Tax & Regulatory Briefing: October 2020

This month’s Tax & Regulatory Briefing is reaching all AFIRE members, because we’re in the midst of a busy season—which means there’s something for everyone in this message.

With major implications on US tax, regulatory, and policy issues lined up no matter the outcome of the upcoming presidential election—including the news highlights at the end of this message—these events and our related content on the AFIRE Global mobile app are promising to be packed with critical insights for the months ahead.

Welcome to the AFIRE’s October Tax & Regulatory Briefing.

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While many international investors have focused on the impact of the Foreign Investment in Real Property Tax Act (FIRPTA) law since it was enacted in 1980, the Committee on Foreign Investment in the US (CFIUS, stablished by executive order in 1975) may be more of a concern today. 

In 2006, Notifications and Investigations more than doubled, and by the end of 2018, they had doubled again. In 2018, the Foreign Investment Risk Review Modernization Act (FIRRMA) was signed, leading to a significant increase in the focus and enforcement of CFIUS. Although the total number of notifications was only 229 in that year, there is concern that the number might now be rising.

To get a better understanding of the impact of CFIUS on AFIRE membership, we invite you to take this brief, three-minute survey and share your ideas about the CFIUS and the outlook for cross-border investing.

Results will be presented at AFIRE’s Focus on CFIUS virtual event.


RECENT TAX & REGULATORY UPDATES FROM ACROSS THE INDUSTRY

CFIUS Changes in 2020: Q&A with Danish Hamid

Hamid authored the CFIUS chapter in the ABA’s Aerospace Defense Industries Year in Review, and lends his expertise to the NLR to answer a few questions on changes to CFIUS in 2020. via National Law Review

Highlights of Pillar One and Pillar Two Blueprints Issued For Public Consultation

The OECD/G20 Inclusive Framework on BEPS (IF), agreed during its October 8–9, 2020 meeting that the two-pillar approach they have been developing since 2019 provides a solid foundation for a future agreement. via Deloitte Tax

US Regulators Propose a Rule to Distinguish Guidance from Regulation

The agencies issued a notice of proposed rulemaking (NPR) to codify the Interagency Statement Clarifying the Role of Supervisory Guidance from 2018. The Statement would supersede the 2018 Statement and address several concerns. via Mayer Brown

SEC Expansion of Definitions of Accredited Investor and Qualified Institutional Buyer; Effective Date December 8, 2020

By updating the definition, the SEC has expanded investment opportunities to investors who have the knowledge and expertise to make informed decisions about such investments but were otherwise prevented from investing due to the existing income and net worth requirements. via Stroock

Everything You Need to Know About California’s Property Tax Ballot Measure

The change in tax law would require county assessors to visit commercial properties and determine their current market value. The implementation would be “gradually phased” starting in 2022. via The Real Deal

EVENTS

Tax & Regulatory Summit

Tuesday, November 10, 2020, 10:00 AM – 12:00 PM EST

AFIRE’s Tax and Regulatory Summit invites real estate investment executives, lawyers, legal experts, insurance professionals, and investment strategy leaders to discuss the latest tax and regulatory trends and issues impacting the real estate investing industry.

This session will feature Jim Costello at Real Capital Analytics, providing an overview of trends in property markets, distressed properties, debt, and leasing, followed by a discussion with tax and regulatory experts in conversation with investment managers.

Focus on CFIUS

Tuesday, December 1, 2020, 10:00 AM – 11:00 AM EST

Originally established in the 1970’s, the Committee on Foreign Investment in the United States (CFIUS) is a United States Government committee that reviews the national security implications of foreign investments in US companies or operations.

With rising trade tensions between the US and other countries—especially China—the reach and implications of CFIUS decisions are having a growing impact on foreign investment into the US.

This Focus on CFIUS discussion highlights the current status of CFIUS policies for commercial real estate decisions, and potential implications on the future of foreign direct investment.

Want to include your updates for the next briefing? Let us know.