jueves, 14 de enero de 2016

United States' President signs extenders package

The US president signed a legislative package into law on 18 December 2015 that combines a bill to renew dozens of expired tax deductions, credits and incentives with omnibus appropriations legislation that sets spending levels for government agencies for the remainder of fiscal year 2016. The legislation also includes several provisions to overhaul the tax treatment of real estate investment trusts (REITs).
The “extenders” component of the package makes permanent several lapsed business, individual and charitable giving incentives, including the research credit. It also renews a handful of provisions – such as “bonus” depreciation, the work opportunity and new markets tax credits and production and investment tax credits for wind and solar energy – for five years.

Other provisions are extended through 2016.
Provisions that are of particular relevance to taxpayers engaging in cross-border transactions are highlighted below.

Extenders provisions:

  • The exception from “subpart F” for certain foreign income derived in the active conduct of a banking, financing, securities or insurance business is made permanent.
  • Regulated investment company (RIC) qualified investment entity treatment under the Foreign Investment in Real Property Tax Act (FIRPTA) is made permanent.
  • Provisions allowing for an exemption from gross-basis tax and withholding on interest-related dividends and short-term capital gains dividends paid by RICs to foreign investors are made permanent.
  • The application of the “lookthrough” rule that excludes from subpart F certain payments of interest, dividends, rents and royalties between related controlled foreign corporations under the foreign personal holding company rules is extended retroactively through 2019. 
  • The “section 199” deduction with respect to income attributable to domestic production activities in Puerto Rico is renewed through 2016, retroactive to the end of 2014.

REIT provisions: The legislation makes certain modifications to the tax treatment of REITs, including amendments to the FIRPTA exception for certain stock of REITs and an increase in the rate of withholding of tax on dispositions of US real property interests from 10% to 15% under certain circumstances.

Related-party loss rules: The legislation modifies the related-party loss rules (which generally disallow a deduction for a loss on the sale or exchange of property to certain related parties or controlled partnerships) to prevent losses from being shifted from a tax-indifferent party (for example, a person not subject to US tax) to another party in whose hands any gain or loss with respect to the property would be subject to US tax. The provision generally is effective for sales and exchanges of property acquired after 2015.

Source: Deloitte

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