U.S. International Tax This Week for September 20

22 September 2019

Ernst & Young's U.S. International Tax This Week newsletter for the week ending September 20 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

Treasury on 16 September sent the eagerly-anticipated final IRC Section 59A Base Erosion and Anti-abuse Tax (BEAT) regulations to the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) for review. At the same time, Treasury also sent a new package of proposed BEAT regulations to OIRA for review. Treasury released comprehensive proposed BEAT regulations in December 2018, which addressed certain of the outstanding questions under IRC Section 59A, and provided guidance on the application of the gating thresholds and computational matters.

The IRS reportedly is considering ending its compliance campaign on non-filers of Form 1120-F, “U.S. Income Tax Return of a Foreign Corporation.” The campaign, one of the first compliance campaigns to be promulgated by the agency in 2017, has come under criticism by the Treasury Inspector General for Tax Administration (TIGTA). The TIGTA found “low examination referral and proposed assessment rates” resulting from the campaign. According to a TIGTA report released on 16 September, the IRS will evaluate whether the campaign should be amended or suspended entirely.

Pascal Saint-Amans, Director of the Organisation for Economic Co-operation and Development (OECD)’s Centre for Tax Policy and Administration, this week was quoted as saying that the OECD’s forthcoming proposals on Pillar 1 and Pillar 2 will incorporate tax certainty as a core part of the solution. A unified proposal is expected to be released by the OECD in late September or early October, prior to a planned G-20 Finance Ministers meeting expected to take place around a mid-October International Monetary Fund/World Bank meeting in Washington, DC.

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Upcoming Webcasts

BorderCrossings (September 26)
During this Thought Center Webcast, Ernst & Young professionals will survey recent trends in trade policies, review historical considerations, and offer transfer pricing and other perspectives on options for multinationals with global supply chains.

Key insights on India’s M&A environment (September 27)
During this Thought Center Webcast, Ernst & Young professionals will discuss India's transaction and corporate M&A landscape, recent transaction trends, typical characteristics associated with M&A activity and key tax and structuring considerations for M&A activity in India .

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Recent Tax Alerts

Africa

— Sep 18: Nigeria's Court of Appeal holds failure to register agreements with NOTAP does not render such agreements invalid (Tax Alert 2019-1658)

Asia

— Sep 18: Philippines issues guidelines for transfer pricing audits (Tax Alert 2019-1649)

— Sep 18: South Korea's National Health Insurance enrollment and exemption updates with new immigration restrictions discussed (Tax Alert 2019-1646)

— Sep 16: Malaysia repeals withholding tax exemption on income received from approved MSC status companies (Tax Alert 2019-1634)

Canada & Latin America

— Sep 18: Ecuadorian Customs Authority issues new regulations on applying for authorized economic operator status (Tax Alert 2019-1659)

— Sep 16: Government of Canada implementing new permit and reporting requirements for aluminum and steel imports (Tax Alert 2019-1638)

— Sep 16: Canada enhances trade remedy system by amending Special Import Measures Regulations (Tax Alert 2019-1637)

— Sep 16: Canada to remit surtaxes collected on certain imports of heavy steel plate and stainless-steel wire (Tax Alert 2019-1636)

Europe

— Sep 19: OECD releases 2018 mutual agreement procedure statistics (Tax Alert 2019-1665)

— Sep 19: The Netherlands introduces thin capitalization rule for banks (Tax Alert 2019-1664)

— Sep 18: European Commission launches 39 State-aid investigations on Belgian "excess profit" tax rulings (Tax Alert 2019-1657)

— Sep 18: The Netherlands publishes 2020 budget proposals (Tax Alert 2019-1655)

— Sep 18: The latest on BEPS and Beyond for September 2019 (Tax Alert 2019-1640)

— Sep 16: Portugal amends REIT regime (Tax Alert 2019-1635)

— Sep 16: Denmark publishes draft bill on international taxation for public comment (Tax Alert 2019-1633)

Middle East

— Sep 18: UAE issues guidance on economic substance rules (Tax Alert 2019-1656)

— Sep 18: Israel's Tax Authority announces that new cross-border transactions declaration form will not be mandatory for 2018 filings (Tax Alert 2019-1648)

Oceania

— Sep 18: Australian Taxation Office's proposed compliance approach to use of arm's-length debt test: A detailed review (Tax Alert 2019-1647)

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IRS Weekly Wrap-Up

Internal Revenue Bulletin

2019-39

Internal Revenue Bulletin of September 23, 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: 2019-1669