Comment Letters

On December 18, 2024, TEI submitted comments to the Canada Revenue Agency ("CRA") regarding its reporting fees for services initiative (the "Initiative"). TEI participated in the CRA's working group on the Initiative and recommended the CRA exempt from the Initiative payments to GST registrants. Other recommendations included moving from monthly reporting to yearly reporting, changing certain items on the reporting form, and raising the reporting threshold amount. TEI's comments were prepared by its Canadian Income Tax Committee, in coordination with Benjamin R. Shreck, TEI Tax Counsel.

On October 7, 2024, TEI submitted comments to the Internal Revenue Service and U.S. Department of the Treasury regarding proposed regulations addressing dual consolidated losses ("DCL") and new disregarded payment loss rules. TEI's comments focused on the interaction of the DCL rules and the OECD Pillar Two regimes, "triggering events" under the DCL rules, and the newly created DPL regime, among other things. TEI's comments were prepared under the aegis of its Tax Reform Task Force, whose Chair is Andreia Verissimo. Benjamin R.

On October 2, 2024, TEI submitted supplemental comments on Notice 2023-63 and section 174, with a particular focus on rules related to software development for future proposed regulations. The comments address timing issues with respect to wage SREs, the appropriate nexus for indirect costs to be considered SREs, and a reasonable analytical framework under section 174. TEI also provided additional examples that would clarify which software-related costs need to be capitalized under section 174.

On September 11, 2024, TEI submitted comments to the Canadian Department of Finance regarding proposed amendments to the bare trust reporting rules under section 150 of the Income Tax Act. TEI's comments focused on the compliance burden the rules impose on corporate taxpayers and made several recommendations to narrow the scope of the rules. TEI's comments were prepared under the aegis of its Canadian Income Tax Committee, whose Chair is Sandy Shanks. Benjamin R. Shreck, TEI Tax Counsel, coordinated the preparation of TEI's comments.

On September 10, 2024, TEI submitted comments to the European Commission regarding its review of its anti-tax avoidance directive, or "ATAD." TEI's comments focused primarily on whether the ATAD is still useful given the numerous subsequent anti-tax avoidance measures that have been introduced in the European Union, or will be introduced under OECD Pillar Two. TEI's comments were prepared by a working group of its EMEA Direct Tax Committee, led by Ralf Thelosen of Citco. Benjamin R. Shreck, TEI Tax Counsel, coordinated the preparation of TEI's comments.

On June 10, 2024, TEI sent a letter to the Brazilian tax authorities recommending Brazil adopt a cooperative compliance program with taxpayers. TEI noted the advantages of such a program include providing tax authorities with transparency and taxpayers with certainty, improving the risk assessment process, and assist the Brazilian tax authorities in implementing Brazil's new transfer pricing legislation, among other things. TEI's letter was prepared under the aegis of its U.S. International Tax Committee. Benjamin R.

On August 28, 2024, TEI submitted comments regarding the European Commission's draft implementing regulation for the Commission's public country-by-country ("CbC") reporting directive. TEI's comments focused on the need to clarify the scope and purpose of the information included in the public CbC reports, for consistency across EU Member States in implementing the regulation, and to use an XML schema instead of XBRL. TEI's comments were prepared under the aegis of its EMEA Direct Tax Committee. Benjamin R. Shreck, TEI Tax Counsel, coordinated the preparation of TEI's comments.

On August 19, 2024, TEI submitted comments regarding the OECD's Draft User Guide for the GloBE Information Return XML Schema. TEI's comments emphasized the need for information return exchange agreements, a uniform XML schema and filing portal, and a secondary filing mechanism, among other things. TEI's comments were prepared under the aegis of its EMEA Direct Tax Committee and were led by Ralf Thelosen of Citco. Benjamin R. Shreck, TEI Tax Counsel, coordinated the preparation of TEI's comments.

On July 24, 2024, TEI submitted comments on Notice 2023-63 and section 174, with a particular focus on rules related to software development for future proposed regulations. TEI requested rules for determining the proper unit of account with respect to SREs and further guidance on what does and does not constitute software development. TEI included numerous examples that would clarify which software-related costs need to be capitalized under section 174.

On July 10, 2024, TEI submitted comments to the Ministry of Finance of Singapore regarding its bill to implement a multinational enterprise top-up tax and a domestic top-up tax as part of Singapore's implementation of the OECD's Pillar Two project. TEI's comments primarily focused on the need for additional clarification of several aspects of the draft legislation, including the difference between income taxes reported on financial statements versus the actual cash tax paid in a particular year, among other things. TEI's comments were prepared under the aegis of its Asia Tax Committee.