December 22, 2022
U.S. Tax This Week for December 23
Ernst & Young's U.S. Tax This Week newsletter for the week ending December 23 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.
Top of the Week
IRS allows taxpayers to automatically change their accounting method to comply with TCJA changes to IRC Section 174
In Revenue Procedure 2023-8, released December 12, 2022, under IRC Section 446 and Treas. Reg. Section 1.446-1(e), the IRS allows taxpayers to obtain automatic consent to change the accounting method for "specified research or experimental expenditures" (specified R&E expenditures) to comply with IRC Section 174, as amended by the Tax Cuts and Jobs Act (TCJA). EY Tax Alert 2022-1910 has details.
OECD releases consultation document on tax certainty for the Pillar Two GloBE rules
On 20 December 2022, the OECD released a consultation document on Tax Certainty for the GloBE Rules, in connection with the ongoing OECD/G20 project on Addressing the Tax Challenges Arising from the Digitalisation of the Economy (the BEPS 2.0 project). The document seeks input from stakeholders to inform the OECD/G20 Inclusive Framework's ongoing work on tax certainty for the GloBE Rules. EY Tax Alert 2022-1936 has details.
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.
Tax in a time of transition: Legislative, economic, regulatory and IRS developments (January 20)
Previously this Webcast was Tax in the time of COVID; same series, new name.
During this EY Webcast, Ernst & Young professionals will provide updates on: (i) the US economy and tax policy; (ii) what’s happening at the IRS; and (iii) breaking developments.
How life sciences tax departments are preparing for sustainability (January 24)
During this EY Webcast, Ernst & Young professionals will explore sustainability tax trends and global developments in the life sciences sector. EY teams of life sciences and sustainability tax thought leaders will discuss, and share their perspectives on emerging trends and hot topics relevant to this market.
Recent Tax Alerts
Internal Revenue Service
— Dec 21: Proposed regulation could increase 2022 income for certain consolidated groups (Tax Alert 2022-1933)
— Dec 21: Tax M&A Update for November 2022 (Tax Alert 2022-1927)
— Dec 19: IRS allows taxpayers to automatically change their accounting method to comply with TCJA changes to IRC Section 174 (Tax Alert 2022-1910)
— Dec 19: Draft instructions for 2022 partnership Schedules K-2 and K-3 incorporate previous guidance, include new domestic filing exception (Tax Alert 2022-1909)
— Dec 16: QUEST Economic Update highlights key US and global economic trends - December 16, 2022 (Tax Alert 2022-1900)
— Dec 15: IRS issues final regulations on excepting special enforcement matters under the centralized partnership audit regime with some clarifications (Tax Alert 2022-1885)
— Dec 21: OECD releases consultation document on Pillar Two GloBE Information Return (Tax Alert 2022-1929)
— Dec 21: OECD/G20 Inclusive Framework releases document on safe harbors and penalty relief under Pillar Two GloBE rules (Tax Alert 2022-1928)
— Dec 21: European Parliament and Council reach provisional agreement on EU Emission Trading System reform with implications for EU Carbon Border Adjustment Mechanism (Tax Alert 2022-1926)
— Dec 21: UAE begins to issue Electronic Residency Visas to replace physical stamping of passports (Tax Alert 2022-1924)
— Dec 21: Saudi Arabia becomes a signatory to the Apostille Convention (Tax Alert 2022-1923)
— Dec 20: The Latest on BEPS and Beyond | December 2022 (Tax Alert 2022-1919)
— Dec 20: French Parliament approves Finance Bill for 2023 (Tax Alert 2022-1917)
— Dec 19: Singapore announces new Manpower for Strategic Economic Priorities Scheme (Tax Alert 2022-1911)
— Dec 19: Ireland agrees in principle to create new single-permit system for third-country nationals (Tax Alert 2022-1905)
— Dec 19: Peruvian Tax Authority rules that reverse merger between nonresident entities triggers indirect transfer of Peruvian shares (Tax Alert 2022-1904)
— Dec 19: Luxembourg Budget Law 2023 enacts clarification to Reverse Hybrid Entity Rule (Tax Alert 2022-1903)
— Dec 16: Thailand amends provisions of Civil and Commercial Code related to business combinations (Tax Alert 2022-1899)
— Dec 16: Hong Kong passes bill on refined foreign-sourced income exemption regime (Tax Alert 2022-1898)
— Dec 16: Swiss Parliament approves domestic BEPS 2.0 Pillar Two implementation | Constitutional amendment now subject to public vote (Tax Alert 2022-1897)
— Dec 16: Canada's Bill C-32 to implement certain Budget 2022 and other previously announced measures receives Royal Assent (Tax Alert 2022-1895)
— Dec 16: UAE introduces transfer pricing rules as part of Corporate Tax Law (Tax Alert 2022-1894)
— Dec 16: Uruguay’s Ministry of Economy and Finance issues decree regulating law that modifies Uruguayan CIT source criteria (Tax Alert 2022-1893)
— Dec 16: EU Member States unanimously adopt Directive implementing Pillar Two Global Minimum Tax rules (Tax Alert 2022-1892)
— Dec 15: China releases 2021 annual report on Advance Pricing Arrangements (Tax Alert 2022-1888)
— Dec 15: United States and Croatia sign income tax treaty (Tax Alert 2022-1886)
— Dec 15: Croatia to join the Schengen Area on January 1, 2023 (Tax Alert 2022-1884)
— Dec 21: What to expect in Washington (December 21) (Tax Alert 2022-1922)
— Dec 20: $1.7 trillion fiscal year 2023 omnibus appropriations package includes key health, retirement provisions (Tax Alert 2022-1921)
— Dec 21: Recent state law developments could affect tax-exempt organizations (Tax Alert 2022-1932)
— Dec 21: Washington Tax Reform Work Group recommends replacing business and occupation tax with Texas-style margins tax (Tax Alert 2022-1931)
— Dec 21: State minimum wage rates effective January 1, 2023 (Tax Alert 2022-1930)
— Dec 20: 2023 state disability, paid family and medical leave and long-term care insurance wage base and rates (Tax Alert 2022-1920)
— Dec 19: A preliminary look at the 2023 SUI taxable wage bases as of December 19, 2022 (Tax Alert 2022-1913)
— Dec 15: Pennsylvania employee withholding for SUI is increased for 2023; employer SUI contributions also increase (Tax Alert 2022-1883)
State and Local Tax Weekly
Highlights of this edition include:
— 2022 state tax legislative round-up. The 2022 state legislative sessions have come to an end in most states that were in session this year. While no state enacted major tax reform, many states enacted a wide variety of tax law changes impacting businesses and individuals.
— California cities of Los Angeles and Santa Monica approve ballot measures to impose new real estate transfer taxes at significantly higher rates. On Nov. 8, 2022, California voters in Los Angeles and Santa Monica approved ballot measures to impose increased real estate transfer taxes on certain real property sales or transfers.
— Income/Franchise, Sales & Use, Business Incentives, Property Tax, Controversy, Payroll & Employment Tax, Miscellaneous Tax
IRS Weekly Wrap-Up
| ||2023-01||Section 1274.—Determination of Issue Price in the Case of Certain Debt Instruments Issued for Property|
| ||2023-04||Calculating the qualifying payment amounts in 2023|
| ||2023-05||Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates|
| ||2023-06||Sustainable Aviation Fuel Credit; Registration; Certificates; Request for Public Comments|
| ||2023-08||Additional Guidance Related to Transfers of Publicly Traded Partnership Interests under Section 1446(f)|
Internal Revenue Bulletin
| ||2022-51||Internal Revenue Bulletin of December 19, 2022|
Because the matters covered herein are complicated, U.S. 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.