December 23, 2020
U.S. International Tax This Week for December 23
Ernst & Young's U.S. International Tax This Week newsletter for the week ending December 23 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.
After months of negotiation, the House and Senate on 21 December approved the Consolidated Appropriations Act, 2021 (Act), a 5,593 page, $2.3 trillion spending and coronavirus stimulus package that now goes to President Trump to be signed into law. The President has indicated, however, that he supports a change to the coronavirus relief legislation and wants Congress to pass a new bill that would increase the stimulus payments from $600 in the current bill to $2000. It is not clear if the President is suggesting he may veto the original bill. At the time of publication of this newsletter, there are several possible legislative scenarios, depending on what action the President takes, or does not take.
As passed by Congress, the Act would provide roughly $900 billion in coronavirus relief, including many tax and health components, as well as a $1.4 trillion omnibus appropriations package to fund the Federal Government through September 2021. Among the highlights are $284 billion for another round of payments through the Paycheck Protection Program (PPP), a $300 per week federal unemployment benefit through 14 March 2021, and the previously mentioned $600 stimulus checks, as well as numerous other provisions.
The year-end bill also includes a significant “extenders” package addressing expiring tax provisions, making several provisions permanent and aligning others with the scheduled expiration of tax cuts under the Tax Cuts and Jobs Act (TCJA). Among the measures that would be extended through 2025 is the Controlled Foreign Corporation look-through rule.
The Organisation for Economic Co-operation and Development (OECD) on 18 December issued guidance on the transfer pricing implications of the COVID-19 pandemic. The guidance discusses the practical application of the arm’s-length principle as described in the OECD Transfer Pricing Guidelines to the issues and challenges related to the COVID-19 pandemic. According to the OECD, the guidance was developed and approved by the 137 member OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting. Four areas are covered in the latest guidance: comparability analysis; losses and the allocation of COVID-19 specific costs; government assistance programs; and advance pricing agreements.
Tax in a Time of Global Disruption (January 12)
During this Thought Center Webcast, Ernst & Young professionals will discuss some of the challenges and opportunities that are ahead of us all as we navigate tax in 2021 and beyond.
Latin America ‘nearshoring’ webcast series: Mexico session (January 13)
During this Thought Center Webcast, Ernst & Young professionals will provide information and help answer questions about nearshoring in Latin America.
Recent Tax Alerts
— Dec 22: Nigerian Government inaugurates task force on business permit and expatriate quota violations (Tax Alert 2020-2922)
Canada & Latin America
— Dec 22: Argentina imposes one-time extraordinary emergency contribution on individual's personal assets (Tax Alert 2020-2919)
— Dec 22: Czech Tax Authority issues guidance on selected DAC6 questions (Tax Alert 2020-2921)
— Dec 21: European Commission adopts new regulation regarding stricter Authorized Economic Operator compliance record criterion (Tax Alert 2020-2910)
— Dec 21: Italian Tax Authorities issue draft guidelines on Digital Services Tax for public consultation (Tax Alert 2020-2909)
— Dec 18: French Parliament approves Finance Bill for 2021 (Tax Alert 2020-2904)
— Dec 18: French Administrative Supreme Court expands its definition of a dependent agent constitutive of a permanent establishment (Tax Alert 2020-2905)
— Dec 18: OECD releases fourth peer review report on BEPS Action 5 on the Exchange of Information of Tax Rulings (Tax Alert 2020-2906)
— Dec 18: French Tax Authorities publish specifications for reporting of cross-border arrangements under DAC6 and MDR (Tax Alert 2020-2903)
— Dec 18: OECD's FTA hosts virtual meeting of tax administration leaders (Tax Alert 2020-2902)
IRS Weekly Wrap-Up
Internal Revenue Bulletin
| ||2020-52||Internal Revenue Bulletin of December 21, 2020|
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.