Legislative Activity

“Corporate Integration” Proposal Delayed

As the House Ways and Means Committee continues moving forward with its international tax reform proposal, last week the Senate Finance Committee indicated that its “corporate integration” proposal has been delayed. The proposal, which would lower the effective rate for corporations by eliminating a double layer of taxation, is now potentially “a few months” away from being released, with Senate Finance Committee Orrin Hatch (R-UT) suggesting that his goal is to move forward with his plan on corporate integration by May. While Chairman Hatch noted that the Committee is still awaiting additional feedback from the Joint Committee on Taxation, senior staff last week suggested that the Committee is also continuing to examine design questions. Additionally, according to staff, the Committee may actually release a discussion draft of the proposal within “a few weeks,” not a few months as the Chairman suggested earlier in the week.

This Week’s Hearings:

• Tuesday, March 8: The Senate Appropriations Subcommittee on Financial Services and General Government will hold a hearing to examine the Treasury Department’s FY 2017 Budget Request.

Regulatory Activity

Treasury Expected to Release Final CbyCR Rules by July

Following up to the proposed country-by-country reporting (CbyCR) rules published last year, Deputy Assistant Secretary for International Tax Affairs Robert Stack last week indicated that the Treasury Department “fully expect[s]” to finalize the rules by June 30. According to Mr. Stack, if Treasury moves forward as expected, companies meeting the threshold level of sales would be required to file a report “for all tax years that begin after that date, including years beginning on July 1, 2016, and September 1, 2016.” Part of the reason for the expedited nature of the rules (with July 1 being six months earlier that the date in the proposed rules) is a result of pressure from other countries that the U.S. might delay the CbyCR requirements indefinitely if not finalized before the next Administration takes office in January 2017.  Relatedly, Mr. Stack also expressed that he is hopeful other countries will be flexible about the effective date of their respective rules.