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October 9, 2022
2022-1520

U.S. International Tax This Week for October 7

Ernst & Young's U.S. Tax This Week newsletter for the week ending October 7 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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Spotlight

The Organisation for Economic Co-operation and Development (OECD) released several BEPS 2.0 documents at its 14th plenary meeting of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) on 6 October, including a new consultation document on Pillar One. The consultation document, Progress Report on the Administrative and Tax Certainty Aspects of Amount A of Pillar One, includes "rules on the administration of the new taxing right, including the tax certainty-related provisions," with procedures for in-scope multinationals to comply with the rules. The consultation period on the discussion draft ends on 11 November. The first progress report on Amount A was released in July 2022.

OECD Secretary-General Mathias Cormann this week was quoted as saying that the organization still hopes to finalize the Multilateral Convention to implement Pillar One by mid-2023, with the goal of entry into force in 2024.

On the same day, the OECD also released a report on Pillar Two, Tax Incentives and the Global Minimum CorporateTax. The report addresses the current use of tax incentives in developed and developing countries in the context of the Global Anti-Base Erosion (GloBE) Rules and "shows how they may impact different types of tax incentives differently." To the extent that a country's tax incentives push a multinational's effective tax rate in a jurisdiction below the proposed 15% minimum rate, the multinational potentially would be subject to the top-up taxes under the proposed Pillar Two GloBE rules. The OECD report provides policy considerations for countries as they prepare for implementation of Pillar Two.

Also released was a Roadmap on Developing Countries and International Taxation and a Progress Report on the Tax Inspectors Without Borders initiative.

An OECD official this week was quoted as saying that amendments to the crypto-asset reporting framework (CARF) and common reporting standard (CRS) will be released on 10 October with considerable changes reflecting comments the organization received. The CARF and CRS will be provided to G20 Finance Ministers at their 12-14 October meeting in Washington, DC.

The OECD on 22 March published a Public Consultation Document which proposed new and amended reporting requirements covering reporting of crypto-assets and e-money as well as containing broader revisions to the existing CRS.

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Upcoming Webcasts

US corporate income tax compliance: Insights from Tax Year 2021 and planning for the next age of compliance (October 26)
During this EY Webcast, Ernst & Young professionals will discuss lessons learned from this year’s dynamic compliance environment – and how to plan for the 2022 federal, international and state tax filing season – and beyond.

BorderCrossings . . . With EY transfer pricing and tax professionals (October 27)
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.

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Recent Tax Alerts

United States

— Oct 03: USCIS extends Green Card validity extension to 24 months for Green Card renewals (Tax Alert 2022-1483)

Africa

— Oct 03: South Africa extends expired visas for certain foreigners with pending visa or waiver applications (Tax Alert 2022-1486)

— Oct 03: Kenyan citizens must obtain biometric e-passports by November 30 (Tax Alert 2022-1482)

Asia

— Sep 30: Malaysia announces new DE Rantau Nomad Pass for digital nomads (Tax Alert 2022-1474)

Canada & Latin America

— Oct 06: EY Canada's Tax Matters @ EY for October 2022 (Tax Alert 2022-1513)

— Oct 05: Colombia extends due date to submit initial ultimate beneficial owners' information (Tax Alert 2022-1501)

— Sep 30: Mexico announces electronic Multiple Immigration Forms pilot program at select airports (Tax Alert 2022-1475)

— Sep 30: El Salvador’s Tax Authority publishes list of tax havens for 2023 (Tax Alert 2022-1471)

Europe

— Oct 06: Poland announces expansion of the Poland Business Harbor Program (Tax Alert 2022-1518)

— Oct 06: Finland prohibits certain Russian nationals from entering as tourists (Tax Alert 2022-1512)

— Oct 05: Spain approves legislation on mandatory electronic invoicing (Tax Alert 2022-1507)

— Oct 04: ECOFIN adopts revised list of non-cooperative jurisdictions for tax purposes; Pillar Two Directive not on the agenda (Tax Alert 2022-1500)

— Oct 04: Netherlands announces limitations to 30%-facility (Tax Alert 2022-1496)

— Oct 04: EU Member States politically agree on electricity revenue cap and solidarity contribution of fossil fuel sector (Tax Alert 2022-1488)

— Oct 04: UK Government updates income tax proposal from its mini-Budget (Tax Alert 2022-1485)

— Oct 03: Poland proposes change to shifted profits tax that places burden of proof on the Polish taxpayer (Tax Alert 2022-1484)

— Sep 30: Denmark provides withholding tax exemption for nonresident charities as of 1 January 2023 (Tax Alert 2022-1470)

— Sep 30: Ireland announces Budget 2023 (Tax Alert 2022-1461)

Middle East

— Oct 04: United Arab Emirates outlines changes to short-term and long-term visa categories (Tax Alert 2022-1491)

Oceana

— Oct 04: Australian Treasury releases consultation paper on BEPS 2.0 two-pillar global agreement (Tax Alert 2022-1494)

Multinational

— Oct 05: OECD publishes Manual on Bilateral APAs (Tax Alert 2022-1508)

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Recent Newsletters

ITS/Washington Dispatch
   Highlights of this edition include:

Tax treaties

  • US treaty negotiations with Israel, Switzerland set to start, pending treaties require TCJA updates

>Treasury and IRS news

  • PTEP regs coming in Q1 2023, Section 367(d) guidance possible this year
  • Treasury and IRS to issue proposed regulations on application of noncompulsory payment regs to certain amended Puerto Rico tax decrees
  • IRS Chief Counsel memo clarifies process for determining assessment statute expiration date in multi-year Section 332 liquidation

Transfer pricing news

  • Sixth Circuit rules in favor of Eaton in appeal from Tax Court regarding APA cancellation

OECD developments

  • OECD holds public consultation meeting on Progress Report on Amount A of BEPS Pillar One
  • OECD publishes Manual on Bilateral APAs

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IRS Weekly Wrap-Up

Internal Revenue Bulletin

 2022-41Internal Revenue Bulletin of October 11, 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.

 

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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