European Commission Proposes Extensive Reform of EU VAT Rules: Today the European Commission launched plans for a far-reaching reform of the European Union (EU) VAT system. In a press release, the European Commission noted that “over €150 billion of VAT is lost every year,” and that of this “around €50 billion . . . is estimated to be due to cross-border VAT fraud.” The press release notes that the European Commission proposes to fundamentally change the current VAT system by taxing sales of goods from one EU country to another in the same way as goods are sold within individual member states. The new system is intended to tackle fraud while increasing simplicity and consistency. The proposal also introduces the notion of a “certified taxable person”—a category of trusted business that will benefit from simpler rules. The proposal will be sent to the member states in the European Council for agreement and to the European Parliament for consultation.

IRS Provides Relief for Individuals Who Would Otherwise Lose ‘Bona Fide Resident’ Status: Notice 2017-56 provides relief to residents of Puerto Rico and the US Virgin Islands who evacuated or could not return because of Hurricane Irma or Hurricane Maria, and would lose their status as “bona fide residents” for tax filing and reporting purposes. Notice 2017-56 extends the usual 14-day absence period to 117 days, beginning September 6, 2017 and ending December 31, 2017, for the presence test for residency under the tax rules. Further, an individual who is absent from either US territory on any day during this 117-day period will be treated as leaving or being unable to return to the relevant US territory as a result of Hurricane Irma and Hurricane Maria on such day.

DTU In Depth

Treasury Releases Second Report on Tax Regulatory Burdens: Today, the Treasury Department released “Second Report to the President on Identifying and Reducing Tax Regulatory Burdens,” (the “Report”) dated October 2. The Report was required by Executive Order (EO) 13789 and follows up on an interim report, issued on June 22 as Notice 2017-38, in which Treasury identified eight regulations for review under EO 13789. The EO directed the Secretary of the Treasury to identify significant tax regulations issued on or after January 1, 2016 that: (i) impose an undue financial burden on US taxpayers; (ii) add undue complexity to the federal tax laws; or (iii) exceed the statutory authority of the IRS. Click here to read more.