Ernst & Young ITTS Washington Dispatch

Senate Finance Tax Reform Working Group issues international tax reform report – Senior House Ways and Means Committee members release "innovation box" discussion draft – Senate Finance Committee approves "tax extenders" bill – US, Vietnam sign first-ever tax treaty – Treasury to issue international guidance in coming months – OECD holds final public consultation on BEPS Actions 8-10 on transfer pricing – Senate Finance Committee Chairman outlines BEPS concerns.

US international tax reform, repatriation considered to pay for Highway Trust Fund -- Congressional tax leaders express BEPS project concerns -- Bill introduced to close PFIC 'loophole' -- IRS issues final Section 7874 regulations; retains bright-line rule of SBAT -- IRS reiterates that principles of Notice 2012-39 retroactively apply to outbound F reorgs with CFC shareholder -- OECD releases discussion draft on hard-to-value intangibles under BEPS Action 8 -- OECD issues implementation package for CbC reporting under BEPS Action 13 – Seven more countries agree to Common Reporting Standard.

US Treasury proposes revisions to US Model Tax Treaty – Senate Finance Committee tax reform working groups deadline extended – US court disallows FTC claim under US-UK treaty for withholding tax on substitute dividend payments – DC Circuit rules retrocession agreements between foreign reinsurance companies not taxable under Section 4371 – PLR distinguishes broadcasting from motion pictures under royalties article in US tax treaty – IRS reiterates position that principles of Notice 2012-39 apply retroactively to outbound F reorg with CFC shareholder – OECD holds public consultations on Action 12 and Action 3 – OECD releases revised discussion draft on preventing artificial avoidance of PE status – OECD official takes aim at multinational tech companies.

Senate Finance Committee hearing on international tax reform reviews US patent box option – Finance Committee Chairman concerned over Obama Administration's international tax proposals – Senate report released on 'tax avoidance strategies' involving derivative contracts, financial products – Fifth Circuit overturns Tax Court in BMS Software – IRS will schedule pre-filing conferences for bilateral APAs with India – IRS finalizing revenue procedures for APA program, competent authority assistance – Treasury plans to release draft updates to US Model Tax Treaty – US officials offer insights on OECD Base Erosion and Profit Shifting project.

Obama Administration's FY 2016 Budget proposes major overhaul of US international tax system – IRS finalizes regulations under Section 909 foreign tax credit splitting events – IRS Chief Counsel memo addresses application of tax rate disparity test for foreign sales branches – IRS concludes US shareholder must increase E&P in year of Section 951(a)(1) inclusion – IRS releases competent authority agreement with Kazakhstan on treaty benefits for fiscally transparent entities – OECD addresses BEPS Actions 5, 13, and 15 – OECD holds public consultation on BEPS Action 4 on interest deductions and other financial payments.

President Obama, Republican Congressional leaders take out positions on tax reform debate -- US, India agree to framework to settle CA cases; APAs now possible -- IRS CCA 201501013 finds foreign fund engaged in US underwriting activities via US agent -- IRS launches FATCA International Data Exchange Service -- OECD holds public consultations on BEPS Actions 6, 7, and 14

Congress passes tax extenders legislation; gears up for tax reform debate -- Sen. Hatch releases "Comprehensive Tax Reform for 2015 and Beyond" -- IRS finalizes regulations on filing Form 5472 -- IRS offers FATCA relief for IGAs not yet signed -- Treasury grants another FBAR extension -- Treasury / IRS offers more thoughts on corporate inversions -- OECD releases 6 BEPS discussion drafts.

US midterm elections change tax landscape; extenders activity dominates tax agenda in lame duck -- IRS issues regulations on deficient GRAs; withdraws Directive for remedying incomplete GRAs -- IRS releases limited supplemental guidance on codified economic substance doctrine -- IRS rules back-to-back loans structured to avoid Section 956 -- OECD releases discussion draft on low value-adding intra-group services, public discussion draft on follow-up work on treaty abuse under BEPS Action 6.

Congress to return for lame-duck session; inversions and tax extenders legislation possible -- US Court of Claims lacks jurisdiction to hear taxpayer's refund claim regarding contested foreign taxes;claim not timely under statute of limitations pursuant to 'relation back doctrine'-- IRS releases additional guidance on economic substance -- US notifies 17 Model I jurisdictions of most favored nation option; Switzerland to negotiate Model 1 IGA.

Congress returned from August recess to debate corporate inversions, Treasury took action -- OECD releases 2014 output of BEPS Action Plan -- IRS CCA concludes accrued but unpaid interest constitutes an obligation of US person for Section 956 purposes -- IRS exempts certain holders of PFIC stock that is mark to market from Section 1298(f) filing