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16 October 2022

U.S. International Tax This Week for October 14

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

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Spotlight

The Organisation for Economic Co-operation and Development (OECD) on 10 October released to G20 Finance Ministers and Central Bank Governors a new global tax transparency framework for crypto-assets and amendments to the Common Reporting Standard (CRS). The Finance Ministers and Central Bank Governors were meeting in Washington, DC on 12-13 October. The Crypto-Asset Reporting Framework (CARF) initiative is the result of the rapid adoption of the use of crypto-assets for a wide range of investment and financial uses. According to an OECD press release, "crypto-assets can be transferred and held without the intervention of traditional financial intermediaries, such as banks, and without any central administrator having full visibility on either the transactions carried out or on crypto-asset holdings." The CARF is meant to provide transparency in regard to crypto-asset transactions through automatic exchange of information "with the jurisdictions of residence of taxpayers on an annual basis, in a standardised manner similar to the CRS." The amendments to the CRS are meant to modernize its scope to fully cover digital financial products and also improve its operation.

The OECD on 22 March initiated a public consultation titled "Crypto-Asset Reporting Framework and Amendments to the Common Reporting Standard." The OECD also proposed amendments to the CRS to bring crypto-assets into scope. At the time, the OECD announced plans to launch a comprehensive review of the CRS to improve its operation.

In a recent announcement with regard to the Foreign Account Tax Compliance Act (FATCA), the Internal Revenue Service (IRS) indicated that it has identified "Sponsoring Entities that do not appear to have Sponsored Entities registered in the FATCA Registration System." A Sponsored Entity is a Sponsored Foreign Financial Institution (FFI) or a Sponsored Direct Reporting Non-Financial Foreign Entity (NFFE). Sponsoring entities perform the "the due diligence, withholding, and reporting obligations of one or more Sponsored FFIs, or the due diligence and reporting obligations of one or more Sponsored Direct Reporting NFFEs."

According to the IRS, it will begin requesting Sponsoring Entities to cancel their FATCA agreement if they fail to meet the requirements to be a Sponsoring Entity of Sponsored FFIs and/or Sponsored Direct Reporting NFFEs.

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Upcoming Webcasts

EY Tax.Tech™ Ecosystem series: Unlocking the power of connected tax analytics (October 20)
During this EY Webcast, Ernst & Young professionals will showcase our EY Connected Tax Analytics in Power-BI, leveraging Thomson Reuters integration to supercharge and automate your corporate income tax compliance preparation and review process in ONESOURCE Income Tax. They’ll take you through the latest in use cases and preview what’s ahead.

Tax in the time of COVID-19: Update on legislative, economic, regulatory and IRS developments (October 21)
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 . . . 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

Asia

Canada & Latin America

Europe

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IRS Weekly Wrap-Up

Internal Revenue Bulletin

 2022-42Internal Revenue Bulletin of October 17, 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: 2022-1557

 

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