The IRS has added and modified several international guidance projects in the 2016‒2017 Priority Guidance Plan.
The annual guidance plan presents a list of tax topics that Treasury and the IRS plan to actively address through regulations, revenue rulings and other published guidance over a 12-month period. The 2016‒2017 Priority Guidance Plan covers July 2016 through June 2017, and most of the listed projects are carried over from the 2015‒2016 Priority Guidance Plan (as updated quarterly).
The notable changes in the international area include the following:
The scope of planned guidance under Section 954(c) was expanded to include the active rents and royalties exception. See Grant Thornton’s discussion of temporary regulations concerning the active rents and royalties exception:
The scope of planned guidance under Section 954 was expanded to include the use of foreign statement reserves for purposes of measuring qualified insurance income under Section 954(i).
The following projects are new to the 2016‒2017 plan:
- Regulations under Sections 897 and 1445 relating to changes in the Protecting Americans from Tax Hikes Act of 2015 (i.e., the Foreign Investment in Real Property Tax Act)
- Guidance on the procedures for U.S. persons that are ultimate parent entities of multinational enterprise groups to voluntarily report certain information on a tax jurisdiction-by-tax jurisdiction basis for reporting periods beginning after Jan. 1, 2016, and before the applicability of Treas. Reg. Sec. 1.6038-4 (i.e., country-by-country reporting)
- Regulations under Section 1256(g)(2) regarding the definition of a foreign currency contract in light of the decision in Wright v. Commissioner, 809 F.3d 877 (6th Cir. 2016)
- Guidance on transfers of property to partnerships with related foreign partners and controlled transactions involving partnerships
The following projects that were included in the 2015‒2016 plan are not included in the 2016‒2017 plan.
- Proposed regulations under Section 6038C on information with respect to foreign corporations engaged in a U.S. trade or business. See Grant Thornton’s coverage.
- A revenue procedure updating Revenue Procedure 2006-9, as amended by Revenue Procedure 2008-31, on the Advance Pricing and Mutual Agreement Program.
- Revenue procedure updating Revenue Procedure 2006-54 on procedures for taxpayers requesting Competent Authority assistance.
- Regulations under Sections 6011 and 6038 on country-by-country reporting of income, earnings, taxes paid and certain economic activity for transfer pricing risk assessment. See Grant Thornton’s BEPS alert.
- Final regulations under Section 6038D on domestic entities holding specified foreign financial assets. See Grant Thornton’s alert.
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