U.S. International Tax This Week for the Week Ending August 19

19 August 2016

Ernst & Young's U.S. International Tax This Week newsletter for the week ending August 19 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

The US Treasury and IRS on 15 August released the 2016-2017 Priority Guidance Plan. The Plan lists 281 priority publication projects on various tax issues during the Plan Year (1 July 2016 to 30 June 2017). Not unexpectedly, the IRS listed finalization of both the proposed Section 385 debt/equity regulations and the temporary and proposed anti-corporate inversion regulations.

Other international tax projects on the list include final regulations under Section 956 on the treatment of loans to foreign partnerships and related issues, regulations under Section 367(d) regarding transfers of intangible property to foreign corporations, and regulations under Section 1256(g)(2) to address the Sixth Circuit Court of Appeals decision in Wright v. Commissioner. In Wright, the appeals court held that that an over-the-counter euro foreign currency option is subject to the mark-to-market rules of Section 1256, overturning both prior Tax Court decisions and IRS guidance.

In other news, the IRS this week issued final regulations under Section 5000(c), addressing the 2% excise tax on payments the US government makes to foreign persons under certain procurement contracts. The package also includes final regulations under Section 6114 with respect to foreign persons claiming an exemption from the 2% tax under an income tax treaty. The proposed regulations, originally issued in April 2015, are adopted with certain changes. The regulations set forth a number of exemptions from the tax and provide procedures for collecting the tax. A Tax Alert is forthcoming.

Finally, in a letter to House Ways and Means Committee member Lloyd Doggett (D-TX) on 12 August, a Treasury official confirmed that the Administration believes it can address the unintended consequences in the proposed Section 385 regulations. The official also wrote that finalizing the regulations remains an important priority for Treasury and the IRS.

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EY Guides, Surveys, and Reports

EY's 2016 Worldwide Estate and Inheritance Tax Guide available
The 2016 Worldwide Estate and Inheritance Tax Guide includes information effective as of March 2016. The guide summarizes gift, estate and inheritance tax systems and describes wealth transfer planning considerations in 38 jurisdictions and territories. It is relevant to the owners of family businesses and private companies, managers of private capital enterprises, executives of multinational companies and other entrepreneurial and internationally mobile high-net-worth individuals.

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Upcoming Webcasts

For a list of upcoming webcasts, see the Ernst & Young tax webcast calendar.

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Recent Tax Alerts

Asia

— Aug 16: Malaysian immigration update (Tax Alert 2016-1410)

— Aug 16: Taiwan announces plan to tax crossborder e-commerce transactions (Tax Alert 2016-1403)

— Aug 16: Pakistan amends taxation of real estate investments (Tax Alert 2016-1405)

Canada & Latin America

— Aug 16: Uruguay's Executive Power proposes a bill to adopt Convention on Mutual Administrative Assistance in Tax Matters (Tax Alert 2016-1407)

Europe

— Aug 18: Norway introduces new rules on mutual fund taxation (Tax Alert 2016-1414)

— Aug 17: UK Government opens consultations on Making Tax Digital reform (Tax Alert 2016-1413)

— Aug 16: Turkey introduces new explication notice practice into tax system (Tax Alert 2016-1404)

— Aug 15: The latest on BEPS as of August 15 (Tax Alert 2016-1398)

— Aug 12: Turkish law amending certain tax codes to enhance investment environment in Turkey is now in force (Tax Alert 2016-1391)

— Aug 12: Luxembourg introduces draft law on country-by-country reporting (Tax Alert 2016-1392)

Oceania

— Aug 16: New Zealand introduces legislation to enable automatic exchange of financial account information for financial institutions (Tax Alert 2016-1402)

— Aug 12: Australian Taxation Office issues Taxpayer Alert on restructuring distribution of overseas intangibles and services to Australian customers (Tax Alert 2016-1393)

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IRS Weekly Wrap-Up

Internal Revenue Bulletin

2016-33

Internal Revenue Bulletin of August 15, 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: 2016-1420