On October 7, 2019, the U.S. Department of the Treasury (Treasury) released its initial Priority Guidance Plan (PGP) for the year starting July 1, 2019 through June 30, 2020. The PGP (available here) puts forth guidance priorities for Treasury and for the Internal Revenue Service (IRS). Not surprisingly, the PGP puts highest priority on issuing additional regulatory guidance in association with the Tax Cuts and Jobs Act (TCJA).
The PGP includes several international tax and transfer pricing-related projects near the top of the list. Some of these projects have already been completed (such as the removal of Section 385 documentation requirement discussed elsewhere in this edition was announced on October 31) as of November 4, 2019.
Projects not yet completed include:
- Final regulations and other guidance under §59A concerning the base-erosion and anti-abuse tax (commonly referred to as “BEAT”). Proposed regulations were published on December 21, 2018. We understand that final regulations were provided to the Office of Management and Budget’s Office of Information and Regulatory Affairs in mid-September, so these regulations may be forthcoming any day.
- Final regulations and other guidance concerning the participation exemption system for the taxation of foreign source income under §§245A. Temporary and Proposed Regulations were published on June 18, 2019);
- Final regulations and other guidance under §250 regarding the deduction for foreign derived intangible income (commonly referred to as “FDII”) and global intangible low-taxed income (commonly referred to as “GILTI”). Proposed regulations were published on March 6, 2019.
- Regulations under §§367 and 482, including regulations addressing the changes to §§367(d) and 482 under the TCJA. Temporary and proposed regulations were published on September 16, 2015.
- Final regulations and other guidance on certain foreign tax credit issues arising under the TCJA under §§901 and 960, and related provisions, including §§78, 861, 904 and 905. Proposed regulations were published on December 7, 2018.
This plan may be subject to updating throughout the year as defined above. In any case, it is clear that Treasury and the IRS are giving a high priority to finalizing guidance on BEAT, FDII and GILTI. These provisions have been a significant area of focus for multinational taxpayers and for international tax and transfer pricing practitioners.
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