U.S. International Tax This Week for the Week Ending January 22

22 January 2016

Ernst & Young's U.S. International Tax This Week newsletter for the week ending January 22 is now available. Prepared by Ernst & Young's International Tax Services group, this weekly update summarizes important news, cases, and other developments in international taxation.

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Spotlight

Senate Finance Committee Chairman Orrin Hatch (R-UT) reportedly is looking at options to adopt US corporate integration, perhaps apart from comprehensive tax reform if that proves unworkable in the next Administration. Chairman Hatch was quoted as saying this week that he was working on a bipartisan approach that would eliminate the double taxation of corporate profits, although little detail is available. Recall Finance Committee members John Thune (R-SD) and Benjamin Cardin (D-MD) released a corporate integration plan last summer as part of one of the committee's tax reform working groups.

Meanwhile, House Ways and Means Committee Chairman Kevin Brady (R-TX) recently said that his committee would hold hearings on both inversions and repatriation legislation in 2016. Chairman Brady also was quoted as saying he is set to begin work with Finance Committee Chairman Hatch on an international tax reform proposal.

The Ways and Means Committee also made an important appointment this week, announcing that EY Tax partner Barbara Angus will assume the position of Chief Tax Counsel for the Committee. Barbara, who earlier held several positions in the government including with the Joint Committee on Taxation and as Treasury International Tax Counsel, will be integrally involved in the development of US international tax reform, and ensuing comprehensive tax reform. The EY Tax practice wishes her well as she moves on to serve in this important post.

This week, Finance Committee Chairman Hatch, Ranking Member Ron Wyden (D-OR) and Committee members Rob Portman (R-OH) and Chuck Schumer (D-NY) sent a letter to Treasury Secretary Jack Lew expressing their "strong concerns" about the ongoing EU state aid investigations which they said appear to be targeting US companies. The Senators urged the Administration to caution the EU Commission not to "reach retroactive results that are inconsistent with internationally accepted standards." The Committee members further reminded the Secretary of the punitive options available to the US government under Section 891 when it is determined that US corporations are being treated in a discriminatory manner.

The government issued IRS Notice 2016-10, describing regulations that will be released to address the application of Sections 853 and 905(c) in relation to tax refunds received by a regulated investment company (RIC) that was eligible for a foreign tax credit if that foreign tax, when paid by the RIC, was treated as paid by the RIC's shareholders under an election. The Notice comes on the heels of recent EU Court of Justice cases in which the Court ruled that member states could not impose withholding on certain foreign investors if similarly situated domestic investors were not subject to tax. RICS are now receiving refunds and have requested that Treasury provide guidance on the appropriate treatment of the refunds.

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Upcoming Webcasts

Major changes to Union Customs Code
During this Thought Center Webcast, Ernst & Young professionals will discuss the changes to EU customs legislation, as of May 1, 2016, under the recently adopted Union Customs Code. The topics that will affect multinational businesses most are highlighted during this session include: (i) Customs valuation, substantial changes; (ii) Changes to special procedures such as warehousing and processing; (iii) Authorized Economic Operator; (iv) Binding Tariff Information; and (v) Export from the EU.

BEPS is broader than tax: Considerations for the treasury team (session 3 of 7)
During this Thought Center Webcast, Ernst & Young professionals will discuss the impact that BEPS is expected to have on key treasury activities such as capital structuring, intra-group lending arrangements, cash pooling systems and risk management activities.

BorderCrossings
During this Thought Center Webcast, Ernst & Young professionals will help you stay informed and able to adopt a more proactive stance in developing and defending your transfer pricing policies and practices.

Americas Tax legislative update: Recent trends and outlook for 2016
Tax reform, leadership shifts and BEPS-driven legislative changes are happening throughout the Americas, adding complexity to an already challenging tax environment. During this Thought Center Webcast, Ernst & Young professionals will discuss these and other topics of interest, including: (i) What the recent elections and tax changes across Latin America and Canada could mean for multinationals; (ii) The US tax legislative outlook; and (iii) How the shift toward digitization will affect your tax operations.

International tax talk quarterly series with EY's Global Tax Desk Network: Business activities abroad in a changing transfer pricing landscape
During this Thought Center Webcast, Ernst & Young professionals will discuss the hot transfer pricing topics that may affect your international business activities, with a specific focus on Europe and India.

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Recent Tax Alerts

United States

— Jan 21: New US law furthers trend of enhanced collaboration between US tax and immigration authorities (Tax Alert 2016-0141)

Africa

— Jan 22: Namibia enacts 2015 VAT and income tax amendments (Tax Alert 2016-0163)

— Jan 21: Ghana enacts income tax amendments (Tax Alert 2016-0140)

— Jan 21: Ghana enacts VAT amendments (Tax Alert 2016-0146)

— Jan 20: Cape Verde issues new transfer pricing documentation requirements (Tax Alert 2016-0132)

Canada & Latin America

— Jan 22: Update provided regarding Brazil's visa exemption during Olympic Games (Tax Alert 2016-0160)

— Jan 22: Venezuela modifies foreign exchange rules (Tax Alert 2016-0158)

— Jan 21: Canada's new travel restrictions coming into force March 15 (Tax Alert 2016-0143)

— Jan 21: Venezuela modifies Income Tax Law (Tax Alert 2016-0153)

— Jan 21: Venezuela establishes new tax on large financial transactions (Tax Alert 2016-0154)

— Jan 20: Honduras enacts a new tax amnesty program (Tax Alert 2016-0138)

— Jan 19: Ecuador establishes requirements for completing the shareholders' annex (Tax Alert 2016-0127)

— Jan 18: Mexican tax authorities issue Administrative Rules for 2016 related to FATCA and CRS reporting (Tax Alert 2016-0119)

Europe

— Jan 22: UK's Migration Advisory Committee publishes comprehensive review of skilled visa category (Tax Alert 2016-0162)

— Jan 22: Netherlands ratifies tax treaty with Sint Maarten (Tax Alert 2016-0161)

— Jan 22: Spain and Mexico sign new protocol to tax treaty (Tax Alert 2016-0164)

— Jan 21: Important New Zealand tax residency case concluded in favor of taxpayer (Tax Alert 2016-0142)

— Jan 20: Poland imposes bank/insurance levy as of February 1 (Tax Alert 2016-0136)

— Jan 19: The latest on BEPS as of January 18 (Tax Alert 2016-0126)

— Jan 18: Finnish Government submits CbC reporting proposal (Tax Alert 2016-0118)

— Jan 18: Considerations of the European Commission ruling in Belgium state aid matter (Tax Alert 2016-0125)

Middle East

— Jan 19: Kurdistan Region of Iraq issues new circular on corporate income tax filing obligations (Tax Alert 2016-0129)

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IRS Weekly Wrap-Up

Internal Revenue Bulletin

	2016-03	Internal Revenue Bulletin of January 19, 2016
	2016-04	Internal Revenue Bulletin of January 25, 2016

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Additional Resources

Ernst & Young Client Portal, the leading source for news, analysis, and reference materials for corporate tax professionals, has a variety of content of interest to international tax practitioners, including:

— International Tax Online Reference Service. Key information about, and important tax developments from, 56 foreign jurisdictions, including information on tax rates, interest rates and penalties, withholding, and filing dates.

— EY/Passport. EY/Passport is your guide to planning ventures in the global economy, offering a wealth of tax and business knowledge on more than 150 countries.

Because the matters covered herein are complicated, U.S. International Tax This Week should not be regarded as offering a complete explanation and should not be used for making decisions. Any decision concerning matters covered herein should be reviewed with a qualified tax advisor.

Document ID: 2016-0157