Talking Tax

A global minimum tax deal that exempts American companies from key provisions is a better outcome for European business than the alternative of US retaliatory taxes, the co-chair of the OECD’s business committee said.

The package agreed to this month by more than 145 countries at the Organization for Economic Cooperation and Development headed off a threat of steep US taxes on foreign companies if global concessions weren’t made.

In this episode of Talking Tax, Christian Kaeser, global head of tax at Siemens AG, told Bloomberg Tax reporter Ryan Hogg that some of his European counterparts regarded the deal as “lopsided” but welcomed new permanent safe harbors that were created with input from Business at OECD, known as BIAC. Kaeser is co-chair of BIAC’s tax committee.

“I’m pretty happy with the outcome,” he said.

Competitive disparities created by the deal can be remedied by simplification of the EU’s own rules, including scrapping of the bloc’s controlled foreign companies anti-tax avoidance regime, he said.

As for Pillar One, the other main part of a 2021 OECD-led tax agreement, Kaeser saw little hope. Further talks on the pillar, which would reallocate taxing rights to countries where big companies make their profits, have stalled for years.

It “should be called Pillar Zed, zed for zombie,” he said.

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Republicans on Capitol Hill are keenly watching how other countries implement a long-sought OECD agreement that exempts US companies from parts of the global minimum tax framework.

Rep. Ron Estes (R-Kan.), a member of the tax-writing House Ways and Means Committee, hasn't ruled out resurrecting legislation imposing retaliatory taxes on firms from nations that slow-walk codifying the deal.

The deal was reached earlier this month after the Trump administration demanded a carve-out for American companies and for the US tax system to work alongside the global minimum tax framework without interference.

Estes sat down with Bloomberg Tax Congress reporter Zach C. Cohen in his Capitol Hill office to talk about the importance of the agreement to American businesses and how he will "trust, but verify" other countries' tax code changes, especially if they pursue the same kind of exemption Washington just secured.

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The OECD just published the parameters of a deal that would exempt US companies from two key enforcement rules in the global minimum tax framework.

The deal, which spans 88 pages in the form of administrative guidance, includes a slew of safe harbor rules that address everything from how US companies can get the exemption to more advantageous treatment of substance-based tax incentives like the US R&D credit. It includes a permanent, simplified global minimum tax calculation.

Other countries would be able to obtain carve-outs like the ones obtained by the US and its multinational companies—if they meet certain criteria.

This week on Talking Tax, reporters Lauren Vella and Somesh Jha discuss why the deal and the timing of its release is important, what it means for multinational businesses, how key US lawmakers reacted, and what the deal means for the efficacy of the global minimum tax going forward.

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We're off for the New Year holiday, so we're serving up an encore presentation of a Talking Tax podcast about challenges with paying student athletes.

Ever since student athletes gained the right to be compensated for use of their image in advertisements and merchandise sales, the money has flooded in, but so have some problems.

The athletes can now be compensated for their name, image, and likeness—or NIL—but schools still can’t directly pay them for playing. Instead, athletes can receive compensation when merchandise with their name or number is sold, or for showing up in advertisements or social media posts for businesses.

But the line between legitimate NIL and illegitimate pay-for-play can get blurry. On this episode of Talking Tax, University of Kentucky professor Stephen Lusch talks with reporter Caleb Harshberger about how transfer pricing and tax law concepts can show whether the deals are done at reasonable prices that really reflect the value the student brings.

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PwC's new training program aims to give early-career recruits hands-on experience integrating artificial intelligence tools into everyday work.

The Big Four accounting and advisory firm started piloting AI immersion sessions in October, with a full rollout to new US associates slated for July. The sessions are happening across PwC's tax, assurance, and advisory business.

"We truly believe that the role of the new associate will be changing with AI and that their role will become somewhat elevated, and we need to make sure that we're really training them on those skills to work and think differently," said Margaret Burke, the firmwide talent acquisition and development leader for PwC US.

Like its competitors, PwC has recently funneled resources into next generation autonomous tools aimed at handling routine tasks solo.

The firm said in November it shed about 150 jobs across marketing, human resources, and other US support roles as part of a longer-term effort modernizing its back-office unit, including through using new AI tools.

In this week's Talking Tax, Burke and PwC US Tax Leader Krishnan Chandrasekhar sat down with Bloomberg Tax reporter Jorja Siemons to discuss how the AI trainings have gone so far and what skills they hope new employees learn.

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