International Tax Services Washington Dispatch, December 2019

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. 

Related topics Tax

Podcast

Episode 4

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 outcomes

  • 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 series

Series overview
(Event List - Manual)

International Tax Services Washington Dispatch, March 2020

In this episode, our ITS team summarizes key developments in the US for the month including the response to the COVID-19 pandemic.
Podcast

Episode 1

Duration
13m 49s

Presenters

International Tax Services Washington Dispatch, February 2020

In this episode, our ITS team details the confirmation that the US and France have agreed to de-escalate tensions over France’s DST.
Podcast

Episode 2

Duration
13m 30s

Presenters

International Tax Services Washington Dispatch, January 2020

In this episode, our ITS team provides a review of major US and international tax related news for the month of January 2020.
Podcast

Episode 3

Duration
16m 38s

Presenters

International Tax Services Washington Dispatch, December 2019

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.
Podcast

Episode 4

Duration
23m 40s

Presenters

International Tax Services Washington Dispatch, November 2019

In this episode, our ITS team focuses on the OECD’s public consultation document on Pillar Two of the global anti-base erosion proposal.
Podcast

Episode 5

Duration
15m 24s

Presenters

International Tax Services Washington Dispatch, October 2019

In this episode, our ITS team looks at the OECD public consultation document regarding Pillar One of the BEPS 2.0 project.
Podcast

Episode 6

Duration
20m 52s

Presenters

International Tax Services Washington Dispatch, September 2019

In this episode, our ITS team looks at the entry-into-force dates of tax protocols between the US and Japan, Spain, Luxembourg and Switzerland.
Podcast

Episode 7

Duration
13m 57s

Presenters

International Tax Services Washington Dispatch, August 2019

In this episode, our ITS team focuses on digital tax issues, the digital revolution, and the tax implications of a digital system.
Podcast

Episode 8

Duration
16m 13s

Presenters