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July 19, 2020
2020-1819

U.S. Tax This Week for July 17

Ernst & Young's U.S. Tax This Week newsletter for the week ending July 17 is now available. Prepared by Ernst & Young's National Tax Department in Washington, D.C., this weekly update summarizes important news, cases, and other developments in U.S. taxation.

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Top of the Week

Final FDII regulations retain proposed regulations' structure, but reduce documentation burden, defer effective date and make important substantive changes to the computation of the IRC Section 250 deduction

On July 9, 2020, the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) released final regulations under Internal Revenue CodeSection 250 (Treasury Decision 9901) for calculating the deduction allowed to a domestic corporation for its foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI). The final regulations are scheduled for publication in the Federal Register on July 15, 2020. EY Tax Alert 2020-1795 has details.

IRS is now sending letters to businesses experiencing delays with advance payment of COVID-19 employer tax credits

The IRS announced that employers experiencing a delay in the processing of their Form 7200, Advance Payment of Employer Credits Due To COVID-19 will begin receiving letters explaining the cause. EY Tax Alert 2020-1812 has details.

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Upcoming Webcasts

Final Treasury regulations under Section 250 | Corporate deductions for FDII and GILTI (July 20)
During this Thought Center Webcast, Ernst & Young professionals will discuss relevant aspects of the final regulations.

US corporate income tax compliance (July 21)
During this Thought Center Webcast, Ernst & Young professionals will discuss how your company can continue to navigate the complexity and challenges of the CARES Act and TCJA compliance, while preparing for tax year 2019 (TY19) and tax year 2020 (TY20).

Teleworker tax implications for COVID-19 and beyond (July 28)
During this Thought Center Webcast, Ernst & Young professionals will help you identify the tax implications of telework arrangements.

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Recent Tax Alerts

Internal Revenue Service

— Jul 16: IRS extends deadline to December 31, 2020, for hospital organizations to comply with Community Health Needs Assessment requirements (Tax Alert 2020-1818)

— Jul 16: IRS gives defined compensation plan participants and IRA owners a chance to roll back RMDs (Tax Alert 2020-1817)

— Jul 16: IRS is now sending letters to businesses experiencing delays with advance payment of COVID-19 employer tax credits (Tax Alert 2020-1812)

— Jul 15: New report analyzes 2017 community benefits of tax-exempt hospitals (Tax Alert 2020-1805)

— Jul 15: IRS releases guidance on mid-year reductions and suspensions of contributions to safe harbor 401(k) and 403(b) plans (Tax Alert 2020-1804)

— Jul 15: IRS issues final regulations reducing PTIN user fees (Tax Alert 2020-1799)

— Jul 15: IRS postpones deadline for performing community health needs assessment requirements until December 31, 2020 (Tax Alert 2020-1797)

— Jul 14: Final FDII regulations retain proposed regulations' structure, but reduce documentation burden, defer effective date and make important substantive changes to the computation of the IRC Section 250 deduction (Tax Alert 2020-1795)

— Jul 10: Proposed regulations address use of life and nonlife insurance company losses in consolidation (Tax Alert 2020-1775)

— Jul 10: IRS announces new IRC Section 965 transition tax campaign to focus on individuals (Tax Alert 2020-1773)

— Jul 10: IRS releases BBA Roadmap to guide partnerships through centralized audit process (Tax Alert 2020-1772)

International

— Jul 16: Greece publishes draft proposal to implement Mandatory Disclosure Rules (Tax Alert 2020-1816)

— Jul 16: European Commission adopts package for fair and simple taxation (Tax Alert 2020-1815)

— Jul 16: US imposes new economic sanctions related to China and issues Executive Order on Hong Kong normalization status that will produce additional supply chain diligence responsibilities (Tax Alert 2020-1814)

— Jul 16: European Commission publishes new rules for applying tariff quota in agricultural sector as of 1 January 2021 (Tax Alert 2020-1813)

— Jul 16: EU-Vietnam Free Trade Agreement enters into force as of 1 August 2020 (Tax Alert 2020-1807)

— Jul 15: UK Government releases guidance on moving goods between the EU and Great Britain as of 1 January 2021 (Tax Alert 2020-1803)

— Jul 15: Hong Kong enacts tax concession legislation for ship lessors and ship leasing managers (Tax Alert 2020-1802)

— Jul 15: European Court of Justice rules royalty paid for know-how required for manufacture of finished products in the EU may need to be added to customs value of imported semi-finished products (Tax Alert 2020-1801)

— Jul 15: OECD releases new corporate tax statistics including anonymized and aggregated Country-by-Country report statistics (Tax Alert 2020-1800)

— Jul 14: European Commission publishes communication on Brexit readiness (Tax Alert 2020-1794)

— Jul 14: Vietnam implements taxation of digital transactions (Tax Alert 2020-1793)

— Jul 13: Netherlands | Opposition party proposes inclusion of an exit tax in the Dutch Dividend Withholding Tax Act (Tax Alert 2020-1786)

— Jul 13: Saudi Arabia exempts investment of oil and hydrocarbon producing companies into Saudi-listed companies (Tax Alert 2020-1785)

— Jul 13: USTR formalizes duty actions regarding France's Digital Services Tax with deferred implementation to 2021 (Tax Alert 2020-1784)

— Jul 13: Liechtenstein and Netherlands sign tax treaty (Tax Alert 2020-1783)

— Jul 13: USTR announces delayed tariffs on French goods (Tax Alert 2020-1778)

— Jul 13: Chile ratifies Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (Tax Alert 2020-1777)

— Jul 10: COVID-19 and US CARES Act implications on interim filings under IFRS (Tax Alert 2020-1771)

— Jul 10: Spain proposes amendments to MDR Bill to introduce extension of MDR filing deadlines (Tax Alert 2020-1770)

— Jul 10: US Government suspends defense exports and EAR export license exceptions for exports to Hong Kong (Tax Alert 2020-1769)

— Jul 10: Oman Tax Authority announces initiatives to reduce economic impact of COVID-19 for businesses (Tax Alert 2020-1768)

— Jul 10: Cape Verde amends certain tax regimes and introduces Country-by-Country Reporting (Tax Alert 2020-1767)

Legislation

— Jul 16: Treasury awards $3.5 billion in 2020 round of New Markets Tax Credit program (Tax Alert 2020-1809)

— Jul 16: What to expect in Washington (July 16) (Tax Alert 2020-1808)

— Jul 14: Congress makes it easier for nonprofit and governmental employers to receive a 50% reduction in COVID-19 UI benefit claim charges (Tax Alert 2020-1792)

— Jul 10: Biden outlines plan to spend hundreds of billions on US manufacturing, refocus trade strategy on US workers (Tax Alert 2020-1765)

States

— Jul 16: EY's state guide to COVID-19 payroll and employment tax provisions is updated through July 8, 2020 (Tax Alert 2020-1811)

— Jul 16: Louisiana electronic withholding tax filing deadline extended due to electronic system issues (Tax Alert 2020-1810)

— Jul 15: North Dakota reinstates requirement for individuals to register and search for work while collecting UI benefits (Tax Alert 2020-1798)

— Jul 13: Wisconsin employers must file form for relief from charges for COVID-19 UI benefits (Tax Alert 2020-1787)

— Jul 10: Employee Retention Credits present challenges (Tax Alert 2020-1774)

— Jul 10: New York will continue with incrementally reducing certain state income tax rates that began in 2018 (Tax Alert 2020-1766)

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Recent Newsletters

State and Local Tax Weekly
   Highlights of this edition include:

— California enacts 2020–2022 NOL suspension and business tax credit limitation. On June 29, 2020, California Governor Newsom signed AB 85 (Cal. Laws 2020, ch. 8) which temporarily suspends the use of California net operating losses (NOLs) and imposes a cap on the annual amount of business incentive tax credits companies can utilize against their net income.

— COVID-19, Income/Franchise, Sales & Use, Business Incentives, Controversy, Payroll & Employment Tax, Global Trade, Value Added Tax, Upcoming Webcasts

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IRS Weekly Wrap-Up

Final Regulations

 TD 9901Deduction for Foreign-Derived Intangible Income and Global Intangible Low-Taxed Income
 TD 9903Preparer Tax Identification Number (PTIN) User Fee Update

Proposed Regulations

 REG-130081-19Employee Benefits Security Administration
 REG-113295-18Effect of Section 67(g) on Trusts and Estates; Hearing

Notices

 2020-56Additional Relief with Respect to Deadlines under Section 501(r)(3) Applicable to Hospital Organizations Affected by the Ongoing Coronavirus Disease 2019 Pandemic
 2020-57Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates

Internal Revenue Bulletin

 2020-29Internal Revenue Bulletin of July 13, 2020

Because the matters covered herein are complicated, U.S. 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.

 

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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