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February 19, 2023
2023-0310

U.S. International Tax This Week for February 17

Ernst & Young's U.S. International Tax This Week newsletter for the week ending February 17 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

The Internal Revenue Service (IRS) will not release proposed regulations on previously taxed earnings and profits (PTEP) until the latter half of 2023, according to an IRS official this week. The IRS has announced delays in the release of the eagerly anticipated regulatory package on several occasions, most recently last fall. The official was quoted as saying the complex guidance will be released over a period of years in multiple packages and warned taxpayers that while this year's regulations would address pressing concerns, taxpayers would not see all their questions answered in the first tranche.

Senate Finance Committee member Sherrod Brown and Chairman Ron Wyden introduced the Stock Buyback Accountability Act of 2023, which would increase the recently enacted one percent stock buyback excise tax to four percent. In the 7 February State of the Union Address, President Biden called for quadrupling the buyback excise tax that was included in the Inflation Reduction Act. The proposal is unlikely to be enacted in a divided Congress.

The press is reporting that the proposed US-Chile tax treaty is stalled due to disagreement among Senate Finance Committee Republicans and Treasury on the issue of foreign tax credits. Committee Republicans reportedly want clarification in treaty language that US companies will not face double taxation in certain situations. The Senate Foreign Relations Committee cleared the proposed US-Chile tax treaty in the last Congress, although it was not brought to the floor of the Senate for a vote. The treaty therefore must again go through committee approval in the new 118th Congress.

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EY Guides, Surveys, and Reports

What multinationals need to do to prepare for the OECD's BEPS 2.0 Pillar 2 project
In an article first published in Tax Notes Today International, Jason Yen, a Principal in the International Tax and Transaction services practice of Ernst & Young LLP's National Tax Department in Washington, outlines key steps multinational companies can take to prepare for the OECD's BEPS Pillar 2 project.

Asean Mobility Spotlight (January 2023)
In this edition of the Asean Mobility Spotlight, we address the key considerations in tax, immigration and social security compliance for business travelers (BTs), who are assigned to ASEAN jurisdictions for short-term business meetings, etc., and not on formal assignment.

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Upcoming Webcasts

BEPS 2.0: New Administrative Guidance and implementation activity on Pillar Two (February 28)
During this EY Webcast, Ernst & Young professionals will focus on the dynamics of the BEPS 2.0 project.

Are you Pillar Two-ready? | Banking and Capital Markets: Current industry insights (March 8)
During this EY Webcast, Ernst & Young professionals will examine the latest guidance from the Organisation for Economic Co-operation and Development (OECD) on the BEPS 2.0 project as it relates to the banking and capital markets industry.

Pillar Two administrative guidance and safe harbors: implications for US multinationals (March 9)
Recent administrative guidance from the Organisation for Economic Co-operation and Development (OECD) on the Global Anti-Base Erosion (GloBE) rules under Pillar Two addresses many critical issues for US multinationals but also raises many (unanswered) technical questions. The OECD’s transitional safe harbor rules, released at the end of 2022, could help relieve compliance burdens for US companies. During this EY Webcast, Ernst & Young professionals will provide a detailed discussion of these developments and practical approaches to help manage the reporting and tax-rate implications.

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Recent Tax Alerts

United States

— Feb 16: US Department of State to launch pilot program for domestic visa renewal (Tax Alert 2023-0297)

Africa

— Feb 16: South Africa's President announces significant immigration changes expected in the future (Tax Alert 2023-0295)

— Feb 16: Kenya gazettes Income Tax (Financial Derivatives) Regulations, 2023 (Tax Alert 2023-0288)

— Feb 14: Botswana's Government presents 2023 Budget to Parliament (Tax Alert 2023-0277)

— Feb 13: Kenya High Court dismisses petitions challenging imposition of VAT on exported services (Tax Alert 2023-0271)

— Feb 13: Uganda mandates all companies to file beneficial owner's information (Tax Alert 2023-0269)

— Feb 10: Kenya proposes amendments to Excise Duty Regulations (Tax Alert 2023-0253)

Asia

— Feb 16: Chinese authorities resume visa issuance and 72/144-hour visa-free transit policy for South Korean nationals (Tax Alert 2023-0296)

— Feb 16: Malaysia introduces new Multiple Entry Visa for business visitors and other travelers (Tax Alert 2023-0294)

— Feb 10: Japan submits draft legislation to implement IIR to align with OECD BEPS 2.0 Pillar Two (Tax Alert 2023-0263)

Canada & Latin America

— Feb 16: Northwest Territories budget 2023-24 discussed (Tax Alert 2023-0305)

— Feb 16: US stock buyback excise tax has potential implications for Canadian public companies (Tax Alert 2023-0304)

— Feb 16: Canada releases semi-annual list of trade compliance verification priorities (Tax Alert 2023-0303)

— Feb 16: Brazilian Supreme Court overrules use of res judicata in cases where such use is against the Supreme Court's holding (Tax Alert 2023-0302)

— Feb 15: Costa Rica is added to EU list of non-cooperative jurisdictions (Annex I) for the first time (Tax Alert 2023-0283)

— Feb 14: Uruguayan Tax Authority publishes adjustments in interest taxation under Double Tax Treaty between Chile and Uruguay (Tax Alert 2023-0280)

Europe

— Feb 16: Switzerland significantly increases safe harbor interest rates for 2023 (Tax Alert 2023-0309)

— Feb 16: Bulgaria introduces major changes relating to EU Blue cards (Tax Alert 2023-0292)

— Feb 16: Germany's updated EU list of non-cooperative jurisdictions may trigger significant German tax consequences for business relationships with Russia (Tax Alert 2023-0291)

— Feb 16: Spain releases final List of Non-Cooperative Jurisdictions for Tax Purposes (Tax Alert 2023-0290)

— Feb 15: ECOFIN adopts revised list of non-cooperative jurisdictions for tax purposes (Tax Alert 2023-0281)

— Feb 13: Germany implements new UBO reporting obligations for foreign entities with direct or indirect ownership in German real estate (Tax Alert 2023-0270)

Middle East

— Feb 16: UAE announces launch of new re-entry permit service for residence visa holders who stay outside the UAE for six months or more (Tax Alert 2023-0293)

— Feb 15: Turkey reduces withholding tax to 0% on share-buy-back transactions (Tax Alert 2023-0286)

— Feb 14: Qatar enacts amendments to Income Tax Law (Tax Alert 2023-0278)

Multinational

— Feb 15: Global Tax Policy and Controversy Watch | February 2023 edition (Tax Alert 2023-0284)

— Feb 10: OECD/G20 Inclusive Framework releases Administrative Guidance under Pillar Two GloBE Rules: Detailed Review (Tax Alert 2023-0256)

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IRS Weekly Wrap-Up

Internal Revenue Bulletin

 2023-08Internal Revenue Bulletin of February 21, 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.

 

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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