The Tax Executives Institute (TEI) has provided numerous comments re: Sec 965 positions as written in the law, supplemented by additional guidance.
Summary of comments:
- Cash position definition
- Foreign Tax Credit, double-counting of Earnings & Profits
- Dividends paid from a CFC to another CFC or a third party
- Hovering deficit taxes
- Stock basis election should be extended to 180 days, vs. 90 days per IRS guidance
- Changes in methods of accounting
- Anti-abuse rules
- CFC attribute mismatches
- Foreign tax credit adjustment
- “Applicable percentage” guidance
- Average FX rate, vs. year-end spot rate, used for measurement
- 2017 overpayments applied automatically to transition tax (Still an issue!)
- Penalty protection
The letter provides background and examples related to the comment areas, and should be reviewed to gain a further understanding of the complex dynamics that will hopefully be mitigated via the suggestions.
The latest US tax updates are summarized in EY’s Global Tax Alert, with a referenced link
- Tax Reform 2.0: House is moving forward with three separate bills, hoping at least one will pass, although Senate will not review prior to Nov. midterm elections
- GILTI: Additional rules re: interaction of Foreign Tax Credit and GILTI by Dec. 31, 2018 (It is hoped that the calculation of Sec. 163(j) interest limitations will be addressed re: application on a separate CFC basis, consolidated basis, or other method)
- GILTI: Final regulations June 2019
- IRS plans to establish separate webpages for the major international tax provisions enacted by the 2017 tax reform to provide informal taxpayer guidance. The webpages will follow a similar format that was adopted by the IRS to offer informal information regarding the TCJA’s transition tax.
- IRS: Restructuring the Advance Pricing and Mutual Agreement program (APMA) to consolidate resources and improve internal processes, including economists.
There is still significant uncertainty re: Sec. 965 repatriation tax, GILTI, FDII and BEAT provisions by taxpayers. It is hopeful that meaningful guidance will be issued shortly.