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August 14, 2022

U.S. International Tax This Week for August 12

Ernst & Young's U.S. International Tax This Week newsletter for the week ending August 12 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.


This week started off with the news that on 7 August, the Senate approved the Inflation Reduction Act (IRA) of 2022 (H.R. 5376), voting 51-50 along party lines, with Vice President Kamala Harris breaking the tie. The bill includes climate and energy provisions and an extension of enhanced Affordable Care Act (ACA) subsidies paid for by a 15% corporate alternative minimum tax (CAMT) on adjusted financial statement income for corporations with profits over $1 billion, a stock buyback tax, increased Internal Revenue Service enforcement funding, and prescription drug provisions, including permitting Medicare to negotiate certain prescription drug prices. On 12 August, the House reconvened to consider the Senate bill (at the time of publication, the House is still in debate but the bill is expected to be passed).

The bill, which stalled late last year when negotiations broke down between the White House and Senator Joe Manchin, gained traction again this July in a much smaller form with a deal backed by Senate Majority Leader Chuck Schumer and Senator Manchin. The deal, announced on 27 July, was joined by Senator Kyrsten Sinema, with changes, on 4 August.

The revised text of the measure, released on 6 August, modified the 27 July compromise reached between Senator Joe Manchin and Senate Majority Leader Chuck Schumer including by: (1) dropping the carried interest holding period provision; (2) adding a 1% stock buyback tax; and (3) making certain changes to CAMT language with respect to depreciation for tangible assets and amortization deductions for qualified wireless spectrum.

In other legislative news, on 9 August, President Joe Biden signed the CHIPS and Science Act (H.R. 4346), a $280 billion package that provides incentives for companies to produce semiconductor chips domestically and authorizes future appropriations for research.

President Biden has said, "As Americans are worried about the state of the economy and the cost of living, the CHIPS bill is one answer: It will accelerate the manufacturing of semiconductors in America, lowering prices on everything from cars to dishwashers. It also will create jobs — good-paying jobs right here in the United States."

The CHIPS and Science Act, where CHIPS stands for Creating Helpful Incentives to Produce Semiconductors, includes $52.7 billion in funding for semiconductor manufacturing subsidies, grants and loans. $24 billion is marked to be spent in fiscal 2022.

Upcoming Webcasts

Tax in the time of COVID-19: update on legislative, economic, regulatory and IRS developments (August 19)

During this EY 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.

BorderCrossings (August 25)
During this EY Webcast, Ernst & Young transfer pricing and tax professionals will help you stay informed and able to adopt a more proactive stance in developing and defending your transfer pricing policies and practices.

Recent Tax Alerts


— Aug 11: High Court of Kenya reiterates importance of submission of proper documentation during the appeal process (Tax Alert 2022-1214)

— Aug 09: Ghana to launch new e-Visa system for expedited visa application processing (Tax Alert 2022-1209)

— Aug 09: Ghana issues 2022 Mid-year Budget Review Statement (Tax Alert 2022-1203)


— Aug 08: Indian Tax Administration mandates nonresident taxpayers to furnish information electronically to avail Double Taxation Avoidance Agreements benefits (Tax Alert 2022-1199)

Canada & Latin America

— Aug 10: Chile's Congress to discuss tax reform proposal (Tax Alert 2022-1212)

— Aug 10: Ontario re-introduces its 2022 budget bill (Tax Alert 2022-1211)

— Aug 05: Uruguay's tax authority clarifies tax treatment of profit repatriations paid by a permanent establishment under double tax treaty (Tax Alert 2022-1196)


— Aug 08: Spain announces new Teleworking Visa and Residence Permit for remote workers (Tax Alert 2022-1202)

— Aug 05: Ireland provides guidance on tax deductibility of Digital Services Taxes (Tax Alert 2022-1194)


— Aug 05: Australian Treasury releases Discussion Paper on new thin cap rules, royalty deduction rules and public tax disclosure rules (Tax Alert 2022-1191)

Recent Newsletters

Washington Dispatch

   Highlights of this edition include:


  • Manchin reach agreement on $740b budget reconciliation bill with 15% corporate minimum tax
  • US Congress passes Creating Helpful Incentives to Produce Semiconductors (CHIPS) bill with investment tax credits and incentives

IRS news

  • Treasury and IRS publish technical corrections to final foreign tax credit regulations
  • IRS proposed regulations would limit Section 1256 mark-to-market accounting for foreign currency contracts to foreign currency forward contracts
  • US Treasury announces termination of tax treaty with Hungary

OECD Developments

  • OECD releases Progress Report on Amount A of Pillar One of BEPS 2.0 project
  • G20 Finance Ministers reiterate commitment to BEPS 2.0 two-pillar implementation and call for action to finalize work

IRS Weekly Wrap-Up

Internal Revenue Bulletin

 2022-33Internal Revenue Bulletin of August 15, 2022

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.