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09 February 2018

U.S. International Tax This Week for the Week Ending February 9

Ernst & Young's U.S. International Tax This Week newsletter for the week ending February 9 is now available. The Report on recent US international tax developments, summarizes important news and other developments in international taxation.

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Spotlight

Treasury and the Internal Revenue Service (IRS) on February 7, released the second quarter update to the 2017-2018 Priority Guidance Plan, to reflect additional projects that have become near-term priorities as a result of the Tax Cuts and Jobs Act (TCJA) enacted in December 2017. Several international tax projects are listed under the section on initial implementation of the TCJA:

— Computational, definitional, and other guidance under new Section 163(j)

— Guidance implementing new Section 965 and other international sections of the TCJA

— Guidance under new Section 1446(f) for dispositions of certain partnership interests

A Treasury official was quoted as saying the Government will be working on these initial projects "with intensity over the next six months." The Plan also lists projects unrelated to the TCJA. The Government indicated it may further update the 2017-2018 plan during the plan year "to reflect additional items that have become priorities and guidance that we have published during the plan year."

According to the Treasury official, taxpayers should not expect many notices relating to the TCJA, but to the extent they are issued, they will be limited in scope and address basic questions. An example of a future notice includes certain "gating issues" under Section 163(j) to address items in the legislative history that are not in the provision.

The official said the Government also plans to issue a third repatriation transition notice to address procedural matters, but there reportedly is disagreement among government officials whether more transition notices will be released.

In other IRS news, a Treasury official said the Government plans to further delay the effective date of the final Section 987 branch currency regulations until 2020, citing the need to focus on TCJA guidance. The final regulations under Section 987 were issued in December 2016. Recall that the final foreign currency regulations were identified in Notice 2017-38 (along with seven other regulations) as significant tax regulations requiring additional review under Executive Order 13789. The Treasury official said the plan now is to issue additional proposed regulations sometime mid-year or early fall 2018.

This would be the second delay for the Section 987 regulations; on October 2, 2017, Treasury and the IRS announced in Notice 2017-57, that they intended to delay the applicability date of the final and related temporary regulations by one year. At the time, this made the final Section 987 regulations applicable to tax years beginning on or after two years after the first date of the first tax year following December 7, 2016 (i.e., January 1, 2019, for in-scope calendar-year taxpayers).

Finally, Treasury Secretary Steven Mnuchin this week said the US would enter into tax treaty negotiations with Armenia. The Treasury Secretary made the statement during a February 6 hearing on Capitol Hill.

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Upcoming Webcasts

International tax talk quarterly series: Addressing tax planning, risk and other pertinent global tax topics (February 13)
During this Thought Center Webcast, Ernst & Young professionals will discuss the non-US tax aspects and practical issues encountered in cash repatriations. The panel will highlight recent developments and tax issues in mobilizing cash that typically arise in various parts of the world.

Non-US multinationals investing into the US: Operational and strategic considerations (February 14)
The passage of the Tax Cuts and Jobs Act on December 22, 2017 represents the first major overhaul of the US federal income tax system in more than 30 years and triggers immediate and far-reaching international business and tax consequences. During this Thought Center Webcast, Ernst & Young professionals will examine the legislation that will materially impact many non-US multinationals' financial reporting, operational (e.g., supply chain and treasury) and mergers and acquisitions frameworks.

Assessing trade implications of recent global developments (February 14)
During this Thought Center Webcast, a select team of our tax and legal professionals discuss the practical implications for trade of the current uncertainty around US tax reform, the North American Free Trade Agreement (NAFTA), BREXIT and the Trans-Pacific Partnership (TPP).

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Recent Tax Alerts

United States

Africa

Asia

Canada & Latin America

Europe

Middle East

Oceania

Multinational

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Recent Newsletters

ITS/Washington Dispatch
   Highlights of this edition include:

Legislation

— US Treasury addresses TCJA guidance

IRS news

— IRS begins filling in details on TCJA's new Section 965 transition tax on foreign earnings
— Treasury grants yet another extension of time for reporting signature authority (FBAR, Form 114) over certain foreign financial accounts

Transfer pricing news

— IRS LB&I issues instructions for examiners on transfer pricing selection issues
— IRS limits use of mandatory transfer pricing IDR and instructs examiners on penalties in transfer pricing cases

OECD developments

— OECD launches International Compliance Assurance Program pilot

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IRS Weekly Wrap-Up

Internal Revenue Bulletin

 2018-06Internal Revenue Bulletin of February 05, 2018

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: 2018-0295

 

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