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22 January 2023

U.S. International Tax This Week for January 20

Ernst & Young's U.S. International Tax This Week newsletter for the week ending January 20 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

On 8 July 2022, Treasury officially began the process of terminating the US-Hungary Tax Treaty (signed in 1979). According to the Treasury Press Release, termination of the Treaty is effective on 8 January 2023, and with respect to taxes withheld at source, the Convention shall cease to have effect on 1 January 2024. On 27 December 2022, the text of a joint statement between the US and Hungary (Statement) was posted on the Internal Revenue Service (IRS) Country-by-Country (CbC) Reporting Jurisdiction Status Table.

The Statement acknowledges that the 2018 Agreement on Exchange of Country-by-Country Reports is expected to terminate on 8 January and provides that the US and Hungary are in the process of negotiating an intergovernmental agreement and competent authority arrangement to allow for the automatic exchange of CbC Reports. Prior to entry into force of these agreements, the Statement outlines agreements reached with respect to exchange of CbC Reports for fiscal years commencing 1 January 2021.

In an IRS Chief Counsel Memorandum (CCA 202302011) dated 10 January, the US concluded that cryptocurrency that has declined in value — even to less than a penny per unit — is not considered a deductible Internal IRC Section 165 worthless loss if the taxpayer took no action to abandon the property right. According to the facts, the cryptocurrency continued to be traded on at least one exchange and the IRS noted that it "had liquidating value, though it was valued at less than one cent at the end of 2022."

The Organisation for Economic Co-operation and Development announced on 13 January that former US Treasury official Manal Corwin will become director of the Centre for Tax Policy and Administration (CTPA), replacing Grace Perez-Navarro who will retire on 31 March. Perez-Navarro, who was the deputy director of the CTPA, became the director after long-time head Pascal Saint-Amans left the position in October 2022.

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Upcoming Webcasts

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.

International tax talk quarterly series: With the EY Global Tax Desk Network (January 24)
During this EY Webcast, Ernst & Young professionals will highlight developments that could affect multinational companies operating in Hong Kong and the Chinese mainland.

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Recent Tax Alerts

Africa

Asia

Canada & Latin America

Europe

Middle East

Oceana

Multinational

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Recent Newsletters

ITS/Washington Dispatch
   Highlights of this edition include:

  • Legislation
  • Tax reform guidance
  • Tax compliance
  • Foreign Tax Credit
  • Capital markets
  • Cryptocurrency
  • Tax treaties
  • Withholding
  • Transfer pricing
  • BEPS 2.0 (US)
  • Foreign Bank and Financial Accounts (FBAR)
  • IRS forms
  • Miscellaneous
  • OECD
  • BEPS 2.0

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IRS Weekly Wrap-Up

Internal Revenue Bulletin

 2023-04Internal Revenue Bulletin of January 23, 2023

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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.

Document ID: 2023-0131

 

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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