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21 April 2019

U.S. International Tax This Week for April 19

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

US officials this week offered their insights on the ongoing global digital taxation debate. A senior Treasury official was quoted as saying that certain exporting and headquarters jurisdictions may need to accept a modest reallocation of taxing rights to market jurisdictions in order to achieve global consensus. He indicated that a certain loss of revenue by some countries may be the price for reaching a coordinated, coherent solution to the digital taxation conundrum. The official cautioned that absent an agreed-upon global solution, unilateral measures will lead to more complexity and “enormous risks of double taxation.” He also said that he expected the arm’s-length standard would continue to apply in the great majority of transfer pricing cases, but that some other approaches may be necessary in some instances.

Another Treasury official this week touched on the Organisation for Economic Co-operation and Development’s (OECD) ongoing pillar 2 consultation work on finding a common global anti-base erosion and profit-shifting approach. The official suggested that while it is too early to say how the global framework may be crafted, a future OECD standard may lean towards a “looser consensus and not being highly prescriptive about how you implement the basic goal of achieving a minimum tax rate.” He reiterated earlier cautionary comments by US officials that there are significant design complexities and technical challenges associated with a minimum tax regime.

In a 16 April release, the IRS Large Business and International division announced three new compliance campaigns targeting captive service providers, offshore private banking (specifically targeting offshore accounts), and “loose filed Forms 5471.” The goal of the captive service providers campaign is to ensure that US multinationals pay their captive service providers an arm’s-length price for those services. The IRS plans to use issue-based examinations and soft letters in the campaign. The goal of the Form 5471 campaign is to improve compliance with the requirement to properly attach a Form 5471 to an income tax, partnership or exempt organization return.

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EY Articles and Publications

Current status of legislation relating to US international tax rules (BNA)
In a monthly column published in BNA's Tax Management International Journal, Current Status of Legislation Relating to U.S. International Tax Rules, members of Ernst & Young's International Tax Services group report on significant bills introduced in the 116th Congress that would affect international provisions of the Internal Revenue Code.

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Upcoming Webcasts

Are your clients digitally savvy? Join EY’s People Advisory Services America’s Signature Webcast to help them transform HR (April 23)
During this Thought Center Webcast, Ernst & Young professionals will demonstrate how companies from different industries have transformed their HR functions – and their reputations — as critical leaders in the organization.

BorderCrossings … With EY transfer pricing and tax professionals (April 25)
During this Thought Center Webcast, Ernst & Young professionals will help you stay informed and able to adopt a more proactive stance in developing and defending your transfer pricing policies and practices.

Key insights on India’s M&A environment with EY M&A and Tax professionals (May 2)
During this Thought Center Webcast, Ernst & Young professionals will discuss the following topics: (i) Overview of India’s transaction and corporate M&A landscape; (ii) Recent transaction trends in India; (iii) Typical characteristics associated with M&A activity in India; and (iv) Key tax and structuring considerations for M&A activity in India.

International tax talk (May 9)
During this Thought Center Webcast, Ernst & Young professionals will provide you with information on major tax law changes in the countries and jurisdictions covered by our US-based Global Tax Desk Network.

Global payroll challenges for US employers - Hosted by Ernst & Young LLP and Bloomberg Tax (June 25)
During this Thought Center Webcast, Ernst & Young professionals will discuss the international trends that are influencing payroll and HR systems and policies with a specific focus on the governing rules and how they are applied.

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Recent Tax Alerts

Africa

Asia

Canada & Latin America

Europe

Middle East

Oceania

Multinational

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IRS Weekly Wrap-Up

Internal Revenue Bulletin

 2019-17Internal Revenue Bulletin of April 22, 2019
 2019-16Internal Revenue Bulletin of April 15, 2019

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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: 2019-0800

 

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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