Ernst & Young Its Washington Dispatch

The Ernst & Young ITS Washington Dispatch brings you a monthly review of US international tax-related developments. In this edition: US Congress passes coronavirus stimulus and omnibus spending package, including extension of CFC look-through – IRS issues final and proposed PFIC regulations – Treasury to focus on other international projects, tax treaties as TCJA guidance nears completion – Treasury’s FinCEN further extends certain FBAR signature authority reporting over foreign financial accounts – IRS will continue ICAP joint risk assessment initiative – US transfer pricing enforcement remains priority while TCJA provisions may negate adjustments – IRS APMA seeing more queries on transfer pricing consequences of coronavirus pandemic – BEPS 2.0 Pillar One and Two comment period closes; public consultation set for 14-15 January 2021 – OECD issues guidance on transfer pricing implications of COVID-19, hard-to-value intangibles – OECD releases fourth peer review report on BEPS Action 5 on Exchange of Inform

The Ernst & Young ITS Washington Dispatch brings you a monthly review of US international tax-related developments. In this edition: Major policy changes expected following US November election – Treasury and IRS finalize regulations to reduce double taxation caused by anti-abuse rules on GILTI gap period – IRS officials provide international regulatory update – US, Mexico renew competent authority agreement on unilateral APAs for maquiladoras – IRS updates list of jurisdictions for automatic exchange of CbC reports – IRS reviewing stock-based compensation in cost-sharing context – OECD to hold virtual public consultation on BEPS 2.0 Pillar 1 and Pillar 2 in mid-January 2021 – OECD releases Consultation Document on 2020 review of BEPS Action 14 – OECD releases 2019 mutual agreement procedure statistics, 2019 mutual agreement procedure awards –  OECD releases report on taxing virtual currencies.

The Ernst & Young ITS Washington Dispatch brings you a monthly review of US international tax-related developments. In this edition: OECD releases BEPS 2.0 Pillar 1 and Pillar 2 blueprints, invites public comments – UN releases new proposed treaty article on digital taxes – Final rules under Section 1446(f) address W/H on transfers of partnership interests – IRS concludes Section 704(c) anti-abuse rule triggered in asset contribution to foreign partnership – IRS confirms some modifications to debt instruments, other contracts to reflect LIBOR discontinuation will not result in deemed taxable exchange – IRS ‘practice unit’ offers exam guidance on inclusion of stock-based compensation in CSAs – IRS to limit use of ‘telescoping’ in APA and MAP cases – IRS will consider amending existing APAs to reflect COVID-19 economic conditions.

The Ernst & Young ITS Washington Dispatch brings you a monthly review of US international tax-related developments. In this edition: Final BEAT regulations adopt proposed BEAT guidance with some changes − New final and newly proposed foreign tax credit regulations released − Treasury issues final sourcing regulations on sales of personal property (including inventory) − IRS releases final and proposed regulations re repeal of Section 958(b)(4) − IRS issues final regs on characterization of foreign persons’ gain or loss from sale / exchange of interests in partnerships engaged in US trade or business − Final Section 163(j) regulations generally applicable tax years on / after 13 November 2020 − IRS delays certain Section 987 FX regulations for additional year − Notice 2020-69 provides rules on entity treatment election for certain S corporations re GILTI in AAA inclusions − Final BEPS 2.0 Pillar 1 and 2 blueprints to be published 12 October 2020 − OECD releases third phase of peer reviews on BEPS Action 13

The Ernst & Young ITS Washington Dispatch brings you a monthly review of US international tax-related developments. In this edition: IRS finalizes Section 245A DRD anti-abuse regulations with few changes – Treasury and IRS propose complex, taxpayer-favorable regulations to reduce possibility of double taxation caused by anti-abuse rules during GILTI gap period – US, Swiss competent authorities reach agreement on treaty arbitration process – UN Tax Committee issues proposal for taxing digital services income.

The Ernst & Young ITS Washington Dispatch brings you a monthly review of US international tax-related developments. In this edition: IRS issues final and proposed interest expense limitation regulations – Final and proposed GILTI regulations deliver few benefits, some surprises – IRS releases final regulations under Section 250 for computing FDII and GILTI deduction – IRS releases new draft partnership Schedules K-2 and K-3 for international tax reporting – US announces action against France’s DST – G20 Finance Ministers / Central Bank Governors reiterate commitment to BEPS 2.0 pillars – OECD releases new corporate tax data including CbCR statistics – OECD issues model rules for data reporting by platform operators for sellers in sharing / gig economy.  

The Ernst & Young ITS Washington Dispatch brings you a monthly review of US international tax-related developments. In this edition: US Supreme Court declines to hear Altera case – US Treasury Secretary calls for ‘pause’ in BEPS 2.0 Pillar 1 discussions – USTR initiates investigations into implemented / proposed DSTs in 10 jurisdictions – IRS LB&I official offers insights to TCJA compliance campaign – IRS seeks 2020-2021 Priority Guidance Plan recommendations – OECD releases toolkit on taxation of offshore indirect transfers of assets – OECD circulates COVID-19 transfer pricing survey to BIAC members.

The Ernst & Young ITS Washington Dispatch brings you a monthly review of US international tax-related developments. In this edition: Congress considers further action to address coronavirus pandemic – IRS finalizes proposed Section 385 regulations with no substantive changes, leaves distribution rules in effect – Treasury and IRS announce references to NAFTA in US tax treaties should be interpreted as references to USMCA – IRS offers limited relief for filing Forms 8858 or 8865 – IRS announces modifications for filing APA and MAP requests, addresses pending and executed APAs –  New refocusing on BEPS, OECD official says – OECD holds public consultation on 2020 review of CbCR – OECD hosts webcast offering update on tax work during COVID-19 crisis; July IF meeting delayed to October 2020.

The Ernst & Young ITS Washington Dispatch brings you a monthly review of US international tax-related developments. In this edition: President Trump signs interim coronavirus relief measure; attention turns to COV’ID-19 bill #4 – IRS issues final and proposed regulations on hybrid mismatches, DCLs and conduit financing – IRS regulations include new anti-abuse rule targeting certain ‘GILTI gap period’ transactions – Taxpayers need to consider international tax implications of making certain NOL elections under Rev. Proc. 2020-24 – IRS issues FAQs on interaction of NOL carrybacks and Section 965 inclusions – IRS announces taxpayers can temporarily fax Forms 1139 and 1045 to claim NOL carrybacks and AMT credits under CARES Act – IRS provides relief for potential tax consequences caused by COVID-19 travel restrictions – IRS withdraws 2004 Notice on ‘Midco’ transactions – IRS releases FAQs on transfer pricing documentation best practices – IRS issues annual APA report for 2019 – IRS updates FATCA FAQs – OECD B

The Ernst & Young ITS Washington Dispatch brings you a monthly review of US international tax-related developments. In this edition: US CARES Act stimulus package to address COVID-19 has international tax implications – IRS expands 15 April tax relief and issues FAQs on extension of filing and payment deadlines, FATCA reporting – IRS issues final Section 901(m) regulations – TIGTA finds major FIRPTA withholding discrepancies – Alignment of transfer pricing regulations to TCJA provisions in relation to IP definition not expected before 2021 – OECD plans to continue BEPS 2.0 project virtually – OECD releases second annual peer review report on BEPS Action 6, prevention of treaty abuse – OECD releases CbCR comments.

The Ernst & Young ITS Washington Dispatch brings you a monthly review of US international tax-related developments. In this edition: US Treasury Secretary confirms DST deal with France – All major TCJA guidance expected by October 2020 – Pending US tax treaties with Chile, Hungary and Poland may require renegotiation over BEAT – IRS officials elaborate on limited Section 965 transition relief, BEAT PLR option – Altera files for certiorari in US Supreme Court in cost sharing case – OECD on track to complete BEPS 2.0 core principles in 2020 -- OECD offers tax revenue estimates for BEPS 2.0 proposals – OECD issues CbCR consultation document – OECD issues transfer pricing guidance for financial transactions – OECD offers draft model rules on platform operators for ‘sharing’ and ‘gig’ economy – OECD releases eight batch of peer review reports on BEPS Action 14.

The Ernst & Young ITS Washington Dispatch brings you a monthly review of US international tax-related developments. In this edition: US officials offer new insights for coming international tax guidance – IRS releases final regulations on US partner contributions to partnerships with related foreign partners – Final FATCA and chapter 3 regulations issued – IRS will entertain cryptocurrency PLRs – 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 announces renewed IF commitment for 2020 consensus on new international tax rules under BEPS 2.0 – OECD releases additional guidance on CbCR, summary of related notification requirements – OECD releases third peer review report on Action 5 on the exchange of tax rulings.

In this edition: US releases USTR findings re France’s DST – US issues final and proposed BEAT regulations – IRS issues final and proposed FTC regulations – IRS issues final W/H and reporting regulations – IRS issues final Section 871(m) regulations on dividend equivalent payments, extends transition relief – IRS issues proposed regs on sourcing income from sales of certain personal property – IRS again  delays certain Section 987 FX regulations – Treasury grants another FBAR extension – Officials discuss OECD BEPS 2.0 Project – OECD hosts Pillar 2 GloBE public consultation – OECD releases additional CbC guidance – OECD releases BEPS Action 14 peer review reports.

The Ernst & Young ITS Washington Dispatch brings you a monthly review of US international tax-related developments. In this edition: OECD issues consultation document on technical design of Pillar Two – IRS issues final regulations on ownership attribution rules for CFC purposes – IRS announces Section 965 transition tax compliance campaign – Treasury officials offer TJCA international guidance timeline – Ninth Circuit denies en banc rehearing in Altera – US government aware transfer pricing may be used to reduce TJCA tax liability – Cyprus announces coming bilateral CbCR Competent Authority Agreement with US – OECD holds public consultation on Pillar One – OECD releases ADIMA database with global MNE profiles – OECD releases more guidance on spontaneous exchange of information by no or nominal tax jurisdictions – OECD releases additional guidance on CbC Reporting, summary of common MNE errors.

The Ernst & Young ITS Washington Dispatch brings you a monthly review of US international tax-related developments. In this edition: OECD releases BEPS 2.0 Pillar One ‘unified approach’ – Treasury issues final regulations removing Section 385 documentation requirements, notice of proposed rulemaking for treating some interests as debt – IRS announces taxpayers can still rely on expired temporary Section 385 recharacterization rules – IRS issues proposed regulations and Rev. Proc. 2019-40 on repeal of Section 958(b)(4) – IRS proposed rules address tax consequences of elimination of LIBOR, other interbank offered rates – New US cryptocurrency tax guidance addresses some open questions, leaves others unanswered -- IRS CCA concludes 952(c) election to include otherwise excludible insurance income in subpart F income of CFCs’ US shareholders is obsolete – OECD releases sixth batch of peer review reports on BEPS Action 14.

The Ernst & Young ITS Washington Dispatch brings you a monthly review of US international tax-related developments. In this edition: US Treasury announces entry-into-force for protocols with Japan, Spain, Luxembourg, and Switzerland – IRS issues proposed Section 382(h) regulations on built-in gains and losses – International TJCA guidance expected in fall – IRS reconsidering Form 1120-F nonfiler compliance campaign – OECD releases second phase BEPS Action 13 peer review – OECD holds first Tax Certainty Day, releases 2018 MAP statistics.

The Ernst & Young ITS Washington Dispatch brings you a monthly review of US international tax-related developments. In this edition: IRS issues proposed rules on cloud-based, other digital transactions – French President Macron comments on new Digital Services Tax – IRS increase cryptocurrency enforcement efforts – IRS will allow domestic partnerships, S corps to apply proposed GILTI regulations before 22 June 2019 – US Circuit Court of Appeals affirms Tax Court’s decision in Amazon case – IRS withdraws “Altera Memo” Directive on cost-sharing arrangement stock-based compensation – OECD releases US Stage 2 peer review on BEPS Action 14 minimum standard.

US Senate approves amending tax protocols with Luxembourg, Switzerland, Japan and Spain – US considers retaliation against France’s new DST – IRS issues proposed PFIC regulations – IRS releases final regulations for allocating partnerships’ creditable foreign tax expenditures – IRS sending warning letters to virtual currency owners – IRS issues information on Section 965 filing and payment – Altera Corporation files petition for rehearing of cost sharing case in Ninth Circuit

Temporary and proposed DRD regulations reflect GILTI-centric view of TCJA’s international tax rules – US government issues final and proposed GILTI and subpart F regulations – IRS issues proposed regulations under Sections 954 and 958; consequences for subpart F and GILTI regimes – IRS issues proposed regulations on FIRPTA tax exception for foreign pension funds’ interests in US real property – DC Circuit affirms Grecian Magnesite Mining – Ninth Circuit again reverses Tax Court in Altera cost sharing case – US Senate Foreign Relations Committee reports out tax protocols to treaties with Japan, Luxembourg, Spain and Switzerland – OECD digital workplan envisions global agreement on new rules for multinational taxation – G20 Finance Ministers and Central Bank Governors welcome progress on addressing tax challenges from digitalization

IRS releases final Section 956 regulations, generally follow proposed rules with two major modifications – IRS finalizes certain temporary FX regulations – IRS proposed regulations under Section 1446(f) clarify scope of W/H on transfers of partnership interests – EC comments on US FDII proposed regulations – US reiterates opposition to unilateral digital proposals – Puerto Rico, USVI developments highlighted