November 13, 2022
U.S. International Tax This Week for November 11
Ernst & Young's U.S. International Tax This Week newsletter for the week ending November 11 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.
The outcome of the mid-term Congressional election on 8 November remains unresolved, with control of both the House and Senate unclear at this time. Which political party controls one or both chambers will influence what can be attached to must-pass legislation in the lame-duck session to extend government funding beyond its 16 December expiration, including whether there will be a tax package and what it would include. The election results will also establish the policy direction for Congress on tax and many other issues for the next two years. Tax committee leaders quoted in the press before the election suggested that they expected that there would be a year-end tax package, though members could opt to push some business into next year depending on who controls Congress when it reconvenes next year.
The House and Senate have been out of session in the lead up to the mid-term election. The Senate will return to Washington on 14 November.
An Internal Revenue Service (IRS) official on 7 November was quoted as saying that the proposed foreign tax credit regulations will be released within the next 10 days. According to the official, the notice of proposed rulemaking "was largely done quite a long time ago. … Certain aspects and certain parts of the process have kept it from being released," he said, hinting that taxpayers may be pleased with how the government will address the cost recovery rules in the proposed regulations.
The IRS official confirmed that they remain largely focused on the new corporate alternative minimum tax (CAMT). In terms of CAMT guidance, the official said: "There will be a notice of some kind this year, likely to cover none of the international issues, likely to cover more big picture — the ones that have been in the press about recognition transactions, nonrecognition transactions." A second notice will follow soon after, not before the end of the year but "in time for first-quarter stuff," he said.
Treasury and the IRS on 4 November released the 2022—2023 Priority Guidance Plan. The plan contains 205 guidance projects that are priorities for allocating Treasury Department and IRS resources during the 12-month period from 1 July 2022 through 30 June 2023.
In a 3 November letter to Treasury Secretary Janet Yellen and Secretary of State Antony Blinken, House Ways and Means Committee Ranking member Kevin Brady, Senate Finance Committee Ranking Member Mike Crapo, and Senate Foreign Relations Committee Ranking Member Jim Risch expressed concern about Treasury terminating the US-Hungary tax treaty. "As we approach the end of the six-month advance-notice period to terminate the Treaty, we urge the Administration to reverse this decision and reengage with our treaty partner to ensure the United States upholds our treaty commitments." The treaty is scheduled to terminate in January 2023, absent action by the US.
Further, President Biden on 10 November announced that he was nominating former acting IRS commissioner Daniel Werfel to lead the IRS. The position requires Senate confirmation.
BorderCrossings ... With EY transfer pricing and tax professionals (November 17)
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.
Tax in the time of COVID-19: Update on legislative, economic, regulatory and IRS developments (November 18)
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.
Global Treasury: Key tax trends and topics to consider for 2023 (December 8)
During this EY Webcast, a global EY panel will discuss key tax trends and topics that will affect global treasury activity in 2023. This session will cover, in particular, multinationals’ cash management and risk management activities, as well as the potential effect of Pillar Two and the trends in financial transaction transfer pricing controversy.
Omnishoring: Recent trends in supply chain, tax and global trade (December 13)
During this EY Webcast, a global EY panel will discuss the current factors that affect supply chain. This session will cover the macroeconomic, geopolitical and operational trends driving multinationals to reconsider the resilience of their supply chain across the manufacturing, logistics, distribution and sales functions.
Recent Tax Alerts
— Nov 10: US DHS implements Deferred Action for Childhood Arrivals Final Rule (Tax Alert 2022-1690)
— Nov 08: High Court of Kenya will not address grounds for objection not originally presented at the appellate level (Tax Alert 2022-1677)
Canada & Latin America
— Nov 09: Paraguay publishes new immigration law (Tax Alert 2022-1680)
— Nov 07: El Salvador's Tax Code reforms to implement electronic invoicing are approved (Tax Alert 2022-1670)
— Nov 04: Uruguay's Government enacts law for accountability for 2021 (Tax Alert 2022-1664)
— Nov 04: Canada's Federal Fall Economic Statement 2022 discussed (Tax Alert 2022-1662)
— Nov 10: UK implements new policy regarding the reporting of foreign workers’ employment start dates (Tax Alert 2022-1691)
— Nov 10: EU Finance Ministers agree on Code of Conduct mandate reform (Tax Alert 2022-1687)
— Nov 09: UK announces changes to multiple visitor and worker categories (Tax Alert 2022-1683)
— Nov 08: German Government releases draft legislation for a Single-Use Plastics levy in Germany (Tax Alert 2022-1676)
— Nov 08: Italy publishes guidance regarding taxation of trusts in Italy (Tax Alert 2022-1675)
— Nov 04: OECD releases outcomes of fifth peer review on BEPS Action 13 and updates CbCR guidance (Tax Alert 2022-1666)
— Nov 10: Turkey enacts new law amending various tax laws (Tax Alert 2022-1689)
— Nov 10: UAE issues new Tax Procedures Decree Law (Tax Alert 2022-1686)
Highlights of this edition include:
Treasury and IRS news
- Proposed FTC regs release expected soon, PTEP regs in first half of 2023
- Treasury official says proposed crypto regs coming before year end
Transfer pricing news
- IRS may be more selective on APAs given availability of ICAP in transfer pricing disputes
- IRS to reconsider APA revenue procedure guidance
Tax treaty news
- Treasury developing measures for future treaties to address new tax regimes, new US-Croatia treaty before year end
- G20 Finance Ministers welcomed progress made on BEPS 2.0, called for swift implementation
- OECD releases public consultation document on administration and tax certainty aspects of Amount A of Pillar One
- OECD releases report on interaction of Tax Incentives and Pillar Two
- OECD/G20 Inclusive Framework held 14th plenary meeting and published 6th annual progress report
IRS Weekly Wrap-Up
Internal Revenue Bulletin
| ||2022-46||Internal Revenue Bulletin of November 14, 2022|
EY’s Tax News Update, 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’s Tax and Law Guides. Tax and Law Guides | EY - Global 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.