Recent US tax developments - Sec. 891 and Sec. 899 IRC

In this episode Arne Schnitger and Christian Kaeser welcome Pat
Brown, a Partner and Co-leader of PwC's Washington National Tax
Services practice. They focus on recent developments relating to US
tax policy, particularly Sec. 891 and Sec. 899 of the Internal
Revenue Code (IRC). Sec. 891 IRC, enacted in the 1930s and never
brought into force until now, allows to double the tax rate on
citizens and corporations from countries engaged in
extraterritorial and discriminatory taxation against the US.
President Trump has authorized an analysis of whether or not
countries are engaged in extraterritorial and discriminatory
taxation which most likely include the UTPR under Pillar Two. Sec.
899 IRC was a proposed change to the IRC in 2023, is not in force
currently and was recently reproposed with some amendments. It aims
to address extraterritorial and discriminatory taxation, too. The
rule would allow an increase in tax and specifically targeting the
UTPR under Pillar Two and Digital Services Taxes. Arne, Christian
and Pat talk about the different scope of both Sections, the
relation to international tax treaties, the potential impact of the
UTPR Safe-Harbours and a possible effective date.