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February 2, 2023
2023-0198

U.S. Tax This Week for February 3

Ernst & Young's U.S. Tax This Week newsletter for the week ending February 3 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.

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Top of the Week

OECD releases Pillar Two guidance

The OECD released on February 2, 2023, a long-awaited package of additional administrative guidance under Pillar Two. The guidance will be incorporated into a revised version of the Commentary to be issued later this year, replacing the original Commentary released in March 2022. In releasing this guidance, the OECD noted the additional guidance, together with the December 2022 releases (i.e., safe harbors, penalty relief, information return and tax certainty), finalizes the Implementation Framework set out in October of 2021. The Executive Summary acknowledges further guidance will be needed, on an ongoing basis, as countries implement the Pillar Two rules and issues arise after the rules are legislated into their domestic laws. The release explains the items addressed are those most in need of immediate clarification and simplification. EY Tax Alert 2023-0199 has details.

Enactment of the SECURE Act 2.0 brings some important changes for certain charities and donors

The Setting Every Community Up for Retirement Enhancement (SECURE) Act 2.0, signed into law on December 29, 2022 as part of the $1.7 trillion omnibus spending deal (H.R. 2617) for fiscal year (FY) 2023, will have implications for the charitable sector and donors, tax-exempt entities with IRC Section 403(b) plans and investors in IRC Section 529 plans. EY Tax Alert 2023-0172 has details.

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Upcoming Webcasts

What India’s 2023-24 Budget could mean for its economy (February 9)
During this EY Webcast, Ernst & Young professionals will help explain the fine print of the 2023-24 India Budget, covering the macroeconomic and policy announcements, direct tax proposals and indirect tax proposals.

Tax in a time of transition: legislative, economic, regulatory and IRS developments (February 17)
During this EY Webcast, Ernst & Young professionals will provide an overview of recent tax and economic developments designed to help you stay on top of changes in today’s shifting economic, legislative and regulatory environment. In this regularly occurring webcast series, panelists will provide updates on: (i) the US economy and tax policy; (ii) what’s happening at the IRS; (iii) breaking developments.

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Recent Tax Alerts

Internal Revenue Service

— Jan 30: IRS addresses deductions involving cryptocurrency in two Chief Counsel Advice memos (Tax Alert 2023-0175)

— Jan 27: IRS examiners must consult IRS counsel before applying the economic substance doctrine in transfer pricing audits (Tax Alert 2023-0161)

International

— Feb 01: Korea's National Assembly passes significant 2022 tax reform bills (Tax Alert 2023-0189)

— Feb 01: Chile postpones increase in the amounts of mining patents (Tax Alert 2023-0188)

— Feb 01: Portugal publishes guidance regarding contribution on single-use packaging made of plastic or aluminum (or multi-material) for ready-to-eat meals (Tax Alert 2023-0187)

— Feb 01: Panama’s Ministry of Economy and Finance extends term for implementation of electronic invoicing system (Tax Alert 2023-0186)

— Feb 01: Cambodia implements new online application procedure for Type E Visa (Tax Alert 2023-0185)

— Feb 01: Costa Rican Tax Authority publishes new update to Catalogue of Goods and Services (Tax Alert 2023-0183)

— Jan 31: Peru extends tax incentives applicable for Real Estate Investment Funds (Tax Alert 2023-0181)

— Jan 31: Lithuania allows submission of Blue Card and Temporary Residence Permit applications from the applicant's home country (Tax Alert 2023-0179)

— Jan 31: Costa Rican General Directorate of Treasury establishes new procedure to request tax exemptions through Exonet system (Tax Alert 2023-0177)

— Jan 31: Dominican Republic’s Executive Branch publishes General Regulations to new Customs Law (Tax Alert 2023-0176)

— Jan 27: Updated US list of foreign currency futures contracts - starting point for IRC Section 1256 (Tax Alert 2023-0167)

— Jan 27: Updated 2022 US IRC Section 1256 qualified board or exchange list (Tax Alert 2023-0166)

— Jan 27: Uruguay’s Executive Branch increases income limit to apply for simplified regime for Personal Income Tax (Tax Alert 2023-0160)

— Jan 26: Argentina issues new regulations on normalization program of local and foreign currency for construction investments and the incentive regime for Argentine investment and production (Tax Alert 2023-0156)

Legislation

— Feb 01: CMS issues final rule updating Medicare Advantage Risk Adjustment Data Validation program (Tax Alert 2023-0191)

— Feb 01: CMS issues proposed rule on ACA's contraceptive coverage requirements (Tax Alert 2023-0190)

— Feb 01: What to expect in Washington (February 1) (Tax Alert 2023-0184)

— Jan 30: Enactment of the SECURE Act 2.0 brings some important changes for certain charities and donors (Tax Alert 2023-0172)

States

— Jan 31: Idaho State Tax Commission to update withholding formula by July 2023 to reflect new flat tax effective January 1, 2023 (Tax Alert 2023-0182)

— Jan 27: Minnesota updates IRC conformity and enacts other tax changes (Tax Alert 2023-0164)

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Recent Newsletters

State and Local Tax Weekly
   Highlights of this edition include:

— Minnesota updates IRC conformity and enacts other tax changes. On Jan. 12, 2023, Governor Tim Walz signed HF 31, which, among other changes, updates Minnesota's date of conformity to the Internal Revenue Code (IRC) as amended through Dec. 15, 2022. HF 31 is generally effective as of Jan. 1, 2023. Changes that conform to federal provisions with retroactive effective dates, however, are retroactively effective to the date of the federal provision.

— Income/Franchise, Sales & Use, Business Incentives, Property Tax, Compliance & Reporting, Controversy, Payroll & Employment Tax, Miscellaneous Tax, Value Added Tax

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IRS Weekly Wrap-Up

Proposed Regulations

 REG 124930-21Coverage of Certain Preventive Services Under the Affordable Care Act

Revenue Procedures

 2023-09Changes in accounting periods and in methods of accounting

Internal Revenue Bulletin

 2023-05Internal Revenue Bulletin of January 30, 2023

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.

 

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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