Daily Tax Update - April 21, 2015: IRS Identifies Treaty Exemptions for Purposes of the Section 5000C Foreign Procurement Tax

IRS Identifies Treaty Exemptions for Purposes of the Section 5000C Foreign Procurement Tax:  Today, the IRS issued Notice 2015-35, which provides a list of qualified income tax treaties for purposes of exemption from the tax imposed by section 5000C.  Section 5000C imposes a 2% tax on certain foreign persons receiving specified federal procurement payments.  The release of Notice 2015-35 comes a day after the IRS issued proposed regulations under section 5000C.  Notice 2015-35 is effective for all payments received under specified federal procurement contracts entered into on and after January 2, 2011.

JCT Report Estimates Cost of Extension and Modification of Health Coverage Tax Credit:  Today, the Joint Committee on Taxation (JCT) released a report (JCX-76-15) estimating the budget effects of a forthcoming bill’s proposal to extend and modify the health coverage tax credit.  The JCT estimates that such a provision would increase the deficit by $173 million over the next decade.  The Senate Finance Committee is scheduled to markup the bill on April 22.


EU Council Endorses Beneficial Ownership Register Rules:  On April 20, the Council of the European Union approved the fourth anti-money-laundering directive, which includes a requirement for all member states to maintain a central register of information on the beneficial ownership of corporate and other legal entities.  According to an EU Council press release, under the directive, member states must ensure that the central register is accessible to competent authorities, financial intelligence units and, as part of customer due diligence, “obliged entities” such as banks.