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February 12, 2023
2023-0258

U.S. Tax This Week for February 10

Ernst & Young's U.S. Tax This Week newsletter for the week ending February 10 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's Pillar Two Administrative Guidance raises implications for US multinationals

On February 2, 2023, the Organisation for Economic Co-operation and Development (OECD) / G20 Inclusive Framework on Base Erosion and Profit Shifting released Administrative Guidance on the Pillar Two GloBE Rules (the Administrative Guidance or AG). The AG supplements the previously issued GloBE Model Rules (Model Rules or MR) and Commentary. EY Tax Alert 2023-0254 has details.

OECD/G20 Inclusive Framework releases Administrative Guidance under Pillar Two GloBE Rules: Detailed Review

On 2 February 2023, the OECD released Administrative Guidance on the Pillar Two GloBE Rules, as approved by the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS). This document provides additional guidance on a series of issues arising under the GloBE Model Rules and related Commentary. The guidance is in the form of additions and other modifications to the Commentary, which will be incorporated in a revised version of the Commentary to be released later this year. EY Tax Alert 2023-0256 has details.

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Upcoming Webcasts

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.

Corporate alternative minimum tax: what the latest interim guidance could mean for companies (February 28)
During this EY Webcast, Ernst & Young professionals will discuss the technical aspects, implications and uncertainties of Notice 2023-7.

Domestic tax quarterly webcast series: A focus on state tax matters (March 1)
During this EY Webcast, Ernst & Young professionals will provide information on major tax law changes in the 50 states and District of Columbia, as well as current state and local tax topics of interest.

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Recent Tax Alerts

Internal Revenue Service

— Feb 09: IRS plans to update guidance on Advance Pricing Agreements and competent authority assistance (Tax Alert 2023-0252)

— Feb 09: IRS modifies definitions to include more vehicles eligible for clean vehicles credit (Tax Alert 2023-0251)

— Feb 07: IRS issues guidance on the optional safe harbor accounting method for real estate developers (Tax Alert 2023-0227)

— Feb 03: IRS rules that certain office property services and amenities will not result in impermissible tenant service income (Tax Alert 2023-0214)

International

— Feb 09: OECD's Pillar Two Administrative Guidance raises implications for US multinationals (Tax Alert 2023-0254)

— Feb 09: Italy approves Budget Law for 2023 (Tax Alert 2023-0248)

— Feb 09: PE Watch | Latest developments and trends, February 2023 (Tax Alert 2023-0247)

— Feb 09: Qatar announces new insurance requirement for visitors and extension of Hayya Cards (Tax Alert 2023-0246)

— Feb 09: Sweden allows applications from eligible Ukrainian citizens to extend their status under the Temporary Protection Directive (Tax Alert 2023-0245)

— Feb 08: Denmark mandates DISCO codes for all residence and work permit applications (Tax Alert 2023-0244)

— Feb 08: Poland implements changes to immigration policies impacting citizens of Ukraine and other countries (Tax Alert 2023-0241)

— Feb 07: Luxembourg revises salary requirements for certain third-country nationals (Tax Alert 2023-0235)

— Feb 08: PE Watch | 2022 in review (Tax Alert 2023-0234)

— Feb 07: Malaysia to imposes sales tax on imports of low value goods from 1 April 2023 (Tax Alert 2023-0232)

— Feb 07: Turkey announces customs exemption regarding aid materials sent from abroad in response to recent earthquakes (Tax Alert 2023-0230)

— Feb 07: European Commission publishes proposal for a "Green Deal Industrial Plan for the Net-Zero Age" (Tax Alert 2023-0229)

— Feb 07: Israel's Tax Authority releases new Form 1585 and updates Form 1385 following adoption of BEPS Action 13 principles (Tax Alert 2023-0228)

— Feb 07: European Union delays the launch of Entry and Exit System (EES) until late 2023 (Tax Alert 2023-0226)

— Feb 07: Panama’s Tax Authority issues a calendar with implementation phases of the electronic invoicing system for operations and services carried out by banks and financial institutions (Tax Alert 2023-0223)

— Feb 07: Israeli Supreme Court rules in favor of taxpayer for recovering input VAT on certain meal-related expenses (Tax Alert 2023-0222)

— Feb 07: Japan and Switzerland’s updated Double Taxation Agreement has entered into force (Tax Alert 2023-0221)

— Feb 06: Mainland China resumes visa issuance and 72/144-hour visa-free transit policy for Japanese nationals (Tax Alert 2023-0219)

— Feb 03: India releases Union Budget 2023 (Tax Alert 2023-0211)

— Feb 06: Italy releases work quotas and now requires labor office confirmation to hire foreign employees (Tax Alert 2023-0210)

— Feb 06: Indonesia mandates local counterpart training certificates for work permit renewal (Tax Alert 2023-0209)

— Feb 06: Switzerland relaxes rules for hiring highly skilled non-EEA nationals (Tax Alert 2023-0208)

— Feb 03: OECD/G20 Inclusive Framework releases Administrative Guidance under Pillar Two GloBE rules (Tax Alert 2023-0206)

— Feb 02: Accounting for the global minimum tax under the OECD's Pillar Two Global Anti-Base Erosion model rules (Tax Alert 2023-0201)

— Feb 02: Costa Rican Tax Authority publishes Institutional Criterion regarding tax treatment of foreign exchange in financial investment instruments (Tax Alert 2023-0200)

— Feb 02: OECD releases Pillar Two guidance (Tax Alert 2023-0199)

— Feb 02: EY Canada's Tax Matters @ EY for February 2023 (Tax Alert 2023-0197)

— Feb 02: USCIS to resume bundling adjudication of I-539 and I-765 applications filed by H-4 and L-2 spouses (Tax Alert 2023-0196)

— Feb 02: USCIS announces FY 2024 H-1B Cap Registration Period (Tax Alert 2023-0195)

Legislation

— Feb 08: What to expect in Washington (February 8) (Tax Alert 2023-0239)

— Feb 08: In State of the Union speech, Biden proposes reducing deficit By $2 trillion by closing tax 'loopholes,' other measures (Tax Alert 2023-0238)

States

— Feb 09: Our US employment tax rates and limits publication for 2023 is now available (Tax Alert 2023-0249)

— Feb 07: Massachusetts issues draft technical information release on regulations conforming the tax treatment of certain fringe benefits to the federal Internal Revenue Code (Tax Alert 2023-0236)

— Feb 02: Essential guide for correcting 2022 Form W-2 errors is now available (Tax Alert 2023-0194)

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Recent Newsletters

State and Local Tax Weekly
   Highlights of this edition include:

— Texas Comptroller adopts amendments to local sales and use tax sourcing rules. The Texas Comptroller of Public Accounts (Comptroller) has adopted amendments to rule 34 TAC Section 3.334 (Section 3.334) regarding local sales and use tax.

— Income/Franchise, Sales & Use, Business Incentives, Controversy, Payroll & Employment Tax, Miscellaneous Tax

ITS/Washington Dispatch
   Highlights of this edition include:

US Congress

  • Kevin McCarthy new House Speaker, Rep. Smith chairs Ways and Means Committee
  • JCT will release 'Blue Book' by end of June

Treasury and IRS news

  • Final regulations issued for qualified foreign pension funds contain some favorable clarifications
  • IRS proposed regulations would make major changes to domestically controlled QIE rules under Section 897, and certain controlled commercial entity rules under Section 892
  • IRS addresses deductions involving cryptocurrency in two CCA memos
  • Acting IRS Commissioner affirms continued participation in ICAP

Transfer pricing

  • IRS examiners must consult IRS Counsel before applying economic substance doctrine in transfer pricing audits

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IRS Weekly Wrap-Up

Proposed Regulations

 REG-112096-22Guidance Related to the Foreign Tax Credit; Hearing

Announcements

 2023-06Third six-year remedial amendment cycle for pre-approved defined benefit plans: issuance of opinion letters, plan adoption deadline, and opening of determination letter program

Notices

 2023-16Certain Definitions of Terms in Section 30D Clean Vehicle Credit

Internal Revenue Bulletin

 2023-06Internal Revenue Bulletin of February 6, 2023
 2023-07Internal Revenue Bulletin of February 13, 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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