U.S. International Tax This Week for January 10

12 January 2020

Ernst & Young's U.S. International Tax This Week newsletter for the week ending January 10 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.

—————————————————————————
Spotlight

The Office of the United States (US) Trade Representative held a public hearing on 7 January regarding tariffs proposed under Section 301 of the Trade Act of 1974, of up to 100% on US$2.4 billion in French goods, in response to France’s 3% Digital Services Tax (DST). The tariffs were proposed in conjunction with a report concluding that the French DST is unreasonable, discriminatory, and burdens US commerce. The hearing came as French Finance Minister Bruno Le Maire reiterated this week that the proposed US tariffs would be met with retaliation.

The press this week also quoted the French Finance Minister as saying France and the US would work on trying to reach agreement until they meet on the sidelines of the World Economic Forum in Davos, Switzerland, toward the end of January. Further, the Finance Minister said he recently spoke to US Treasury Secretary Steven Mnuchin regarding the DST and that tensions between the two nations are seen as complicating prospects for a multilateral digital taxation deal. Two Tax Cuts and Jobs Act international tax-related final regulations are pending review at the Office of Management and Budget’s (OMB) Office of Information and Regulatory Affairs. Final regulations regarding the business interest limitation under IRC Section 163(j) and final regulations relating to hybrid dividends and payments under IRC Sections 245A(e) and 267A were both sent to OMB for review in mid-December.

—————————————————————————
Upcoming Webcasts

The Power of Technology in Global Trade (January 22)
During this Thought Center Webcast, Ernst & Young professionals will explain current key issues and trends on this topic, alongside some innovative technology demonstrations to show how analytics can support your business in the most efficient, agile and cost effective way.

—————————————————————————
Recent Tax Alerts

United States

— Jan 07: Businesses tell USTR of concerns over French DST, US tariffs (Tax Alert 2020-0029)

Asia

— Jan 06: Hong Kong clarifies certain issues regarding treaty benefits (Tax Alert 2020-0023)

Canada & Latin America

— Jan 09: Peru extends tax benefits for agricultural sector (Tax Alert 2020-0045)

— Jan 09: Peru amends rules for capital gains tax exemptions (Tax Alert 2020-0042)

— Jan 08: Costa Rica's tax authorities issue guidance on the tax obligations for 'inactive companies' (Tax Alert 2020-0039)

— Jan 08: Argentina makes sweeping changes to tax laws, followed by regulations implementing recently enacted tax reform (Tax Alert 2020-0037)

— Jan 07: OECD and Brazilian Revenue Authority issue joint report on convergence of Brazilian transfer pricing rules with OECD standard (Tax Alert 2020-0032)

— Jan 07: Argentine Central Bank extends foreign exchange restrictions (Tax Alert 2020-0031)

— Jan 06: Colombia enacts new tax reform law (Tax Alert 2020-0025)

— Jan 03: Panamanian National Assembly approves bill on a beneficial owner register for legal entities (Tax Alert 2020-0019)

Europe

— Jan 10: Italy approves 2020 Budget Law (Tax Alert 2020-0049)

— Jan 10: Poland requires dematerialization of paper shares in Polish joint stock companies (Tax Alert 2020-0048)

— Jan 08: Belgium publishes legislation on Mandatory Disclosure Rules (Tax Alert 2020-0038)

— Jan 07: Netherlands passes Act to implement Mandatory Disclosure Rules (Tax Alert 2020-0030)

—————————————————————————
Recent Newsletters

Washington Dispatch
Highlights of this edition include:

Digital taxation

— US releases trade investigation findings regarding France’s Digital Services Tax; proposes imposition of tariffs

Treasury and IRS news

— US issues final and proposed BEAT regulations, with some relief for taxpayers

— IRS final and proposed regulations provide additional guidance for determining allowable foreign tax credits

— IRS issues final withholding and reporting regulations

— IRS issues final Section 871(m) regulations on dividend equivalent payments on derivatives referencing US equities, extends transition relief

— IRS issues proposed regulations on sourcing income from sales of certain personal property

— IRS further delays certain Section 987 foreign currency regulations

— Treasury grants another extension of time for reporting signature authority (FBAR, Form 114) over certain foreign financial accounts

OECD news

— Officials discuss OECD BEPS 2.0 Project

— OECD hosts public consultation on global anti-base erosion (GloBE) proposal under Pillar Two of BEPS 2.0 project

— OECD releases additional CbC guidance

— OECD releases seventh batch of peer review reports on BEPS Action 14

—————————————————————————
IRS Weekly Wrap-Up

Internal Revenue Bulletin

2020-02

Internal Revenue Bulletin of January 6, 2020

—————————————————————————
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: 2020-0051