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22 April 2016

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

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

House Ways and Means Tax Policy Subcommittee Chairman Charles Boustany (R-LA) reportedly met this week with Republican committee members to map out how to move forward with developing an international tax reform draft proposal. Although Ways and Means Committee Chairman Kevin Brady (R-TX) repeatedly has taken the position that international tax reform would be the first step in tackling comprehensive reform, there has been some uncertainty in recent weeks as to the direction of House tax reform efforts.

Complicating the situation, Chairman Boustany is also working on the House tax reform task force, which has been tasked with developing a comprehensive tax reform blueprint before the Republican National Convention in July. Chairman Brady last week also indicated he wants to release that blueprint sometime in June.

On the Senate side, Finance Committee Chairman Orrin Hatch (R-UT) this week took to the floor of the Senate to call for an overhaul to the US tax system to curb corporate inversions. Chairman Hatch also criticized Treasury's latest rules on earnings stripping aimed to counter inversions, saying they are analogous to a doctor attempting to treat a patient's symptoms rather than the underlying disease. Congressional Republican leadership prefers a legislative solution to inversions in the form of comprehensive tax reform.

Addressing his forthcoming corporate integration proposal, Chairman Hatch said this week the current draft plan would raise revenue, but that he wants corporate integration to be revenue neutral. A Senate aide later was quoted as explaining that the additional revenue would be used for transition costs for companies that would be adversely affected by the proposed integration plan.

In other news, a Treasury official this week indicated that the new anti-inversion rules (final, temporary and proposed regulations modifying the application of Sections 7874 and 367 to inversion transactions) and the proposed debt/equity Section 385 regulations may not be finalized at the same time. Both sets of regulations were released on 4 April. The Treasury official also refused to discount the possibility the government could release a fourth round of anti-inversion guidance (in addition to the two Notices and the recent regulations already issued).

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EY Guides, Surveys, and Reports

Examining the impact of BEPS on the life sciences sector
As with other multinational corporations, all of the Base Erosion and Profit Shifting (BEPS) actions have a potential impact on companies in the life sciences sector. This EY report explains these actions and their implications for the life sciences sector.

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Upcoming Webcasts

BorderCrossings ... With EY's transfer pricing and tax professionals
Multinational enterprises (MNEs) participating in cross border transactions need to understand the complexities of transfer pricing and customs issues, as well as how these different "valuation" regimes intersect. During this Thought Center Webcast, Ernst & Young professionals will discuss how these issues can influence your business.

Proposed debt-equity regulations: What multinationals need to know
The US Treasury Department released a sweeping package of proposed regulations (sometimes referred to as "earnings stripping" regulations) on April 4, concerning the characterization, as debt or equity, of certain instruments issued by a corporation to another related corporation. Please join a panel of Ernst & Young LLP professionals on this Thought Center Webcast for a timely discussion of these far-reaching proposed regulations.

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Recent Tax Alerts

Africa

Asia

— Apr 15: Singapore enacts Budget 2015 tax changes (Tax Alert 2016-0698)

Canada & Latin America

— Apr 20: Ecuador's president proposes tax reform (Tax Alert 2016-0725)

— Apr 15: Alberta budget 2016-17 discussed (Tax Alert 2016-0689)

— Apr 15: Newfoundland and Labrador budget 2016-17 discussed (Tax Alert 2016-0688)

Europe

— Apr 20: EY Slovakia's Tax News for March 2016 (Tax Alert 2016-0719)

Middle East

Oceania

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IRS Weekly Wrap-Up

Internal Revenue Bulletin

 2016-16Internal Revenue Bulletin of April 18, 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: 2016-0737

 

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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