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Integrated Global Tax and Optimization Strategies

February 15, 2024
By Allison Lavigne

Notice 2023-80 Comments

February 9, 2024

Excerpt

In summary, we recommend that Final Top-up Taxes should not result in calculation circularity for the income tax years to which they relate. To accomplish this, we suggest a rule that specifically allocates those taxes to Section 959(c)(3) earnings as of the end of the low-taxed constituent entity’s computational tax year.

Globe Meets GILTI – Ready, Set, Go!

December 18, 2023
By Mark Gasbarra

2024 is around the corner and we wanted to alert you to the latest Pillar Two Guidance provided by IRS Notice 2023-80.

https://www.irs.gov/pub/irs-drop/n-23-80.pdf 

The guidance for coordination of Pillar 2 QDMTT and GILTI is completely consistent with VantagePoint’s fully integrated Pillar Two/GILTI logic with or without the GILTI High-tax Exclusion.

  • QDMTT’s will be included in the GILTI high-tax exclusion and will be eligible for the U.S. Foreign Tax Credit, and
  • The after-tax U.S. GILTI tax cost will be included in Covered Taxes for Pillar Two purposes.

In addition to this welcome QDMTT/GILTI guidance, the IRS Notice proposes novel guidance on the treatment of Final Top-up Taxes, associated with Income Inclusion Regimes (IIR) and the Undertaxed Profits Rule (UTPR).

Please let us know if you would like to schedule a meeting to discuss how Pillar Two is affecting your Company and VantagePoint’s additional global tax planning features.

We will be providing a comprehensive analysis of IRS Notice 2023-80 at the upcoming Webinar.

Step-by-Step Methodology to Implementing Pillar Two

October 9, 2023
By Mark Gasbarra

Integrating Pillar Two operational rules along with other U.S. international tax calculations and compliance requirements is essential to provide accurate forecasting and reliable results for stakeholders.

Forte has developed an unique approach working with clients and using VantagePoint™.

STEP 1:  Building the Analytical Framework

  • OECD Guidance and Jurisdictional Legislation
  • Legal/Tax Organizational Structure
  • Jurisdictional Tax Attributes
  • Financial Accounting Net Income or Loss (FANIL)
  • Detailed Data Points and Sources

STEP 2:  Transitional Safe Harbour and QDMTT

  • Multiple Tax Purposes
  • CbCR, GloBE and Covered Tax Adjustments
  • Transitional Safe Harbour Analysis
  • Qualified Domestic Top-up Tax
    • Safe Harbour, Credit and U.S. FTC Analysis

STEP 3:  U.S. Tax Calculations and Pillar Two Interplay

  • Pillar Two Operational Rules
  • GILTI, FDII and FTC
  • CFC Allocation Keys
  • Pillar Two Report

STEP 4:  Application of Charging Provisions

  • Income Inclusion Regimes and Rollup
  • UTPR considerations
  • UPE Safe Harbour

STEP 5: Review & Report Results

  • Pro Forma GloBE Information Return
  • Effective Tax Rate Analysis
  • Process Improvement Recommendations

Learn more at our upcoming Pillar Two Boot Camp and Integrated Case Study.

Pillar Two – It’s All About the Interplay

September 6, 2023

By Mark Gasbarra

Understanding Pillar Two (“P2”) and its impact on a company’s global effective tax rate cannot not be measured in isolation – in fact it’s all about the interplay.

P2 is designed to ensure that every multinational enterprise (“MNE”) is subject to a minimum effective tax rate of 15% in every jurisdiction in which they operate.  This effective tax rate is determined is each jurisdiction by dividing the jurisdiction’s Covered Taxes by the jurisdictions GloBE Income.

Conceptually, GloBE Income is relatively straightforward and is determined by adjusting the jurisdiction’s Financial Accounting Net Income or Loss (“FANIL”) by a series of specifically defined adjustments designed to ensure comparability between MNEs.

Calculating Covered Taxes is much more complex and is all about the interplay between overlapping and disparate taxation rights and concepts.  In particular, the three primary areas of interplay are between the financial accounting principles, local country jurisdictional taxable income determination, and finally with CFC regimes such as the U.S. GILTI regime.

Pillar Two Resources

ONLINE WORKSHOP
Nov 27th – Dec 1st

INTRODUCING A NEW ONLINE COURSE

SPECIAL EDITION
Pillar Two Boot Camp &
Interactive Case Study
with
FORTE
FORVIS
BAKER TILLY
MCDERMOTT WILL & EMERY

Technical Sessions
November 27th | November 29th | December 1st
10:00 – 11:30 am and 2:00 – 3:30 pm CDT
-Up to 9 CPE-
+

  BONUS  
Interactive VantagePoint Case Study
December 4th – 8th
10:00 – 11:00 am CDT
-Up to 5 CPE-
 
Week 1 (Starting Nov 27th) – Technical Sessions will run twice a day on Monday, Wednesday and Friday with the ability to earn up to 9 CPE.  An integrated Case Study will be presented alongside the technical content to reinforce the Pillar Two calculation methodology focusing on how the Pillar Two rules interplay with U.S. tax law. 

Week 2 (Stating Dec 4th) – In the second week, participants will have the option of earning up to an additional 5 hours of CPE during a series of interactive Case Study development sessions using VantagePoint as a modeling tool.  This session focuses on a step-by-step methodology to implementing Pillar Two and integrating its operational rules along with other U.S. international tax calculations and compliance requirements.

Pillar Two, Part III

Pillar Two, Part II

Pillar Two, Part I

Tax Rate Modeling in the New World of US International Tax

Foreign branch versus CFC and the GILTI high-tax exclusion are two essential modeling imperatives

By Mark Gasbarra

The Complicated Web TCJA Weaves

Listen as we discuss how practitioners navigate the interconnected provisions of the Tax Cuts and Jobs Act, with a strong emphasis on Export Incentives including FDII and the Interest Charge Domestic Sales Corporation.

David D. Stewart, Benjamin M. Willis, and Mark Gasbarra