October 17, 2021
U.S. Tax This Week for October 15
Ernst & Young's U.S. Tax This Week newsletter for the week ending October 15 is now available. Prepared by Ernst & Young's National Tax Department in Washington, D.C., this weekly update summarizes important news, cases, and other developments in U.S. taxation.
Top of the Week
IRS representatives say MAP and APMA cases are more difficult because of high adjustments, express concern about unilateral relief
The large adjustments involved in mutual agreement procedures (MAP) cases is making those cases hard to handle through the dispute resolution process, a director at the IRS Large Business and International Division said. In a separate webcast, the director of the Advance Pricing and Mutual Agreement Program (APMA) "expressed concern that agreeing to unilateral relief offered by a [US] treaty partner jurisdiction may become an obstacle to receiving full relief from double taxation." EY Tax Alert 2021-1872 has details.
OECD releases statement updating July conceptual agreement on BEPS 2.0 project
On 8 October 2021, at the conclusion of a virtual meeting of the OECD/G20 Inclusive Framework on BEPS (the Inclusive Framework), the OECD released a statement reflecting the agreement reached by 136 out of the 140 Inclusive Framework members on core design features of the two-pillar solution developed in the BEPS 2.0 project (October Statement). EY Tax Alert 2021-1840 has details.
EY Guides and Publications
How leaning into transfer pricing transformation helps manage tax risk
The 2021 EY International Tax and Transfer Pricing survey finds agility can help businesses prepare for rising uncertainty and controversy. A convergence of trends is putting pressure on transfer pricing, increasing the risk of tax controversy. Additional information is available in this EY article.
EY publication highlights 2021 Q3 tax policy developments across the Americas
The third quarter of 2021 ushered in several significant tax policy developments across the Americas. The attached Americas Tax Policy Update highlights the top tax policy developments from July through September 2021.
PE and Private Company quarterly tax webcast (October 21)
During this Thought Center Webcast, Ernst & Young professionals will discuss the recent global private equity (PE) industry trends and the outlook for US and international legislative and regulatory changes relevant to PE and alternative funds, transactions and portfolio companies.
Examining the MTC’s revised statement on P.L. 86-272: Updates, impact and considerations (October 21)
During this Thought Center Webcast, Ernst & Young professionals will discuss how multistate taxpayers may be affected by the Multistate Tax Commission’s (MTC) recently approved fourth revision to its Statement of Information concerning practices of the MTC and supporting states under P.L. 86-272.
Tax in the time of COVID-19: update on legislative, economic, regulatory and IRS developments (October 22)
During this Thought Center Webcast, Ernst & Young professionals will discuss how businesses can navigate the tax policy environment and continue to effectively operate their tax function in this time of crisis and change. Panelists will provide updates on: (i) the US economy and tax policy; (ii) breaking developments; and (iii) what’s happening at the IRS.
BEPS 2.0: Beyond 2021 (October 28)
During this EY Webcast, Ernst & Young professionals discuss BEPS 2.0 and taxation of the digitalized economy updates after the October OECD/G20 Inclusive Framework meeting and the G20 Finance Ministers and Central Bank Governors meeting.
BorderCrossings . . . With EY transfer pricing and tax professionals (October 28)
During this Thought Center Webcast, Ernst & Young professionals will discuss frameworks for assessing and inventorying customer-related data and valuing them across a spectrum of business models (i.e., data-enabled and data-enhanced models). We will also examine fair market valuations of data and cybersecurity from a transfer pricing perspective.
The indirect tax technology journey: Now. Next. Beyond (November 3)
During this Thought Center Webcast, Ernst & Young professionals will share insights into how market-leading organizations are using technology to adapt to new legislation and market trends, and to effectively transform tax operations.
Recent Tax Alerts
Internal Revenue Service
— Oct 14: IRS representatives say MAP and APMA cases are more difficult because of high adjustments, express concern about unilateral relief (Tax Alert 2021-1872)
— Oct 13: IRS maintaining its policy on telescoping while trying to alleviate administrative burden, official says (Tax Alert 2021-1856)
— Oct 12: IRS will delay foreign currency guidance applicability dates for one more year (Tax Alert 2021-1849)
— Oct 14: Uruguay establishes application date for tax exemptions for leasing social interest housing (Tax Alert 2021-1870)
— Oct 14: Kenya Revenue Authority issues guidelines on implementation of Value Added Tax (Electronic Tax Invoice) Regulations, 2020 (Tax Alert 2021-1868)
— Oct 14: Ireland announces Budget 2022 (Tax Alert 2021-1867)
— Oct 14: Canada announces it will enact Digital Services Tax but says implementation is conditional (Tax Alert 2021-1864)
— Oct 14: Luxembourg’s Reverse Hybrid Entity Rule effective as from tax year 2022 (Tax Alert 2021-1863)
— Oct 14: PE Watch | Latest developments and trends, October 2021 (Tax Alert 2021-1862)
— Oct 13: Poland announces new, more lenient entry rules for certain business visitors and Turkish citizens (Tax Alert 2021-1859)
— Oct 13: Australia is reforming skilled migration as border restrictions ease (Tax Alert 2021-1852)
— Oct 13: Cyprus Tax Authority issues clarification regarding Competent Authority Agreement with the United States for exchange of CbC reports (Tax Alert 2021-1850)
— Oct 11: General Directorate of Internal Taxes of Dominican Republic establishes payment programs for unpaid tax liabilities (Tax Alert 2021-1847)
— Oct 12: Denmark publishes bill relaxing transfer pricing documentation requirements in relation to domestic controlled transactions (Tax Alert 2021-1845)
— Oct 12: CJEU issues final decision confirming characterization of the Spanish tax amortization regime for financial goodwill as State aid (Tax Alert 2021-1844)
— Oct 11: OECD releases statement updating July conceptual agreement on BEPS 2.0 project (Tax Alert 2021-1840)
— Oct 08: 136 Inclusive Framework countries support global tax agreement (Tax Alert 2021-1839)
— Oct 08: French Government clarifies new requirement for transmission of electronic invoicing and payment data as from 1 July 2024 (Tax Alert 2021-1835)
— Oct 08: Update provided on entry restriction to Indonesia and international travel health protocol for foreigners (Tax Alert 2021-1834)
— Oct 08: Jordan issues transfer pricing instructions (Tax Alert 2021-1831)
— Oct 08: Ireland joins consensus on G20/OECD International Tax Proposals (Tax Alert 2021-1830)
— Oct 14: House Ways & Means reconciliation bill proposes important credits and incentives that would encourage investment in Puerto Rico (Tax Alert 2021-1866)
— Oct 14: Social Security wage base to increase in 2022 (Tax Alert 2021-1865)
— Oct 13: What to expect in Washington (October 13) (Tax Alert 2021-1855)
— Oct 13: Texas adopts amendments to its franchise tax rule for research and development activities credits (Tax Alert 2021-1860)
— Oct 13: New York State extends certain October 15 deadlines for taxpayers affected by post-tropical depression Ida, excludes 2021 election for NY pass-through entity tax from relief (Tax Alert 2021-1858)
— Oct 13: California state requirement for supplemental paid sick leave expired September 30, 2021; some local ordinances continue to apply (Tax Alert 2021-1857)
— Oct 12: Vermont employers must apply by October 31, 2021 for relief of COVID-19 UI benefit charges in the computation of their SUI tax rates (Tax Alert 2021-1848)
— Oct 11: New York legislation would relieve employers of paying SUI assessment for the repayment of interest on the state's federal unemployment insurance loan balance (Tax Alert 2021-1846)
Highlights of this edition include:
- Congress fails to pass infrastructure and budget reconciliation legislation
- House Ways & Means Committee reports out reconciliation bill with major international tax proposals
- Senate Finance Committee Chairman releases partnership tax proposals
Treasury and IRS news
- Final foreign tax credit regulations will include jurisdictional nexus requirement, Treasury official says
- IRS allows taxpayer to reverse GILTI “gap period” transaction through late CTB election
- IRS articulates five-factor test in determining income inclusion of reimbursement payments
- IRS issues final regulations on treatment of qualified improvement property and provides guidance on foreign tax credits
- IRS seeing more billion-dollar MAP cases
- IRS lists jurisdictions with US information exchange agreements that allow reporting of certain deposit interest
- G7 Finance Ministers make progress on BEPS 2.0 issues in lead-up to October 2021 meetings
IRS Weekly Wrap-Up
| ||2021-57||Funding relief for multiemployer defined benefit pension plans under the American Rescue Plan Act of 2021|
| ||2021-58||Extension of COBRA election and premium payment deadlines under section 7508A(b)|
| ||2021-59||Deferred Applicability Dates for Foreign Currency Guidance|
Internal Revenue Bulletin
| ||2021-42||Internal Revenue Bulletin of October 18, 2021|
Because the matters covered herein are complicated, U.S. Tax This Week should not be regarded as offering a complete explanation and should not be used for making decisions. Any decision concerning matters covered herein should be reviewed with a qualified tax advisor.