FOR IMMEDIATE RELEASE
AICPA Submits Comments to Treasury on Tax Issues of OECD Pillar Two
Washington, D.C. (February 9, 2024) The American Institute of CPAs (AICPA) submitted comments to the US Department of the Treasury and Internal Revenue Service (IRS) in response to Notice 2023-80, which provides guidance on the foreign tax credit and dual consolidated losses in relation to the Global Anti-Base Erosion (GloBE) Model Rules, or Pillar Two.
The Notice addresses the foreign tax credit rules and the dual consolidated loss rules, to certain types of taxes described in the Organisation for Economic Co-operation and Development (OECD’s) GloBE Model Rules.
The Pillar Two rules create a coordinated system of minimum taxation intended to ensure that Multinational Enterprise (MNE) Groups with annual revenue of 750 million euros or more pay a minimum level of tax on the income arising in each jurisdiction in which they operate.
The latest comments provided are in addition to comments sent in December regarding OECD tax issues. The most recent letter addresses the following areas:
The collateral impact of Pillar Two taxes on controlled foreign corporation (CFC) inclusions and the application of section 952(c) limitation.
The interaction between the Dual Consolidated Loss (DCL) rules and the jurisdictional blending rules under Pillar Two.
Request for further guidance providing more certainty as to the creditability of certain Pillar Two taxes.
Treatment of specific Pillar Two taxes within the context of a foreign law inclusion regime under Treas. Reg. § 1.861-20(b)(11).
Request clarification on the application of the rules in Notice 2023-80 providing an extension of the temporary relief previously provided in Notice 2023-55.
“AICPA’s comment letter highlights some of the areas that we believe Treasury and the IRS should consider as they work toward proposed regulations,” says Reema Patel, Senior Manager for Tax Policy & Advocacy with the Association. “Our goal was to identify the challenges taxpayers would face with the current Notice and advocate for further clarification.”
About the American Institute of CPAs
The American Institute of CPAs® (AICPA®) is the world’s largest member association representing the CPA profession, with more than 415,000 members in the United States and worldwide, and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting. AICPA sets ethical standards for its members and U.S. auditing standards for private companies, not-for-profit organizations, and federal, state and local governments. It develops and grades the Uniform CPA Examination, offers specialized credentials, builds the pipeline of future talent and drives continuing education to advance the vitality, relevance and quality of the profession.
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Contact: Veronica L. Vera
202-434-9215
Veronica.Vera@aicpa-cima.com
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BACKGROUND:
December 11, 2023:Comments on Draft Organisation for Economic Co-operation and Development OECD/G20 Inclusive Framework Pillar One Multilateral Convention Text
December 2, 2019: Public Consultation Document – Global Anti-Base Erosion Proposal (“GloBE”) – Pillar Two
November 11, 2019:Public Consultation Document – Secretariat Proposal for a “Unified Approach” under Pillar One
May 28, 2019: “Comments on the OECD Public Consultation Addressing the Tax Challenges of the Digitalisation of the Economy,”