House Ways and Means Committee Chairman Kevin Brady (R-TX) recently said his committee is planning to begin drafting international tax reform legislation immediately, while simultaneously developing a blueprint for comprehensive tax reform. Asked how the committee's work on international tax reform and comprehensive reform will fit with Senate Finance Committee Chairman Orrin Hatch's (R-UT) efforts to introduce a corporate integration bill, Chairman Brady was quoted as saying he sees the Senate efforts as being "parallel tracks going the same direction."

The Ways and Means Committee also announced it will hold a hearing on international tax reform on 24 February.

In other news, Treasury released the long-awaited revised US model income tax treaty this week, updating existing provisions but also adding some new measures including mandatory binding arbitration. The 2016 model treaty further includes provisions that are aimed at limiting treaty benefits in certain cases when the resident benefits from a special tax regime, as well as provisions that would reduce the benefits of corporate inversions by denying treaty benefits in certain circumstances.

The new model treaty also updates the existing limitation on benefits provision. The US model treaty was last updated in 2006. Treasury announced that it plans to release a technical explanation to the new model sometime this spring. The preamble to the 2016 model treaty invites public comments on certain issues that the government plans to address in the technical explanation. An ITS Alert is pending.

In recent months, the US government has indicated its growing concern over the EU State Aid investigations, suggesting that the European Community is unfairly targeting US multinationals. In a recent letter to the President of the European Commission, Treasury Secretary Jack Lew wrote that the Commission's use of a "sweeping interpretation" of the EU legal doctrine of state aid, in investigations of tax rulings granted to US companies, creates "disturbing" international tax policy precedents and should be reconsidered.

This week, Robert Stack, Treasury deputy assistant secretary (international tax affairs), was quoted as saying that while the United States is committed to addressing profit shifting, just because a US multinational has deferred tax by shifting income to a tax haven does not mean that that income should be taxed in Europe. The US also continues to reject the retroactive aspects of the commission's rulings.