The United States (US) Government is actively considering how to address the pressing need for interpretative guidance following the enactment of the Tax Cuts and Jobs Act (TCJA). A Treasury official was recently quoted as saying that most of the necessary guidance to implement the new law will be released over the next 12 to 18 months. As far as the interaction between newly enacted provisions and the rest of the Code, "there is no chance of us [Treasury] having that completely thought out in a three-month period of time." The official said taxpayers should adopt a "reasonable methods consistently applied" approach during the period before regulations are issued.

In the meantime, a Treasury official was quoted as saying the Government will continue to release notices on one-off issues, like those issued under the Internal Revenue Code Section 965 repatriation transition tax. Other areas where coordination is required between the specific provision and the existing Code will require more than a notice; examples cited include the new Global Intangible Low Tax Income (GILTI) tax and the Base Erosion and Anti-Abuse (BEAT) minimum tax. The official said this type of guidance is more likely to come in the form of proposed regulations, but not before summer.

A White House official this week reminded the public, however, that Treasury is still held to President Trump's "2 for 1" executive order issued on 30 January 2017. Executive Order 13771 generally requires agencies to remove two regulations for every new regulation that is issued. It was unclear in the months following the issuance of the Executive Order whether Treasury was subject to the rule.

On the issue of technical corrections legislation, Congressional Joint Committee on Taxation (JCT) Chief of Staff Tom Barthold was quoted as saying that it is not clear when tax writers will introduce a TCJA technical corrections bill, but that the JCT is working on what it may include. He also said there is no timetable for a "Bluebook" describing enacted tax legislation. The Bluebook is traditionally published at the end of a Congress, but another JCT official confirmed an off-year edition focused solely on the TCJA is possible.

The Organisation for Economic Co-operation and Development (OECD) on 23 January announced the launch of the International Compliance Assurance Programme (ICAP) pilot.¹ The pilot will focus on multilateral risk assessment and resulting tax assurance of large Multinational Enterprise (MNE) groups. ICAP is a voluntary program that will use Country-by-Country (CbC) reports and other taxpayer-provided information to allow MNE groups and tax administrations to engage in open discussions on tax risks, and, if agreement can be reached that the issues are low risk, to provide outcome letters that state this. The ICAP pilot focuses on low risk taxpayers; the OECD hopes that future ICAP programs will allow taxpayers with higher risk profiles to also enter the program.

Eight jurisdictions are participating in the pilot: Australia, Canada, Italy, Japan, the Netherlands, Spain, the United Kingdom and the United States. The number of MNE groups participating in this exercise is unknown, and each was invited to participate by the tax authority of the jurisdiction in which it is headquartered.

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ENDNOTE

¹ See EY Global Tax Alert, OECD launches International Compliance Assurance Programme pilot, dated 26 January 2018.

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CONTACTS

For additional information with respect to this Alert, please contact the following:

Ernst & Young LLP, International Tax Services, Washington, DC

• Arlene Fitzpatrick
  arlene.fitzpatrick@ey.com
• Joshua Ruland
  joshua.ruland@ey.com

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ATTACHMENT

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