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September 13, 2020

U.S. International Tax This Week for September 11

Ernst & Young's U.S. International Tax This Week newsletter for the week ending September 11 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.


Treasury on 3 September announced that the IRC Section 163(j) final regulations (TD 9905) that were released in July 2020, will be published on 14 September. Based on the expected publication date in the Federal Register, the final regulations are generally expected to be applicable to tax years beginning on or after 13 November. Therefore, for a calendar year taxpayer, the final rules generally would be effective for tax years beginning 1 January 2021.

Taxpayers may choose to apply the final regulations to a tax year beginning after 31 December 2017 and before the effective date of the final regulations. In that case, however, the taxpayer must consistently apply the rules under the IRC Section 163(j) regulations, and if applicable, the final regulations modifying other regulation provisions set forth in TD 9905 (for example, Reg. Section 1.263A-9) to that tax year. Note that different applicability dates may apply with respect to anti-avoidance rules, and each section has its own specific provisions with respect to applicability dates that should be reviewed when determining applicability dates based on the taxpayer's particular facts and circumstances.

On the international front, the tax press this week quoted the French Finance Minister as saying that the US is hindering progress in regard to the BEPS 2.0 negotiations. Finance Minister Bruno Le Maire reportedly said on 9 September that he believes the US Government does not want agreement on a Pillar 1 proposal and therefore the European Union should move forward with its own alternative digital tax proposal in the first quarter of 2021.

The OECD expects to have blueprints of proposals for both Pillar 1 and Pillar 2 of the BEPS 2.0 project ready by October 2020. In the meantime, a number of countries have already moved forward to enact their own digital tax proposals.

Upcoming Webcasts

International tax talk quarterly series with the EY Global Tax Desk Network (September 15)
In an environment defined by continuous global change and shifting paradigms, multinationals are having to evaluate their global supply chains. COVID-19 supply interruptions, trade policy uncertainty, the evolving geopolitical landscape, and increasing customer and consumer demands are creating new risks. During this Thought Center Webcast, Ernst & Young professionals will discuss how organizations can address these business challenges and manage their global tax profile amid disruption, with a focus on ASEAN and India.

Recent Tax Alerts

Canada & Latin America

— Sep 10: EY Canada's Tax Matters @ EY for September 2020 (Tax Alert 2020-2211)

— Sep 10: PE Watch: Latest developments and trends, September 2020 (Tax Alert 2020-2210)

— Sep 09: Chile enacts new COVID-19 tax incentives package (Tax Alert 2020-2202)

— Sep 08: Ecuador requires certain taxpayers to pay all estimated income taxes for tax year 2020 by September 11, 2020 (Tax Alert 2020-2186)


— Sep 09: Cyprus' Tax Authority issues clarification note regarding bilateral CAA with US (Tax Alert 2020-2199)

— Sep 09: Cyprus and Russia sign the Protocol to amend double tax treaty (Tax Alert 2020-2198)

— Sep 09: Poland announces amendments to withholding tax reform (Tax Alert 2020-2197)

— Sep 09: Poland announces bill to amend corporate income tax rules (Tax Alert 2020-2196)

— Sep 08: UK releases new technical guidance for manufacturers (Tax Alert 2020-2184)

Middle East

— Sep 08: UAE updates Economic Substance Regulations (Tax Alert 2020-2185)

IRS Weekly Wrap-Up

Internal Revenue Bulletin

 2020-37Internal Revenue Bulletin of September 8, 2020
 2020-38Internal Revenue Bulletin of September 14, 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.