated at the level of the individual uncertainty or group of related uncertainties. Alternatively, they may be considered at the level of total tax liability to each tax authority.
Acceptable methods by which to measure tax positions include (1) the expected value/probability weighted average approach, and (2) the single best outcome/most likely outcome method. Use of the cumulative probability model required by US GAAP is not supported by IFRS.
Relevant developments affecting uncertain tax positions occurring after the balance sheet date but before issuance of the financial statements (including the discovery of information that was not available as of the balance sheet date) would be considered either an adjusting or non-adjusting event depending on whether the new information provides evidence of conditions that existed at the end of the reporting period.
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Impact US GAAP IFRS
Intraperiod allocations
Differences in subsequent changes to deferred taxes could result in less volatility in the statement of operations under IFRS.
Subsequent changes in deferred tax balances due to enacted tax rate and tax law changes are taken through the income statement regardless of whether the deferred tax was initially created through the income statement, through equity, or in acquisition accounting.
Changes in the amount of valuation allowance due to changes in assessment about realisation in a future period are generally taken through the income statement, with limited exceptions for certain equity-related items.
Subsequent changes in deferred tax balances are recognised in the income statement, except to the extent that the tax arises from a transaction or event that is recognised, in the same or a different period, either in other comprehensive income or directly in equity.
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When to account for tax law changesIssueRecently, we have seen a few examples when substantial changes in tax law were introduced, and shortly after that, announced to be repealed or reversed. Tax accounting for law changes in these situations can be particularly tricky.
For example, Panama on 30 December 2013 introduced a worldwide income tax system effective 31 December 2013. However, within a few days, following strong criticism of the new law, the government announced its intention to repeal the law retroactively to 31 December 2013. The repealing law was enacted on 10 January 2014, and the new system was deemed never to have applied for Panamanian tax purposes (see the Q4 2013 newsletter for more detail).
In another example, France, in August 2013, added Jersey, Bermuda, and British Virgin Islands to its list of non-cooperative states and territories, effective 1 January 2014. As a result, stringent and punitive tax measures were to apply to transactions between France and these countries from 1 January 2014.
In December 2013 (i.e., before the 1 January 2014 effective date), following successful resolution of information exchange issues by Jersey and Bermuda with France, the French Ministry of Economy and Finance announced that these countries would be removed from the non-cooperative list. However, the official decree to remove Jersey and Bermuda from the list was made only mid-January 2014. As a result, these countries were effectively on the non-cooperative list and subject to punitive tax measures during the first weeks of January 2014.
As mentioned above, tax accounting for law changes in the situations where tax law changes were enacted and subsequently announced to be repealed or reversed, can be particularly tricky. However, the main issue to consider in such situations is whether the law that introduced the relevant changes or the law that repealed previously enacted legislation is ‘enacted’ for US GAAP purposes or ’enacted’ or ‘substantively enacted’ for IFRS purposes.
Below we provide some guidance on when law is considered to be ‘enacted’ or ‘substantively enacted’.
US GAAP and IFRS guidanceLegislation is considered ‘enacted,’ as defined by US GAAP, when the country’s official ultimately signs it into law and the full legislative process is complete (i.e., the law cannot be overturned without additional legislation).
Companies are required to measure current and deferred income taxes based on the tax laws that are enacted as of the balance sheet date of the relevant reporting period.
With respect to deferred taxes and liabilities, that means measurement is based upon enacted law that is expected to apply when the temporary differences are expected to be realised or settled. As a result, even legislation having an effective date considerably in the future will typically cause an immediate financial reporting consequence.
Under IFRS companies are required to measure current and deferred income taxes based on the tax laws that are ‘enacted’ or ‘substantively enacted’ as of the balance sheet date of the relevant reporting period.
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The IASB has indicated that ‘substantive enactment’ is achieved when any future steps in the enactment process will not change the outcome. In this context, ‘will not’ does not mean ‘cannot’. Rather, it is necessary to assess whether the future steps in the enactment process are steps that historically have affected the outcome and whether there are other factors that indicate that those steps are substantive.
In some cases, enactment and substantive enactment will occur at the same point in a legislative process. If the respective dates differ, it is naturally possible that they will occur in different reporting periods. Awareness and identification of the relevant milestones in a jurisdiction’s legislative process are therefore essential to complying with the applicable financial accounting standard.
Application by jurisdictionAs each country has its own legislative process, the point at which a new law is considered enacted for US GAAP purposes or substantively enacted for IFRS purposes depends upon the particular jurisdiction process. It is therefore important to understand the process on a country-by-country (as well as on a state, provincial or other jurisdictional) basis.
For example, in some countries, the announcement of a change in tax law by the government may have the effect of actual enactment, even if certain formalities of the legislative process have yet to take place (e.g., announcement of tax measures in Singapore by the Minister of Finance during the annual budget speech—see ‘Recent and upcoming major tax law changes’ section of this newsletter). In such cases, the law may be considered substantively enacted under IFRS, even though it may not yet be considered enacted under US GAAP.
The below table summarises when law is ‘enacted’ and ‘substantively enacted’ in some major countries based on our understanding of each jurisdiction’s current laws, governing procedures and practices as of December 2013. For a broader list please refer to our publication “Global Tax Accounting Services. Around the world: When to account for tax law changes”.
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Jurisdiction Substantive enactment Enactment
Australia Generally upon passage through both houses of Parliament, unless in rare circumstances where there is no significant uncertainty about the outcome of a tax bill.
Upon royal assent of the bill.
Austria Upon signature of the president. Upon publication of the bill in the official gazette.
Belgium Upon acceptance by the Senate and transmittal to the Chamber of a draft bill. Upon ratification of the bill by the monarch.
Canada If there is a majority government—when detailed draft legislation has been tabled for first reading in Parliament.
If there is a minority government—once the proposals have passed the third reading in the House of Commons
Upon royal assent of the bill.
China For tax laws—upon passage by the National People’s Congress. For tax regulations—upon passage by the state council for tax regulations.
For tax laws—upon signature of the president and publication of the legislation immediately. For tax regulations—upon signature of the premier of the state council and publication immediately after.
France Upon adoption by the two assemblies and after validation by the Constitutional Council, or after expiration of the period to refer the law to the Constitutional Council.
The day following the publication in the official bulletin unless a different date is stated in the law.
Germany Upon passage by the Upper and Lower houses of the Parliament. Upon signature of the federal president.
India Upon passage by both houses of Parliament. Upon signature of the president and publication in the official gazette of India.
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Jurisdiction Substantive enactment Enactment
Italy Upon signature by the president. Upon signature by the president.
Japan Upon passage by the Diet. Upon passage by the Diet.
Mexico Upon signature of the president. The day following publication of the tax bill in the federal official gazette unless a different date is stated in the law.
Netherlands Upon approval by both houses of Parliament. The day after formal publication of the law in the state gazette.
Panama Upon approval by the National Assembly’s president and the president. Upon publication in the official legal gazette.
Russia Upon signature of the president. Upon publication of the law in the official media.
Singapore Upon announcement by the minister of finance during the annual budget speech. Upon presidential assent of the bill.
Switzerland Usually upon approval by the respective Parliament, i.e., federal, cantonal or communal (at the end of the 100-day referendum term), unless a referendum is held, in which case (at the federal level) after the referendum ballot.
Upon approval by the respective Parliament, i.e., federal, cantonal or communal (at the end of the 100-day referendum term)—unless a referendum is held, in which case (at the federal level) after the referendum ballot. In some cases enactment can also depend on fulfilment of certain economic conditions set in the law.
United Kingdom Upon passage of a resolution under the Provisional Collection of Taxes Act by the House of Commons or after the third reading in the House of Commons.
Upon royal assent of the bill.
United States—federal Upon signature of the president or upon a successful override of a presidential veto by both houses of Congress.
Upon signature of the president or upon a successful override of a presidential veto by both houses of Congress.
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For more information on the topics discussed in this newsletter or for other tax accounting questions, including how to obtain copies of the PwC publications referenced, contact your local PwC engagement team or your Tax Accounting Services network member listed here.
United States and Global
Ken Kuykendall Global, US & Americas Tax Accounting Services Leader +1 (312) 298 2546 [email protected]
EMEA
Janet Anderson EMEA Tax Accounting Services Leader +32 (2) 710 4323 [email protected]
Latin America
Rafael Garcia Latin America Tax Accounting Services Leader +1 (305) 375 6237 [email protected]
United Kingdom and Global
Andrew Wiggins Global Tax Accounting Services Knowledge Management Leader +44 (0) 121 232 2065 [email protected]
Asia Pacific
Terry SY Tam Asia Pacific Tax Accounting Services Leader +86 (21) 2323 1555 [email protected]
Contacts
Global and regional tax accounting leaders
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Contacts
Tax accounting leaders in major countriesCountry Name Telephone Email
Australia Ronen Vexler +61 (2) 8266 0320 [email protected]
Brazil Manuel Marinho +55 (11) 3674 3404 [email protected]
Canada Spence McDonnell +1 (416) 869 2328 [email protected]
China Terry SY Tam +86 (21) 2323 1555 [email protected]
France Thierry Morgant +33 (1) 56 57 49 88 [email protected]
Germany Heiko Schäfer +49 (69) 9585 6227 [email protected]
Japan Masanori Kato +81 (3) 5251 2536 [email protected]
United Kingdom Andrew Wiggins +44 (0) 121 232 2065 [email protected]
United States Ken Kuykendall +1 (312) 298 2546 [email protected]
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Primary authors
Global tax accounting services newsletter
Ken Kuykendall Global, US & Americas Tax Accounting Services Leader +1 (312) 298 2546 [email protected]
Steven Schaefer National Professional Services Group Partner +1 (973) 236 7064 [email protected]
Andrew Wiggins Global Tax Accounting Services Knowledge Management Leader +44 (0) 121 232 2065 [email protected]
Katya Umanskaya Global & US Tax Accounting Services Director +1 (312) 298 3013 [email protected]
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