U.S. Treasury and IRS Identify 2014-2015 International Tax Priorities
September 26, 2014
The U.S. Treasury and the Internal Revenue Service (IRS) have announced their Priority Guidance Plan for 2014–2015. This plan includes 41 separate projects concerning international issues. The international issues covered are transfer pricing, Subpart F income, inbound transactions, outbound transactions, foreign tax credits, sourcing and expense allocation, treaties, and other general topics.
The plan sets out the administrative guidance and regulations that the two agencies will issue related to 317 projects that are priorities for resource allocation for the twelve months from July 2014 to June 2015. The IRS and the Treasury’s Office of Tax Policy use the annual list to identify and put priorities on the tax issues the two agencies will address through regulations, revenue rulings and procedures, notices and other published guidance.
The Priority Guidance Plan is divided into the major areas of U.S. taxation, including international issues; consolidated returns; corporations and their shareholders; employee benefits; excise taxes; exempt organizations; financial institutions and products; general tax issues; gifts, estates and trusts; insurance companies and products; partnerships; subchapter S corporations; tax accounting; tax administration; and tax-exempt bonds.
The Annual Report on the Advance Pricing Agreement (APA) Program, and
The Advance Pricing and Mutual Agreement (APMA) Program.
Subpart F / Deferral
Foreign base company sales income and services income,
Loans to foreign partnerships and related issues,
Treatment of upfront payments on swaps, and
Withholding issues, and
Reporting requirements for 25% foreign-owned U.S. corporations and foreign corporations engaged in a U.S. trade or business — that is, filing IRS Form 5472, “Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business.”
Transfers of intangible property to foreign corporations,
Failure to file gain recognition agreements (GRAs) and other required filings,
Substantial business activities, and
Stock that is disregarded for purposes of measuring stock ownership.
Foreign Tax Credits (FTCs)
Overall foreign losses,
Separate application of the FTC limitation to income resourced under treaties,
Foreign tax redeterminations, and
FTC splitting events.
Sourcing and expense allocation
The character and source of income, including income arising in transactions involving intellectual property and digital goods and services.
U.S. tax treaties
Confidentiality of tax convention information, and
Procedures for requesting competent authority assistance.
Certain foreign currency transactions, including hedging, foreign financial asset reporting, foreign trust reporting, and entity classification.
The Priority Guidance Plan also includes an appendix with the regularly scheduled guidance that will be published during the 2014–2015 plan year.
More to come
The Treasury and the IRS jointly said they intend to update and republish the plan periodically during the year to reflect additional items and to report guidance that has been issued.
Copies of the plan are available on the IRS website at http://www.irs.gov/uac/Priority-Guidance-Plan.
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