January 16, 2022
U.S. International Tax This Week for January 14
Ernst & Young's U.S. International Tax This Week newsletter for the week ending January 14 is now available. Prepared by Ernst & Young's International Tax Services group, this weekly update summarizes important news, cases, and other developments in international taxation.
There was no substantive action on President Joe Biden's proposed Build Back Better legislation this week as Congressional Democrats pivoted to other legislative priorities, primarily voting rights and the filibuster. The main question regarding the future of the Build Back Better Act (BBBA) has been whether President Biden and Democratic leaders in Congress could accept Senator Joe Manchin's pre-holiday offer to the White House for 10-year funding on climate, health, and universal pre-kindergarten, but no extension of the now-expired expanded Child Tax Credit. The press is now reporting that Senator Manchin no longer supports his $1.8 trillion BBBA counterproposal that he made to President Biden in December. Senator Manchin also is said to have signaled that he no longer would favor any legislation resembling President Biden's expansive Build Back Better plan, although the Senator indicated there are individual proposals that he would support.
White House Press Secretary Jen Psaki said on 10 January, " … conversations are continuing behind the scenes at a staff level. And I can assure you that … that the President is going to continue to press to get Build Back Better done … ."
A Treasury official this week said that the US is developing interim guidance on cryptocurrency reporting, but provisions included in the recently enacted infrastructure bill have required officials to make revisions to drafts. The official was quoted as saying that regulations covering reporting requirements under IRC Section 6045 are a priority, but declined to provide a timeline for the regulations.
An Internal Revenue Service (IRS) official this week also was quoted as saying that the IRS Office of Fraud Enforcement (OFE) is working with the IRS Criminal Investigation division to ensure that agents have the necessary technology and training to find and follow cryptocurrency transactions. According to the official, the US will analyze available information by focusing on cryptocurrency transactions and taxpayers' financial and tax filings.
EY Guides and Publications
Realizing the value of your tax and finance function
EY's 2022 Tax and Finance Operations Survey, Realizing the value of your tax and finance function, highlights how businesses are actively transforming to meet today's largest challenges, including the impact of COVID-19, shifting workforce dynamics, environmental, social and governance impacts on long-term value and more.
BEPS 2.0: Focus on Pillar Two (January 14)
During this EY Webcast, Ernst & Young professionals will discuss the key elements of the Pillar Two model rules, highlighting what is new with this latest release. They also will share perspectives on how the European Union and other jurisdictions plan to incorporate these model rules into domestic law.
Private Equity and Private Capital - Navigating transformative global and US legislative change (January 18)
During this EY Webcast, Ernst & Young professionals will discuss 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.
Supply chain and tax challenges for manufacturers in Mexico (January 19)
The global economy is undergoing significant supply chain disruption, creating new challenges for multinationals with manufacturing operations in Mexico. Mexico’s 2022 tax reform could also affect these manufacturers. As such, companies may wish to explore manufacturing alternatives in Mexico that could yield new operating and tax efficiencies. During this EY Webcast, Ernst & Young professionals will address these issues.
Tax in the time of COVID-19: Update on legislative, economic, regulatory and IRS developments (January 21)
During this EY Webcast, Ernst & Young panelists will provide updates on: (i) the US economy and tax policy; (ii) breaking developments; and (iii) what’s happening at the IRS.
How the UK AHC regime will impact the alternative investment funds landscape (January 24)
Please join our panel of professionals for our webcast – a timely discussion of recent Tax industry trends and the outlook for changes relevant to US-based asset managers.
EY Tax.Tech™ webcast series: Understanding the future of tax - - the intelligent finance and tax function (January 25)
During this EY Webcast, Ernst & Young professionals will give a view into the workings of the new intelligent finance and tax function. They’ll explore issues ranging from the operating model necessary to underpin this integrated approach to the advanced technology platform and common data framework flowing through the complete finance and tax process life cycle.
BorderCrossings . . . With EY transfer pricing and tax professionals (January 27)
Multinational companies often encounter related transactions – for example, the sale of tangible goods with the use of intangibles, or the sale of goods along with services being provided. This month’s BorderCrossings webcast addresses these issues by focusing on the related “aggregation principle” in transfer pricing. The webcast will also include a brief update on recent activities around the OECD’s “Pillar One” and “Pillar Two” initiatives under BEPS 2.0.
Recent Tax Alerts
— Jan 12: President Biden signs Uyghur Forced Labor Prevention Act with implications for US importers (Tax Alert 2022-0059)
— Jan 12: Kenya High Court rules that insurance agencies, insurance brokerage and securities brokerage services should remain as VAT-exempt (Tax Alert 2022-0058)
— Jan 07: Ghana enacts various tax amendments introduced in 2022 Budget (Tax Alert 2022-0032)
— Jan 12: China implements new, stricter pre-travel COVID-19 test requirements for inbound travelers (Tax Alert 2022-0065)
— Jan 11: Kazakhstan's VAT obligations for nonresidents engaged in the e-commerce sale of goods and providing digital services to individuals entered into force on 1 January 2022 (Tax Alert 2022-0051)
Canada & Latin America
— Jan 13: Argentina's tax authority launches the 'Comprehensive System for Monitoring Payments Abroad for Services' (Tax Alert 2022-0070)
— Jan 12: Double tax treaty between Colombia and France entered into force on January 1, 2022 (Tax Alert 2022-0068)
— Jan 12: Costa Rican Foreign Trade Promoter published the 'Handbook for Auditing Free Trade Zone Regime Companies' (Tax Alert 2022-0062)
— Jan 10: Colombia issues resolution on ultimate beneficial owners (Tax Alert 2022-0052)
— Jan 10: Costa Rica's Congress will discuss a bill that would modify PE definition (Tax Alert 2022-0047)
— Jan 10: Canada announces temporary expanded eligibility for the Local Lockdown Program (Tax Alert 2022-0045)
— Jan 07: Paraguay modifies nonresident tax for digital services (Tax Alert 2022-0038)
— Jan 12: Spain approves State Budget Bill for 2022 (Tax Alert 2022-0066)
— Jan 11: Cyprus expands treaty network as of 1 January 2022 (Tax Alert 2022-0050)
— Jan 10: Russia implements new medical exam, photo and fingerprint requirement for foreign travelers (Tax Alert 2022-0046)
— Jan 10: QUEST Economic Update highlights key US and global economic trends — January 10, 2022 (Tax Alert 2022-0048)
Highlights of this edition include:
- Biden Administration’s Build Back Better legislation stalls in Congress; Senate Finance Committee releases updated international tax provisions
- Treasury releases final foreign tax credit regulations
- IRS issues final rules on tax consequences of transition from LIBOR and other interbank offered rates in certain financial contracts
- FinCEN again extends certain signature authority reporting (FBAR, Form 114) over foreign financial accounts
- OECD releases Model Rules on Pillar Two Global Minimum Tax
- OECD releases 2020 peer review report on BEPS Action 5 on the Exchange of Information of Tax Rulings
IRS Weekly Wrap-Up
Internal Revenue Bulletin
| ||2022-03||Internal Revenue Bulletin of January 14, 2022|
Ernst & Young Client Portal, the leading source for news, analysis, and reference materials for corporate tax professionals, has a variety of content of interest to international tax practitioners, including:
— EY/Passport. EY/Passport is your guide to planning ventures in the global economy, offering a wealth of tax and business knowledge on more than 150 countries.
Because the matters covered herein are complicated, U.S. International 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.