The Research and Development (R&D) Tax Credit program remains to be an enticing opportunity for businesses – small and large – to boost their assets. Fortunately, significant reforms have been made over the years and millions of businesses from different industries can now take advantage of its benefits.
In December 2019, the Final Regulations for Qualified Opportunity Zone Program were issued by Treasury and the Internal Revenue Service (IRS). The Final Regulations were reported in the Federal Register in January 2020 and will become final in mid-March.
In April 2019, the Internal Revenue Services (IRS) released its second set of new regulations on the Qualified Opportunity Zone (QOZ) program. The additional guidelines aim to give light on the initial regulations released last 2018. However, several open questions still remain, that investors and related practitioners must be continuously proactive in monitoring the latest regulatory trends and development. Understanding the latest updates and how these might affect their businesses also will help them maximize opportunities while mitigating potential risks and pitfalls.
In recent years, state and local governments have become more proactive in pursuing additional revenue through stricter application of their tax laws. Additionally, revenue authorities have also significantly widened their search for new revenues. These have made taxpayers grapple with problems and lawsuits at the audit and novel roles.
With the notable tax reforms that took place during the past years, the Research and Development (R&D) Tax Credit has been an effective and efficient partner for businesses to cut income tax liabilities.
Emerging trends and developments have brought sweeping changes to the sales and use tax landscape. In recent years, economic nexus legislations, following the South Dakota vs. Wayfair decision, have continuously affected corporations from various states. Adding to the challenges are the impacts brought by COVID-19, which include cash flow and state obligation issues. In response, new rules for deferral reliefs on sales and use tax filing and payment have now been laid down.
Important regulatory changes continue to reshape the investment funds and Qualified Opportunity Zones (QOZ) programs. On January 19, 2021, the Internal Revenue Services (IRS) issued Notice 2021-10, which provides new extensions and deadlines for filing QOZ investments.
Critical and emerging issues surrounding Common Reporting Standard (CRS) continue to affect global financial institutions. More and more businesses are becoming vulnerable to financial risks and disputes because of the stiffer compliance requirements as well as the complexities brought by the COVID-19.
The economic downturn brought by the COVID-19 pandemic has profoundly impacted the transfer pricing landscape. Multinational enterprises (MNEs) are dealing with serious transfer prices issues, supply chain disruptions, and restructuring expenses. In response to these growing repercussions, the Organization for Economic Co-operation and Development (OECD) recently published guidance on transfer pricing policies and clarified the application of the arm’s length principle. It also underscored the compliance challenges faced by MNEs.
The global transfer pricing landscape has been in flux over the past years. Key factors driving change include intensified enforcement by tax authorities, changes to international tax rules, new case law, the impact of digitalization in the economy, and the COVID-19 crisis. With all these complexities and challenges, it is imperative for multinational enterprises (MNEs) and their counsel to be acquainted with the legal updates and governing compliance principles in this area of law to ensure sound compliance and abate potential exposure to legal risks.
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The COVID-19 pandemic has brought sharp changes to the tax enforcement priorities of the Internal Revenue Service (IRS), specifically in implementing its remote audits. Recently, the IRS and the Treasury Department released proposed treasury regulations related to the electronic filing of certain tax returns and statements. These, along with other significant developments, have been the result of the Biden administration’s efforts to address recent tax compliance issues and controversies.
The Biden administration has drafted several tax proposals as part of its “Build Back Better” plan and among the most notable policy priorities include an increased tax responsibility for larger corporations. To alleviate this anticipated additional tax burden, leveraging their research and development (R&D) tax credits should be considered. However, the recently released tax proposals do not include any R&D-related changes or development details, posing an open question on the new administration’s plan for R&D investments.
The rise of sales tax automation has made it possible for companies to turn their manual tax processes into streamlined and efficient systems. It has dramatically improved everyday tasks, like data validation, which can now be performed with increased speed, ease, and accuracy.
In 2018, the U.S. Supreme Court ruled in favor of the state in South Dakota v. Wayfair, Inc. The decision has overruled a long-standing standard allowing states to charge remote sellers for in-state transactions. Consequently, several states have adopted new rules that specify what sets out a tax duty on sales and usage, known as nexus. They have also started to expand the economic nexus standard sanctioned in Wayfair beyond sales tax systems, introducing economic nexus provisions for corporate income taxes.
