Earlier this month, Canada and Mexico provided the required notifications regarding completion of domestic procedures to clear the way for entry into force of the Agreement between the United States of America, the United Mexican States, and Canada (USMCA). The United States also would have to do so before the end of April in order for the agreement to enter into force on July 1, 2020. Entry into force may potentially impact treaty eligibility for certain subsidiaries of some US, Canadian, and Mexican-parented companies. See our earlier Tax Insight for a more detailed discussion.
Whether the USMCA will enter into force on July 1 or at a later date depends upon the United States completing the necessary domestic procedures and providing notification by the end of the April. In the meantime, taxpayers should remain alert for any IRS or Treasury guidance and review their structures to consider the potential impact with regard to treaty eligibility.