In this episode, our ITS team reviews the escalating tensions between the US and France, related to the trade investigations into France’s Digital Services.
Duration 23m 40s
This edition of the ITS Washington Dispatch for December begins with a review of the escalating tensions between the US and France, related to the trade investigations into France’s Digital Services Tax and the recommended tariffs to be implemented should no deal be reached.
From there, it covers a wide range of new regulations issued by the IRS on BEAT, Foreign Tax Credits and Section 871(m) related to dividend equivalent payments, before confirming the delay of finalized Section 987 regulations for another year.
It then summarizes the latest from the OECD including the BEPS 2.0 Project, consultation on Pillar 2 and new CbC guidance.
This EY monthly update begins with the results of the findings in the trade investigations into France’s Digital Services Tax, and how it creates an unreasonable or discriminatory burden on US commerce. The report recommends a tariff is imposed on US$2.4 billion of France goods, while President Trump remains hopeful that an agreement can be reached.
Much of the update then focuses on finalized regulations from the IRS. The first was the release of regulations on the Base Erosion and Anti-Abuse Tax (BEAT), with final regulations including an exception for specified non-recognition transactions under sections 332, 351, 355 and 368 that should allow for more transactions to occur without triggering BEAT.
Other regulations were released on determining allowable Foreign Tax Credits, with guidance on many open questions about the FTC regime post-tax reform. There were also final regulations under Section 871(m) with notice that transition relief under 2018-72 has been extended for a further two years.
Further guidance from the IRS included proposed regulations on determining the source of income with regards sales of inventory of products manufactured in the US and sold outside the US, or vice-versa, as well as modifying other rules in this area.
Additionally, the IRS delayed final regulations on Section 987 by another year, as it has been identified as a significant tax regulation that requires further review. Other updates covered include OECD’s BEPS 2.0 Project and CbC guidance.
- Learning about the escalating tensions between the US and France regarding DST
- Understanding the latest wave of regulations issued by the IRS including BEAT and FTC, and the delays into finalized regulations on Section 987 and the causes and impacts
- Finding out the updates on OECD projects including BEPS 2.0 and Pillar 2, as well as new guidance on CbC
In this seriesSeries overview