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December 11, 2022
2022-1844

U.S. International Tax This Week for December 9

Ernst & Young's U.S. International Tax This Week newsletter for the week ending December 9 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

Congress appears to be moving toward a short-term continuing resolution (CR) to fund the government past the 16 December deadline and into early 2023, based on comments from Republican House and Senate leaders this week. While negotiations on an omnibus spending bill to be completed before the end of the year are continuing, that possibility is fading. Senate Minority Leader Mitch McConnell said on 6 December that a short-term CR to fund the government may be necessary as omnibus talks failed to bear fruit.

The approach to government funding will affect whether a tax package and other items can be appended to the bill. There is speculation that passage of a stopgap CR instead of an omnibus spending package will adversely affect the possible enactment of tax provisions, such as the IRC Section 174 research and development and IRC Section 163(j) interest deduction Tax Cuts and Jobs Act cliffs, tax extenders, as well as other items.

Also worth noting this week, Senator Raphael Warnock won the 6 December Georgia Senate runoff election, initially meaning that Democrats would hold a 51-49 advantage in the Senate next year and have majorities on committees. But in a surprise announcement on 8 December, Senator Kyrsten Sinema said that she will leave the Democratic Party and register as an Independent. It is not clear at this time if Senator Sinema will caucus with Senate Democrats and what, if any, implications the switch will have for the balance of power in the Senate.

Treasury this week announced the signing of a first-ever US-Croatia Income Tax Treaty on 7 December. According to the Treasury press release, the proposed convention is based on the US Model Income Tax Treaty.

The OECD on 8 December issued a public consultation document on the main design elements of Amount B under BEPS Pillar One relating to the simplification of transfer pricing rules. Public comments on various specific questions are due by 25 January 2023.

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Upcoming Webcasts

Omnishoring: Recent trends in supply chain, tax and global trade (December 13)
During this EY Webcast, Ernst & Young professionals 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.

Tax in the time of COVID-19: update on legislative, economic, regulatory and IRS developmentse (December 16)
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.

BEPS 2.0: New OECD releases and ongoing implementation activity (January 12)
During this EY Webcast, Ernst & Young professionals will examine the latest OECD releases on both Pillars and explore the growing legislative activity as jurisdictions begin to incorporate global minimum tax rules into their domestic law. Please join EY professionals for this webcast.

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Recent Tax Alerts

Africa

— Dec 08: Kenya Court of Appeal upholds decision of the High Court of Kenya and declares minimum tax unconstitutional (Tax Alert 2022-1830)

— Dec 07: Kenya signs MCAA for Exchange of Country-by-Country reports | Implications for MNEs operating in Kenya (Tax Alert 2022-1818)

Asia

— Dec 07: Malaysia's Long-Term Pass holders now eligible to use Autogate facility at two Malaysian airports (Tax Alert 2022-1828)

— Dec 05: Singapore passes Goods and Services Tax (Amendment) Bill 2022 (Tax Alert 2022-1809)

Canada & Latin America

— Dec 08: Brazil and United Kingdom sign comprehensive double tax treaty (Tax Alert 2022-1839)

— Dec 07: Argentine Congress approves Budget bill for 2023 (Tax Alert 2022-1825)

— Dec 07: Peruvian Tax Authority introduces rules for online payment of taxes by nonresidents (Tax Alert 2022-1820)

— Dec 06: Uruguay updates conditions for employees to work remotely under Free Trade Zone regime (Tax Alert 2022-1791)

Europe

— Dec 08: Italy releases initial draft of 2023 Budget Law (Tax Alert 2022-1842)

— Dec 08: UK Border Force strike announced from December 23 to 31 (Tax Alert 2022-1840)

— Dec 08: Switzerland's Service Mobility Agreement with UK extended until December 31, 2025 (Tax Alert 2022-1836)

— Dec 07: Netherlands publishes new salary requirements for 2023 (Tax Alert 2022-1829)

— Dec 07: Poland issues draft regulations on mandatory electronic invoicing (Tax Alert 2022-1826)

— Dec 07: Netherlands issues favorable withholding tax Decree dealing with disregarded entities (Tax Alert 2022-1821)

— Dec 06: EU Member States give final approval to Foreign Subsidies Regulation (Tax Alert 2022-1814)

— Dec 05: UK provides updated list of Immigration Skills Charge exemptions effective January 1, 2023 (Tax Alert 2022-1811)

— Dec 05: Global Portuguese consular workers' strike cancelled (Tax Alert 2022-1810)

— Dec 02: Portuguese consular workers announce global strike as of December 5 (Tax Alert 2022-1804)

— Dec 02: German Bundestag approves Annual Tax Act 2022 and addresses extraterritorial taxation of IP (Tax Alert 2022-1800)

— Dec 02: Switzerland's 2023 work permit quotas for EEA, non-EEA and UK nationals to remain unchanged (Tax Alert 2022-1799)

— Dec 02: Spain passes final version of bill creating new Teleworking Visa and Permit (Tax Alert 2022-1797)

— Dec 02: CJEU annuls European Commission’s decision on State aid granted by Luxembourg to a financing company (Tax Alert 2022-1796)

Middle East

— Dec 06: Saudi Arabia extends tax amnesty initiative (Tax Alert 2022-1802)

Multinational

— Dec 08: OECD releases corporate tax statistics and the 2022 revenue statistics and consumption tax trends (Tax Alert 2022-1831)

— Dec 05: OECD's 2021 mutual agreement procedure statistics show US continues to decrease case inventory (Tax Alert 2022-1815)

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IRS Weekly Wrap-Up

Internal Revenue Bulletin

 2022-50Internal Revenue Bulletin of December 12, 2022

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Additional Resources

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.

 

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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