EBF advisor: Roger Kaiser
Publication date: 19 February 2019
Executive summary
As part of the 2017 US Tax Reform, a Base Erosion and Anti-Abuse Tax (BEAT) was introduced in the Internal Revenue Code under Section 59A with the aim to combat eroding of US tax base through related-party payments of interest, royalties and management fees. The Internal Revenue Service (IRS) issued proposed Regulations on BEAT mid-December 2018 with a consultation period of two months. On 19 February 2019, the EBF presented the US Treasury with a comment letter emphasizing the detrimental effects of BEAT for European banks. The EBF points out in particular that the exception for interest paid on intercompany funding held in the U.S., which is a welcomed relief for interest paid on certain total loss-absorbing capacity (TLAC) securities, does not extend to similar securities issued by non-U.S. corporations nor does it capture other regulatory-driven funding. In addition, the BEAT applies to a portion of the interest expense that is attributed by a foreign bank to its U.S. branch in accordance to U.S. tax regulations and treaties.
EBF contact:
Roger Kaiser, Senior Policy Adviser Tax & Crime, r.kaiser@ebf.eu, +32 2 508 37 11
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The post Regulations on the US Base Erosion and Anti-Abuse Tax – EBF comments appeared first on EBF.
]]>Publication date: 26 August 2016
Dear Mr Sweeney, dear Ms Perkins,
I am writing to you as Chief Executive of the European Banking Federation (EBF), which is the voice of European banks.
Our members highlight below some technical and practical issues in delivering the requirements of the proposed QI Agreement and would like to make some suggestions for your consideration as to how these issues can be resolved to the benefit of both Financial Institutions and the IRS.
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The post EBF letter to IRS regarding technical issues in complying with the proposed QI Agreement (IRS Notice 2016-42) appeared first on EBF.
]]>Publication date: 26 August 2016
Dear Mr Stack,
Dear Mr Sweeney,
I am writing to you as Chief Executive of the European Banking Federation (EBF) which is the voice of the European banking sector and uniting 32 national banking associations in Europe that together represent some 4,500 banks – large and small, wholesale and retail, local and international – employing about 2.5 million people.
The present letter expresses our views and concerns about several aspects of regulations issued by the U.S. Department of the Treasury and the U.S. Internal Revenue Service on 17 September 2015 under Section 871(m) of the U.S. Internal Revenue Code1 as well as related provisions set out in IRS Notice 2016-42 pertaining to the Proposed Qualify Intermediary Agreement (these regulations and provisions are hereinafter collectively referred to as the “Regulations”). The present letter notably elaborates on certain open issues regarding the treatment of dividend equivalent payments under applicable income tax treaties and related legal issues that may arise from the perspective of non-U.S. withholding agents under their respective domestic legislation. This letter also offers some high-level comments with respect to the timeframe currently contemplated for the implementation of the Regulations and the flow of information required for the correct application of the related withholding tax by withholding agents along with suggested ways to accommodate the resulting challenges in a more effective way while still meeting the policy objectives of the Regulations. Additional technical comments related to IRS Notice 2016-42 will be submitted in a separate letter. These shall not detract from the representations made in the present letter.
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Every Friday at noon you can receive the EBF Weekly + Financial Regulation Agenda. This agenda presents an overview of upcoming European and international meetings and conferences in financial regulation, as well as important general financial and economic events and key EBF meetings for the week ahead. CLICK HERE TO SUBSCRIBE
Subscribe to the EBF Morning Brief
The EBF Morning Brief is published Monday through Friday morning and brings you the top banking headlines, relevant announcements from the EU institutions and the latest from the EBF and its members, national banking associations in 32 countries in Europe. CLICK HERE TO SUBSCRIBE
The post EBF comments to IRS and US Treasury Dept regarding the implementation of Section 871(m) and related QDD program appeared first on EBF.
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