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17 April 2022

U.S. International Tax This Week for April 15

Ernst & Young's U.S. International Tax This Week newsletter for the week ending April 15 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.

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Spotlight

Treasury Secretary Janet Yellen this week made the pitch that implementation of the Base Erosion and Profit Shifting (BEPS) 2.0 framework will help global economies recover from the dual challenges of the COVID-19 pandemic and the war in Ukraine. Secretary Yellen further said in a 13 April speech: "This tax deal is necessary to end the race to the bottom in corporate taxes and to reform profit reallocation rules that, by demanding a physical nexus to a taxing jurisdiction, no longer reflect modern economic realities." She added that, "by ensuring that profitable corporations pay their fair share and operate on a level playing field, the [BEPS 2.0] deal will provide governments around the world the resources they need to invest in their people and economies." The comments were made ahead of a G-20 Finance Ministers meeting taking place during an upcoming International Monetary Fund/World Bank meeting on 18-23 April.

The IRS this week released eight new Schedules K-2 and K-3 Frequently Asked Questions (FAQs) (Forms 1065, 1120S, and 8865).The FAQs add to previously issued FAQs issued in February. Schedules K-2 and K-3 are new reporting forms that pass-through entities generally must complete, beginning in the 2021 tax year. According to the IRS, the new schedules K-2 and K-3 "improve reporting by standardizing international tax information to partners and flow-through investors, making it easier for them to report these items on their tax returns."

The Senate Foreign Relations Committee has released its report on the proposed 2010 US-Chile income tax treaty. The committee reported the treaty out of committee favorably with two reservations and one declaration. The committee recommended that the Senate give its advice and consent to ratification of the convention, as explained in the report.

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Upcoming Webcasts

Leverage data and AI to enable Finance and Tax to pioneer transformation throughout the organization (April 28)
During this EY Webcast, Ernst & Young professionals and Microsoft discuss how data and AI enable the transformation of the Finance and Tax functions to accelerate meaningful change and improve business outcomes.

Work reimagined: How to prepare for ‘renaissance and recommitment’ (May 17)
In this EY Webcast, we will explore the results of the newly released EY 2022 Work Reimagined Survey, which included more than 17,000 employees and 1,500 employers across 22 countries.

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EY Guides and Publications

QUEST Economic Update highlights key US and global economic trends - April 13, 2022
EY's Quantitative Economics and Statistics (QUEST) group has developed this publication summarizing the latest key economic and employment trends in a short, easy-to-read format. Developments such as growth trends in US gross domestic product (GDP), US employment and Federal Reserve activity are highlighted, as are economic trends outside the United States that may affect US businesses.

EY's 2021-22 Worldwide Personal Tax and Immigration Guide
Chapter by chapter, from Albania to Zimbabwe, we summarize personal tax systems and immigration rules in more than 150 jurisdictions. The content is current on July 1, 2021 with exceptions noted. Please note that only some of the chapters in this Guide reflect COVID-19 tax policy measures.

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Recent Tax Alerts

Canada & Latin America

Europe

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Recent Newsletters

Washington Dispatch
   Highlights of this edition include:

Legislation

  • Biden Administration releases FY2023 Budget with several new international tax proposals
  • Congress passes omnibus appropriations bill with no tax title; Democrats still hope for reconciliation package
  • Senate Finance Committee Chairman supports tax sanctions for Russia, Belarus

Treasury and IRS news

  • Final FTC regulations will be revisited to address BEPS 2.0 Pillar Two rules
  • Proposed PTEP regulations coming second half of 2022

Tax Treaties

  • Senate Foreign Relations Committee reports out proposed US-Chile tax treaty

OECD Developments

  • OECD releases Commentary and illustrative examples on Pillar Two Model Rules

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IRS Weekly Wrap-Up

Internal Revenue Bulletin

 2022-16Internal Revenue Bulletin of April 18, 2022

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Additional Resources

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.

Document ID: 2022-0627

 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

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