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December 25, 2022

U.S. International Tax This Week for December 23

Ernst & Young's U.S. International Tax This Week newsletter for the week ending December 23 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.


Congress passed a $1.7 trillion omnibus spending bill on 22 December, sending the 4,155-page bill to President Biden for signature. After much negotiation, the final bill did not include business tax provisions such as modifications to IRC Section 163(j) or relief from the IRC Section 174 research and development amortization requirement — both of the Tax Cuts and Jobs Act cliffs that took hold this year — nor tax extenders or an expanded Child Tax Credit.

Treasury this week announced a timeline for providing additional information on key tax provisions of the Inflation Reduction Act to be completed by the end of the year. Importantly, Treasury indicated that it plans to provide initial guidance on the corporate alternative minimum tax as well as on the stock buyback excise tax, among other information, all before 31 December.

The Internal Revenue Service (IRS) on 21 December released Notice 2023-08, offering additional guidance for brokers to comply with IRC Section 1446(f) final regulations that relate to withholding on the transfer of an interest in a publicly traded partnership (PTP). Specifically, Treasury and the IRS announced their intention to issue proposed regulations that would amend the final regulations to implement this additional guidance.

According to the tax press, a senior Treasury official this week said that the existing global intangible low-taxed income (GILTI) regime needs to be reformed to conform better with the Base Erosion and Profit Shifting (BEPS) global anti-base erosion (GloBE) rules. In the meantime, Congressional Republican lawmakers are continuing to voice concerns regarding the BEPS Pillar Two rules. In a 14 December letter to Treasury Secretary Janet Yellen, all Republican members of the Senate Finance Committee and House Ways and Means Committee as well as the ranking member of the Senate Foreign Relations Committee addressed the Pillar Two undertaxed profits rule (UTPR): "Despite the United States being the only country to implement a global minimum tax, this Administration has agreed to allow foreign countries to impose additional tax on U.S. companies' U.S. profits under the UTPR." The letter goes on to say that the Biden Administration "has routinely made commitments in the OECD negotiations it has no authority to fulfill … . . The Administration cannot continue to ignore the fundamental problems with the [BEPS] Pillar Two Agreement. … While the Administration may treat these Rules as final, we do not."

On 20 December, the Organisation for Economic Co-operation and Development (OECD) released a new consultation document titled, Pillar One — Amount A: Draft Multilateral Convention Provisions on Digital Services Taxes and other Relevant Similar Measures. The draft multilateral convention provisions reflect the commitment to remove all existing Digital Services Taxes and other similar relevant measures and to refrain from enacting such provisions in the future. According to an OECD press release, the latest consultation document, which follows the recent release of the consultation document on Amount B, completes the consultation on "all the building blocks of BEPS Pillar One."

On the same day, the OECD issued several Pillar Two documents, including a consultation document on the Pillar Two GloBE Information Return and two additional documents related to the implementation package for Pillar Two: guidance on safe harbors and penalty relief and another public consultation document on tax certainty for the GloBE rules.

Upcoming Webcasts

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


— Dec 19: Singapore announces new Manpower for Strategic Economic Priorities Scheme (Tax Alert 2022-1911)

— 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)

Canada & Latin America

— Dec 22: Canada introduces new Labor Market Impact Assessment exemption codes under International Mobility Program (Tax Alert 2022-1940)

— Dec 22: Canada passes prohibition on the purchase of residential property by non-Canadians (Tax Alert 2022-1939)

— Dec 19: Peruvian Tax Authority rules that reverse merger between nonresident entities triggers indirect transfer of Peruvian shares (Tax Alert 2022-1904)

— 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: Uruguay’s Ministry of Economy and Finance issues decree regulating law that modifies Uruguayan CIT source criteria (Tax Alert 2022-1893)


— Dec 22: Spain implements EU Country-by-Country Reporting Directive applicable as of 22 June 2024 (Tax Alert 2022-1944)

— Dec 22: Poland experiences increase in withholding tax collection due to introduction of "pay and refund" regime (Tax Alert 2022-1943)

— Dec 22: UK issues updated technical note and draft legislation on Electricity Generator Levy (Tax Alert 2022-1938)

— 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 20: French Parliament approves Finance Bill for 2023 (Tax Alert 2022-1917)

— Dec 19: Ireland agrees in principle to create new single-permit system for third-country nationals (Tax Alert 2022-1905)

— Dec 19: Luxembourg Budget Law 2023 enacts clarification to Reverse Hybrid Entity Rule (Tax Alert 2022-1903)

— 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: EU Member States unanimously adopt Directive implementing Pillar Two Global Minimum Tax rules (Tax Alert 2022-1892)

Middle East

— 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 16: UAE introduces transfer pricing rules as part of Corporate Tax Law (Tax Alert 2022-1894)


— Dec 22: OECD releases consultation document on tax certainty for the Pillar Two GloBE rules (Tax Alert 2022-1936)

— 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 20: The Latest on BEPS and Beyond | December 2022 (Tax Alert 2022-1919)

IRS Weekly Wrap-Up

Internal Revenue Bulletin

 2022-52Internal Revenue Bulletin of December 27, 2022

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.