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July 24, 2022
2022-1113

U.S. Tax This Week for July 22

Ernst & Young's U.S. Tax This Week newsletter for the week ending July 22 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.

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Top of the Week

G20 Finance Ministers reiterate commitment to BEPS 2.0 two-pillar implementation and call for action to finalize work

On 15-16 July, the G20 Ministers of Finance and Governors of Central Banks met in Bali, Indonesia. The meeting was attended by G20 members, invited countries (including Ukraine), and international and regional organizations. The G20 Chair's summary issued at the conclusion of the meeting includes a reiteration of the G20 Finance Ministers' ongoing commitment to implement the agreement on the G20/Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) 2.0 two-pillar international tax package. The summary includes a call for action to finalize Pillar One, including by signing the Multilateral Convention (MLC) in the first half of 2023, and to complete the negotiations that would allow the development of the Multilateral Instrument for implementation of the Subject to Tax Rule (STTR) under Pillar Two. EY Tax Alert 2022-1093 has details.

IRS addresses normalization requirements of surcharge rate calculations for public utility

In PLR 202227002, the IRS addressed an earlier ruling regarding the normalization requirements of surcharge rate calculations and net operating loss carryovers (NOLCs) after the NOL calculations were changed in compliance with a state court holding. EY Tax Alert 2022-1108 has details.

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EY Guides, Surveys, and Reports

Asean Mobility Spotlight (July 2022)
In this edition of the Asean Mobility Spotlight, we address the topic of employers' responsibility in ASEAN jurisdictions on complying with tax withholding or annual tax filing obligations of employees' remuneration.

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Upcoming Webcasts

Financing the energy transition — US tax equity arrangements (July 28)
Tax equity arrangements are commonplace in wind and solar projects, and are expected to play a meaningful role in carbon capture and sequestration projects (and other future energy transition projects). During this EY Webcast, Ernst & Young professionals will discuss both tax and nontax aspects (including financing) of tax equity arrangements.

Tax in the time of COVID-19: update on legislative, economic, regulatory and IRS developments (July 29)
During this EY Webcast, Ernst & Young professionals will provide updates on: (i) The US economy and tax policy; (ii) Breaking developments; and (iii) What's happening at the IRS.

Private equity and private capital — navigating transformative global and US legislative change (August 18)
During this EY Webcast, Ernst & Young professionals will discuss recent private equity and private capital industry trends and the outlook for US and international legislative and regulatory changes relevant to PE and alternative funds, transactions and portfolio companies.

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Recent Tax Alerts

Courts

— Jul 19: Tax Court concludes both IRS and estate misunderstood distinction between 'depository' and 'drawee' banks (Tax Alert 2022-1095)

Internal Revenue Service

— Jul 21: IRS addresses normalization requirements of surcharge rate calculations for public utility (Tax Alert 2022-1108)

— Jul 18: IRS properly denied charitable deduction for partnership interest given to private foundation absent appropriate contemporaneous written acknowledgement (Tax Alert 2022-1087)

— Jul 15: IRS updates and extends simplified method for requesting more time to file a portability election (Tax Alert 2022-1077)

— Jul 15: QUEST Economic Update highlights key US and global economic trends - July 15, 2022 (Tax Alert 2022-1076)

International

— Jul 21: Brazilian Federal Revenue Service and the Inter-American Development Bank hold seminar as part of process to present new Brazilian transfer pricing system (Tax Alert 2022-1112)

— Jul 21: UK Government releases documents for consultation prior to Finance Bill 2022/23 (Tax Alert 2022-1107)

— Jul 21: New Hungarian transfer pricing rules impose additional reporting requirements and require adjustments to the median (Tax Alert 2022-1106)

— Jul 21: Poland Tax Authority’s approach may lead to potential issues when applying withholding tax relief at source based on management board's statement (Tax Alert 2022-1105)

— Jul 20: Costa Rica begins accepting applications for Digital Nomad Visas (Tax Alert 2022-1103)

— Jul 20: Italy’s sugar tax will enter into force on 1 January 2023 (Tax Alert 2022-1101)

— Jul 20: Global Tax Policy and Controversy Watch | July 2022 edition (Tax Alert 2022-1099)

— Jul 20: The Latest on BEPS and Beyond | July 2022 edition (Tax Alert 2022-1094)

— Jul 19: G20 Finance Ministers reiterate commitment to BEPS 2.0 two-pillar implementation and call for action to finalize work (Tax Alert 2022-1093)

— Jul 19: Canada resumes mandatory random testing for fully vaccinated air travelers (Tax Alert 2022-1092)

— Jul 19: USCIS to implement second phase of premium processing expansion for certain pending multinational manager/executive and national interest waiver petitions (Tax Alert 2022-1091)

— Jul 18: Honduras joins the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (Tax Alert 2022-1088)

— Jul 18: China’s new Stamp Duty Law is now in effect (Tax Alert 2022-1086)

— Jul 18: The Netherlands issues new decree on profit attribution to permanent establishments (Tax Alert 2022-1083)

— Jul 15: Uruguay's Executive Power presents accountability bill for 2021 to Parliament (Tax Alert 2022-1079)

— Jul 15: Uruguay's Administrative Contentious Court strikes down portion of decree regulating free trade zones (Tax Alert 2022-1078)

— Jul 15: Italian Court of Cassation holds domestic regime is applicable on distributions to nonresident mutual funds (Tax Alert 2022-1074)

— Jul 15: Israel adopts BEPS Action 13 principles (Tax Alert 2022-1073)

— Jul 15: OECD releases Progress Report on Amount A of Pillar One of BEPS 2.0 project: A detailed overview (Tax Alert 2022-1071)

— Jul 15: Portugal publishes guidance on contribution for single-use packaging made of plastic or multi-material with plastic in Portugal (Tax Alert 2022-1065)

— Jul 15: South African Revenue Service implements new protocol for estimated assessments (Tax Alert 2022-1064)

Legislation

— Jul 22: What to expect in Washington (July 22) (Tax Alert 2022-1117)

— Jul 20: CMS issues proposed CY2023 Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System proposed rule (Tax Alert 2022-1102)

States

— Jul 19: Idaho law retroactively lowers 2022 top personal income tax rate, new withholding tables issued for employers (Tax Alert 2022-1096)

— Jul 18: Pennsylvania enacts corporate income tax rate reduction and other tax changes (Tax Alert 2022-1085)

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Recent Newsletters

State and Local Tax Weekly
   Highlights of this edition include:

— "Final updates" to New York's draft business corporate franchise tax regulations will affect all industries. On July 1, 2022, the New York State Department of Finance and Taxation Department posted "final updates" to its Part 4, apportionment regulations (draft apportionment regulations).

— Income/Franchise, Sales & Use, Business Incentives, Controversy, Payroll & Employment Tax, Miscellaneous Tax

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IRS Weekly Wrap-Up

Revenue Rulings

 2022-13Applicability of section 432(b)(7) following a merger involving a multiemployer defined benefit plan that has received special financial assistance
 2022-14Section 1274.—Determination of Issue Price in the Case of Certain Debt Instruments Issued for Property

Internal Revenue Bulletin

 2022-30Internal Revenue Bulletin of July 25, 2022

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.

 

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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