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18 March 2016

U.S. International Tax This Week for the Week Ending March 18

Ernst & Young's U.S. International Tax This Week newsletter for the week ending March 18 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

A draft US international tax reform bill will not be ready for release by the end of March, a deadline originally set by Ways and Means Tax Policy Subcommittee Chair Charles Boustany (R-LA) in February. Ways and Means Committee Chairman Kevin Brady (R-TX) this week was quoted as saying that policy consensus would drive the timeline and the earlier deadline was more of an informal timetable to develop draft legislation. Chairman Brady also indicated that no decision has been made on how to integrate an innovation box into broader international tax reform efforts.

The Ways and Means Chairman also said the committee is reviewing Senate Finance Committee Chairman Orrin Hatch's (R-UT) draft corporate tax integration draft. Chairman Brady told a Washington audience that corporate integration would be complementary to international tax reform efforts, particularly in regard to the issue of corporate inversions. Chairman Hatch meanwhile said that dynamic and static scoring of his corporate integration plan is holding up the release of the draft.

Coming up, Chairman Boustany has announced that his Subcommittee will hold a hearing on 22 March entitled "Fundamental Tax Reform Proposals." The hearing will be the first in a series of hearings for subcommittee members to discuss their proposals for tax reform.

And a Treasury official this week said that the first set of technical corrections to last December's Protecting Americans from Tax Hikes (PATH) Act of 2015 will be released "very soon," but likely will not include corrections to PATH provisions relating to the 1980 Foreign Investment in Real Property Tax Act (FIRPTA). The official indicated there may be several technical corrections released.

In OECD BEPS developments, Pascal Saint-Amans, director of the OECD's Centre for Tax Policy and Administration, this week said development of a peer review to monitor countries' resolution of mutual agreement procedure cases is "well advanced." He further was quoted as saying he expects the reviews to be ready in 2017.

Another OECD official was quoted as saying that standards on when and how to apply transfer pricing profit split methods will be released in 2017. The official added that tax authorities should not treat the OECD's 2014 discussion draft on profit splits as authoritative.

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EY Guides, Surveys, and Reports

EY publication highlights ACA excise tax compliance issues for employers
EY has published an important update for any employers dealing with Affordable Care Act (ACA) compliance - ACA excise tax compliance: The crunch is here in 2016. Although employers have gained one year of experience with the ACA's "pay-or-play" excise tax and compliance, the risks in 2016 associated with failing to comply with the excise tax ratchet up dramatically.

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Tax Insights

An overly ambitious approach to hybrids by the OECD (BNA)
This article, published in Tax Management International Journal, reports on the final OECD BEPS report on Action 2 — Neutralizing the Effects of Hybrid Mismatch Arrangements.

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Upcoming Webcasts

Global trade management: Making sense of a world in motion
During this Thought Center Webcast, Ernst & Young professionals will discuss the following key topics: (i) Managing operations and duty costs related to changing trade flows and fragmented supply chains; (ii) Digital future and distribution channels; (iii) Managing policy and controversy; (iv) Data access, transparency and analytics trends; and (v) Service delivery models of leading global trade practices.

BorderCrossings ... With EY's transfer pricing and tax professionals
During this Thought Center Webcast, part of an ongoing monthly series, EY transfer pricing and tax professionals will help you stay informed and able to adopt a more proactive stance in developing and defending your transfer pricing policies and practices.

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Recent Tax Alerts

United States

Africa

— Mar 18: Zimbabwe enacts new transfer pricing legislation (Tax Alert 2016-0528)

— Mar 14: Update provided on Kenya's withholding VAT system (Tax Alert 2016-0495)

Asia

Canada & Latin America

— Mar 18: Québec budget 2016-2017 discussed (Tax Alert 2016-0523)

Europe

— Mar 18: EY Slovakia's Tax News for February 2016 (Tax Alert 2016-0525)

— Mar 17: United Kingdom's budget 2016 discussed (Tax Alert 2016-0511)

— Mar 15: Belgium updates tax haven blacklists (Tax Alert 2016-0502)

— Mar 14: The latest on BEPS as of March 14 (Tax Alert 2016-0497)

Middle East

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IRS Weekly Wrap-Up

Internal Revenue Bulletin

 2016-11Internal Revenue Bulletin of March 14, 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: 2016-0522

 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

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