Daily Tax Update - April 28, 2017: Congress Passes Continuing Resolution to Avoid Shutdown

Congress Passes Continuing Resolution to Avoid Shutdown:  The House and Senate approved a continuing resolution (CR) that will extend government funding until May 5. The CR passed the House 382-30 and passed the Senate by voice vote.

Funding for the federal government was set to expire at midnight on April 28, and while many favored passing a longer-term measure that would extend funding for the rest of the fiscal year (which ends on September 30), the one-week CR will allow for such a deal to be finalized.

European Parliament Votes to Amend Hybrid Mismatch Rules:  The European Parliament voted to adopt proposed amendments to EU Directive 2016/1164 (the Anti-Tax Avoidance Directive) that would expand the directive’s hybrid mismatch provisions. Currently, the hybrid mismatch provisions of the Anti-Tax Avoidance Directive generally apply to certain hybrid mismatches between two EU member states that are attributable to differences in the legal characterization of a financial instrument or entity.

The amendments, if approved by the European Council, would extend these provisions to certain hybrid mismatches involving an EU member state and a non-EU jurisdiction and to certain reverse hybrid mismatches, permanent establishment mismatches, tax residency mismatches, and “imported” mismatches. EU member states would have until the end of 2019 to adopt laws, regulations, and administrative provisions necessary to implement the new provisions, and until the end of 2021 to implement the provisions relating to reverse hybrid mismatches.

The text of the amendments proposed by the European Commission can be found here.

The text of the report that was adopted by the European Parliament (modifying the amendments proposed by the European Commission) can be found here.