Cross-border Tax Talks

Doug McHoney (PwC’s International Tax Services Global Leader) is joined on June 24, 2025, by Pat Brown, an International Tax Partner and Co-Leader of PwC’s Washington National Tax Services practice. Pat previously served as the US Treasury’s Deputy International Tax Counsel and has been a frequent guest on the podcast. Doug and Pat start where they left off discussing 'One Big Beautiful Bill' (OB3), in wake of the US Senate Finance Committee Chairman's Substitute Amendment. They discuss the next steps in the legislative timeline including the impending July 4th deadline, the impact of the Byrd rule, as well as the many changes to both the business and international provisions. They focus on the major changes to Section 899, global intangible low-taxed income (GILTI), foreign derived intangible income (FDII), and the base erosion and anti-abuse tax (BEAT).

Doug McHoney (PwC’s International Tax Services Global Leader) is joined by Pat Brown, an International Tax Partner and Co-Leader of PwC’s Washington National Tax Services practice. Pat previously served as the US Treasury’s Deputy International Tax Counsel and has been a frequent guest on the podcast. Doug and Pat discuss the legislative and international tax implications of the 'One Big Beautiful Bill', including its procedural path through US Congress under budget reconciliation, and its implications for both domestic and cross-border taxpayers. They explore the bill’s temporary business provisions, including TCJA 'orphan' fixes, and the evolving treatment of research expenses, bonus depreciation, and interest deductions. A major focus is Section 899—dubbed the 'super BEAT'—which targets foreign digital services taxes (DSTs), diverted profits taxes (DPTs), and Pillar Two’s undertaxed profits rule (UTPR) with steep retaliatory measures. They also analyze the international negotiations around UTPR exemptions, the impact on treaty obligations, and the ongoing debate over treatment of US tax credits—particularly the R&D credit—under global minimum tax rules.

Doug McHoney (PwC’s International Tax Services Global Leader) is joined by Jenny Chong, Shanghai-based International Tax Partner and PwC’s Asia-Pacific International Tax Services Leader. Doug and Jenny discuss the structure and enforcement of China’s international tax regime, including corporate tax rates, incentives, CFC rules, and foreign tax credits. They examine the complexities of indirect stock transfer rules, audit trends, and beneficial ownership requirements. The conversation turns to Pillar Two, where Jenny outlines how Chinese multinationals are preparing despite a lack of formal adoption. They also explore the implications of potential termination of the US-China tax treaty and the resurgence of tariffs. Jenny shares how Chinese companies are adapting to compliance burdens and regulatory uncertainty amidst global tax and trade tensions.

Doug McHoney (PwC’s International Tax Services Global Leader) is joined by Leo Johnson, lecturer at Oxford University’s Smith School of Enterprise and the Environment. Leo is also co-founder of the advisory firm Sustainable Finance, where he chairs the Advisory Council, and previously worked at the World Bank. Known for presenting the BBC series on megatrends and innovation. Leo brings unique insight into organizational behavior, neuroscience, and purposeful leadership.  Doug and Leo discuss organizational inertia, transformation resistance, and how neuroscience and behavioral science explain our resistance to change—even amid crises like climate change, geopolitical turmoil, and economic stress. They explore how professionals, including those in international tax, can overcome ‘learned helplessness’ and avoid burnout by embracing purpose, agency, and connectedness. Leo introduces the concept of behavioral personas within organizations—catalysts, silent rebels, workhorses, and sustaining innovators—and emphasizes the need for authentic engagement and collaboration to drive meaningful change.

Doug McHoney (PwC’s International Tax Services Global Leader) is joined by Professor Itai Grinberg, a faculty member at Georgetown University Law Center and a former Deputy Assistant Secretary at the US Treasury Department during the Biden administration. In that role, Itai served as the United States' lead negotiator for the global corporate minimum tax initiative. Doug and Itai discuss the behind-the-scenes history of Pillar Two from the US perspective, exploring its policy rationale, global negotiations, and shifting political dynamics. The conversation begins with how Itai’s got his role at Treasury and builds a detailed timeline tracing the Biden administration’s early support for global minimum tax rules through the 2021 G7 agreement and the development of the Under-Taxed Profits Rule (UTPR). They also delve into the impact of the Build Back Better legislation which was not enacted, the rationale behind the US safe harbor under UTPR, international political tensions including Brexit and US-China relations, and the implications of the April 2025 Trump executive order. The episode closes with reflections on the OECD Inclusive Framework’s future and whether multinational enterprises can expect a workable consensus moving forward.