Tax & Regulatory Briefing: August 2020

August 31, 2020

For those of us working from home these past few months, this summer hasn’t felt much different than winter or spring (though our air conditioners might disagree).

Critical questions continue to mount about the global outlook for COVID-19. Cities in the US and abroad are dealing with spikes of civil unrest, and the global business community watches the US presidential election with bated breath.

Despite uncertainties, US real estate still has foreign investment appeal. JLL’s newest Global Real Estate Transparency Index still ranks the US as one of the most transparent markets, and the recent Big Picture report from Real Capital Analytics shows that non-US investors have been net acquirers in 2020 (though capital repatriation activities from Chinese investors in 2019 has also contributed to this trend).

Even as the market remains active, transaction volumes are down and regulatory scrutiny is on the rise—especially as the Committee on Foreign Investment in the United States (CFIUS) has been mobilized in the continued technology tensions between the US and China. Definitely important to watch in the coming months.

Welcome to the AFIRE Tax & Regulatory Briefing.

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Treasury Department Formally Implements CFIUS Filing Fees and Narrows Definition of “Principal Place of Business”

The Department of the Treasury issued a final rule narrowing its definition of “place of business” and implementing filing fees for formal notices of transactions submitted to CFIUS. Change went into effect yesterday. via Baker McKenzie

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Scheduled for the final Friday of every month, the AFIRE Tax & Regulatory Briefing provides quick summaries and links to recent articles and white papers provided by AFIRE members, expert sources, and other content from our association’s everyday reading lists.

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New National Security Regulations Subject More Insurance Sector Transactions to CFIUS Review

Given the high stakes of failure to account for CFIUS risks in transaction planning, and CFIUS’s increased efforts to identify non-notified transactions, it is more important than ever for companies to conduct early due diligence. via DLA Piper

DOJ Releases First FCPA Advisory Opinion in Six Years

The Department of Justice released its first Foreign Corrupt Practices Act (FCPA) advisory opinion since 2014, requested by a US investment firm seeking to pay a foreign state-owned bank for “certain enumerated analytical and advisory” services. via Arnold & Porter

Highlights From the Proposed Carried Interest Regulations

The Treasury Department and the IRS recently released proposed regulations under Section 1061 of the Internal Revenue Code of 1986, confirming (in many ways) that the section should “be applied in accordance with a plain reading of the statute.” via Goodwin

Intangibles Are Exempt from Property Tax

A recent case involving a Disney Yacht and Beach Club Resort in Orange County, Florida demonstrates how significantly tax liability can differ when an assessor fails to exclude intangible assets. via Globe St.

Hong Kong Court Decision Is Reminder that Contractual Clarity Is Critical During Construction Tender Process

A recent case reminds participants in the tender process that they should, so far as possible, clearly set out what has and has not been agreed between them prior to formal award of contract to avoid the potential for costly disputes at a later stage. via Mayer Brown

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