Overview
Treasury and IRS Issue Proposed Regulations on Section 5000C Tax: Today, Treasury and the IRS issued proposed regulations under section 5000C, which imposes a 2% tax on certain foreign persons receiving specified federal procurement payments. The proposed regulations contain rules relating to the obligation of the U.S. government to withhold, deposit, and report covered amounts. The proposed regulations also provide guidance to foreign persons who must report and pay the tax under section 5000C in certain circumstances.
UK and Australia Agree to Collaborate on Multinational Tax Issues: On April 19, the UK Chancellor of the Exchequer, George Osborne, and the Treasurer of Australia, Joe Hockey, announced the establishment of a joint working group to further consider and develop initiatives in relation to purported diverted profits. According to a press release, “[b]oth the UK and Australia have sought to put in place competitive business tax regimes in order to encourage enterprise and investment, but those tax rates should be paid, not avoided through artificial structures. The working group will build on the UK’s experience of introducing a Diverted Profits Tax.”