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09 February 2020

U.S. International Tax This Week for February 7

Ernst & Young's U.S. International Tax This Week newsletter for the week ending February 7 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

A senior Internal Revenue Service (IRS or Service) official this week provided further elaboration on the recent announcement by the Service offering limited relief from double taxation in regard to the IRC Section 965 transition tax. The official was quoted as saying that taxpayers should not interpret the announcement as meaning that the IRS plans to issue more guidance in this area or plans to revisit positions already taken by the government in released guidance. The official also said the limited relief being offered should not be seen as an “alternative forum where relief is provided elsewhere,” pointing to situations where competent authority relief is appropriate and available. Finally, the official said taxpayers should view the process as an informal inquiry, and not a formal process akin to a private letter ruling.

On that latter point, another IRS official this week was quoted as saying the Service will accept taxpayer requests for private letter rulings on determining the base erosion payment due under the IRC Section 59A Base Erosion and Anti-Abuse Tax (BEAT). The official added there is no timeline for the release of “informal” BEAT guidance, such as chief counsel advice or a revenue ruling, something that had earlier been floated by the IRS as a possibility. Final and proposed BEAT regulations were published in the Federal Register on 6 December 2019.

The final IRC Section 163(j) business interest deduction limitation regulations have been sent back to Treasury for final review by the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA). The final rules have been at OIRA for review since mid-December 2019 and sent back on 31 January. A Treasury Department official in January was quoted as saying that the final IRC Section 163(j) regulations would be released with newly proposed regulations that will address issues not covered by the coming final regulations. Those proposed regulations under IRC Section 163(j) have not been sent to OIRA for review.

The Singapore government on 6 February announced that the 2018 US-Singapore Tax Information Exchange Agreement will enter into force on 5 March. The Singapore government further announced that both the US and Singapore are working to conclude and sign the reciprocal FATCA Model 1 Intergovernmental Agreement and hope for it to take effect by the end of 2020. The new FATCA agreement will replace an existing non-reciprocal agreement.

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Upcoming Webcasts

International tax talk quarterly series with the EY Global Tax Desk Network (February 11)
During this Thought Center Webcast, Ernst & Young professionals will provide information on major tax law changes in the countries and jurisdictions covered by our US-based Global Tax Desk Network.

What to expect from India’s 2020 Union Budget (February 12)
During this Thought Center Webcast, Ernst & Young professionals will discuss the Union Budget was presented by the Finance Minister (FM) Nirmala Sitharaman in the Lok Sabha on 1 February 2020.

The outlook for global tax policy and controversy in 2020 (February 19)
During this Thought Center Webcast, Ernst & Young professionals will discuss the latest developments in Global tax and controversy policy, including (i) Corporate income tax trends in 2020; (ii) Ongoing BEPS and ATAD-related implementation efforts; (iii) OECD, European Commission, International Monetary Fund, World Bank and United Nations tax activity expected in 2020; (iv) Key tax enforcement trends and audit triggers around the world; and (v) Leading practices for companies in keeping up-to-date on tax policy and enforcement developments.

OECD BEPS 2.0 Update (February 25)
With Public Consultations for both Pillar One and Pillar Two recently held, the OECD continues to work on filling in details of the proposals and advance toward agreement. During this Thought Center Webcast, Ernst & Young professionals will discuss how the project is expected to develop, how countries are taking unilateral actions now, and how you can start preparing for changes in the tax landscape.

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Recent Tax Alerts

United States

Africa

Asia

Canada & Latin America

Europe

Middle East

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Recent Newsletters

Washington Dispatch
   Highlights of this edition include:

Treasury and IRS news

— US officials offer new insights in coming international guidance

— IRS final regulations on US partner contributions to partnerships with related foreign partners have few changes from prior temporary regulations

— Final FATCA and chapter 3 regulations issued

— IRS will consider certain requests for double taxation relief due to Section 965 repatriation

— IRS rules target’s capitalized transaction costs do not create a separate and distinct intangible asset

OECD news

— OECD announces renewed IF commitment for 2020 consensus on new international tax rules under BEPS 2.0

— OECD releases additional guidance on CbCR and summary of related notification requirements

— OECD releases third peer review report on Action 5 on the exchange of tax rulings

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IRS Weekly Wrap-Up

Internal Revenue Bulletin

 2020-07Internal Revenue Bulletin of February 10, 2020

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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: 2020-0322

 

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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