Cross Border Tax Guidance Regarding Coronavirus-Related Travel Disruptions; The U.S. Treasury Department and the Internal Revenue Service (IRS) issue guidance that provides relief to individuals as well as businesses affected by travel disruptions arising from the COVID-19 emergency. Cross-border guidance regarding coronavirus-related travel disruptions is comprised of two Revenue Procedures. We are presenting the details of each Revenue Procedures of cross border tax guidance related to travel disruptions arising from the COVID-19 emergency, one by one. Not only this, the IRS also issued a set of FAQs related to cross border tax guidance and information for nonresident aliens and foreign businesses impacted by COVID-19 travel disruptions. All are briefly discussed below:
1. Tax Guidance # 01
This guidance includes Revenue Procedure 2020-20 (PDF) which explains that, under certain specific circumstances, up to 60 consecutive calendar days of U.S. presence that are presumed to arise from travel disruptions caused by the COVID-19 emergency will not be counted for purposes of determining U.S. tax residency. Furthermore, the same criteria will be followed for the purpose to determine whether an individual qualifies for tax treaty benefits for income from personal services performed in the United States.
2. Tax Guidance # 02
This guidance includes Revenue Procedure 2020-27 (PDF) which explains that qualification for exclusions from gross income under I.R.C. section 911 will not be impacted as a result of days spent away from a foreign country due to the COVID-19 emergency based on certain departure dates.
3. Tax Guidance FAQs
This section covers set of FAQs which explains that certain U.S. business activities conducted by a nonresident alien or foreign corporation will not be counted for up to 60 consecutive calendar days to determine whether the individual or entity is engaged in a U.S. trade or business or has a U.S. permanent establishment, but only if those activities would not have been conducted in the United States but for travel disruptions arising from the COVID-19 emergency.
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