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20 October 2019

U.S. International Tax This Week for October 18

Ernst & Young's U.S. International Tax This Week newsletter for the week ending October 18 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 House and Senate are back in session after a two-week fall break, with speculation about the prospects for advancing legislation in the shadow of the ongoing House impeachment inquiry. Government funding expires on 21 November and legislation to extend funding beyond that date is being targeted as a vehicle for items that include tax extenders, Tax Cuts and Jobs Act (TCJA) technical corrections, a retirement security bill, and repeal or delay of Affordable Care Act (ACA) taxes, among others. A lack of progress in the negotiations may require an additional continuing resolution (CR) to cover some or all of the government funding beyond 21 November and/or through the entire fiscal year. Senate Finance Committee Chairman Chuck Grassley this week was quoted as saying the committee probably would not consider tax extenders legislation this year, but that a “four corners” discussion on a tax extenders package among aides to the congressional tax writing committees is ongoing.

On 17 October, British and European Union (EU) negotiators announced they had reached agreement on a new Brexit deal. The agreement sets out the framework for the United Kingdom (UK)’s future relationship with the EU, allowing the UK to enter into a “broad, deep and flexible” free trade agreement with the EU along with a security partnership. The deal needs to be agreed to by the European Council, and then by the European and UK Parliaments. The withdrawal agreement will be debated, and ultimately decided by the UK Parliament during a rare Saturday session on 19 October. The final outcome of the Brexit saga remains uncertain at time of publication of this Alert.

The Organisation for Economic Co-operation and Development (OECD) public consultation document outlining a “unified approach” under Pillar One of the ongoing project titled “Addressing the Tax Challenges of the Digitalisation of the Economy” is expected to be presented at the G20 Finance Ministers and Central Bank Governors meeting in Washington, DC on 18 October. Pascal Saint-Amans, Director of the OECD’s Centre for Tax Policy and Administration, was quoted as saying the organization hopes to cement the details of its digital tax proposal in January, with a political agreement reached in June 2020. If agreement can be reached in summer 2020, Saint-Amans said the implementation phase would begin. Saint-Amans added, “Then the question is, what will be the instrument to implement it and how much time to develop [rules]? But the goal is to move as fast as possible if we have political agreement. For the time being we are focusing on political agreement.”

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Upcoming Webcasts

US Information Reporting and Withholding for Technology, Media & Entertainment, and Telecomm sectors (October 23)
During this Thought Center Webcast, Ernst & Young professionals will provide relevant technical updates and address those information reporting and withholding issues most common to the TMT sectors.

US Information Reporting and Withholding for the Health and Life Sciences sector (October 24)
During this Thought Center Webcast, Ernst & Young professionals will provide relevant technical updates and address those information reporting and withholding issues most common to the Health and Life Sciences sector.

OECD BEPS 2.0 is coming: How do you navigate cross-border business in the wake of change? (October 31)
For multinational businesses, preparing for the impact of the OECD’s project on addressing the tax challenges of the digital economy (or BEPS 2.0) will be imperative. During this Thought Center Webcast, Ernst & Young professionals will discuss developments in digital taxation, including the evolution of the ongoing OECD project.

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Recent Tax Alerts

United States

— Oct 17: Trade Watch for Autumn 2019 (Tax Alert 2019-1840)

Africa

Asia

Canada & Latin America

Europe

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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: 2019-1846

 

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