March 16, 2023
U.S. Tax This Week for March 17
Ernst & Young's U.S. Tax This Week newsletter for the week ending March 17 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.
Top of the Week
International policy changes represent nearly 30% of total tax increases in President Biden's FY2024 budget
On March 9, 2023, the Biden Administration released its FY2024 budget, which includes over $4 trillion in net tax increases over the next 10 years. Over $1.1 trillion, or 29% of the increases in total net tax, comes from reforms to international tax rules. These changes could significantly increase the tax liabilities faced by US multinational companies and could make the US compliant with minimum taxation rules under Pillar Two of the Base Erosion and Profit Shifting (BEPS) initiative of the Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework. EY Tax Alert 2023-0501 has details.
President Biden releases FY24 Budget, increasing health spending by $14.8 billion
On March 9, President Biden released his $6.8 trillion fiscal year (FY) 2024 budget proposal, requesting $1.7 billion in mandatory funding and $144 billion in discretionary funding for the Department of Health and Human Services (HHS), an 11.5% increase from the 2023 enacted level. Like most presidential budgets, the documents are largely aspirational, and unlikely to supported by Congress, which ultimately is tasked with drafting and passing a budget for FY 2024 by the September 30th deadline. EY Tax Alert 2023-0456 has details.
EY Guides, Surveys, and Reports
Tax transformation | Plan and invest in the tax department of the future
Faced with increasing tax complexity, new data and technology requirements, and challenges finding and retaining talent, companies now more than ever need to be thinking about updating their corporate tax compliance functions. In this three-part series, we examine an evolving tax compliance environment that rewards agility, new skill sets and the ability to do more with less. In the first article, we focused on regulatory, legislative and market complexities affecting tax compliance. This second article in the EY series focuses on hiring and retention challenges affecting tax compliance.
Transform for now or for what’s next? Improving tax compliance readiness
Faced with increasing tax complexity, new data and technology requirements, and challenges finding and retaining talent, companies now more than ever need to be thinking about updating their corporate tax compliance functions. In this three-part series, we examine an evolving tax compliance environment that rewards agility, new skill sets and the ability to do more with less. In each article, we examine different factors affecting today’s tax departments and provide insights on how they can transform and thrive in the tax compliance landscape of today and tomorrow. This first article in an EY series focuses on regulatory, legislative and market complexities affecting tax compliance.
Accounting for income taxes: A quarterly perspective (March 21)
During this EY Webcast, Ernst & Young professionals moderated by Angela Evans, Partner, Tax Accounting and Risk Advisory Services (TARAS), will discuss ongoing issues and regulatory trends in the tax accounting arena. Topics will include recent tax legislation with tax accounting implications and a review of current income tax accounting concepts.
EY Webcast addresses new developments about the CHIPS and Science Act of 2022 (March 21)
During this EY Webcast, Ernst & Young professionals from across the EY organization will share their insights on the CHIPS and Science Act of 2022 and the application process.
How recent developments potentially impact cross-border tax controversy procedures and processes (March 30)
During this EY Webcast, Ernst & Young professionals will share emerging trends in cross-border controversy. They will also discuss the OECD’s recently published Bilateral APA Manual (BAPAM), Manual on the Handling of Multinational MAPs and APAs (MoMA), and the revised BEPS Action 14 review process.
What to know about the 2023 EY Tax risk and controversy survey results — Americas and Europe (April 5)
During this EY Webcast, Ernst & Young professionals will explore how taxpayers perceive and manage tax risk and controversy in 2023.
US corporate income tax compliance: Tax year 2022 readiness and planning for what’s next and beyond (April 26)
During this EY Webcast, Ernst & Young professionals will discuss how companies can continue to navigate the complexity and challenges of the ever-changing tax compliance landscape, while preparing for tax year 2022 and beyond.
Recent Tax Alerts
— Mar 16: Costa Rican Customs Authorities communicate end of temporary relief for maritime freight costs (Tax Alert 2023-0500)
— Mar 16: Sweden exempts certain residence and work permit applicants from passport verification process (Tax Alert 2023-0496)
— Mar 16: Sweden postpones deadline for report on enhancements to immigration regulations until January 2024 (Tax Alert 2023-0495)
— Mar 16: UK announces launch of Electronic Travel Authorisation scheme in phases starting in November 2023 (Tax Alert 2023-0494)
— Mar 16: Mexico deposits instrument for ratification of the MLI (Tax Alert 2023-0493)
— Mar 16: UK Chancellor delivers Spring Budget 2023 (Tax Alert 2023-0492)
— Mar 16: Japan's Tax Authority confirms that a representative and registration in Japan as required under Companies Act does not create a PE (Tax Alert 2023-0491)
— Mar 15: Uruguayan Government proposes exemptions to aid the agricultural sector given its state of emergency (Tax Alert 2023-0487)
— Mar 15: Dubai reinstates former import value threshold of consignments (Tax Alert 2023-0485)
— Mar 15: Pakistan increases Sales Tax and Federal Excise tax rates (Tax Alert 2023-0484)
— Mar 14: Global Tax Policy and Controversy Watch | March 2023 edition (Tax Alert 2023-0481)
— Mar 14: Chilean Chamber of Deputies rejects tax reform bill (Tax Alert 2023-0480)
— Mar 14: Malaysia allows Singapore applicants to apply for Entry Visas online (Tax Alert 2023-0477)
— Mar 14: Malaysia expedites pass endorsement for eligible Employment Pass and Professional Visit Pass applicants (Tax Alert 2023-0476)
— Mar 14: Kosovo passport holders to soon be able to travel to the EU without a visa (Tax Alert 2023-0475)
— Mar 14: UK updates right to work guidance for employers (Tax Alert 2023-0474)
— Mar 14: UK publishes Statement of Changes to Immigration Rules (Tax Alert 2023-0472)
— Mar 14: Estonian tax measures triggered after new countries including Russia are added to EU list of non-cooperative jurisdictions (Tax Alert 2023-0468)
— Mar 10: Argentine Tax Authority launches website service to ensure compliance with mandatory disclosure regime (Tax Alert 2023-0458)
— Mar 10: Ontario implements new transparency register (Tax Alert 2023-0457)
— Mar 10: Thailand plans to implement global minimum tax rules under OECD BEPS 2.0 Pillar Two (Tax Alert 2023-0452)
— Mar 10: Spain opens public consultation on implementation of the EU Minimum Tax Directive (Tax Alert 2023-0451)
— Mar 16: New developments about the CHIPS and Science Act of 2022 (Tax Alert 2023-0489)
— Mar 15: What to expect in Washington (March 15) (Tax Alert 2023-0483)
— Mar 10: Ways and Means holds hearing with Secretary Yellen (Tax Alert 2023-0463)
— Mar 10: President Biden releases FY24 Budget, increasing health spending by $14.8 billion (Tax Alert 2023-0456)
— Mar 10: House Energy and Commerce Subcommittee on Health advances five bills addressing health care, controlled substances, and suicide prevention (Tax Alert 2023-0455)
— Mar 10: Biden Administration’s budget proposes significant tax increases on businesses and high-net-worth individuals (Tax Alert 2023-0449)
— Mar 15: Kentucky law lowers personal income tax rates for 2023 and 2024 and removes triggers for future rate cuts (Tax Alert 2023-0486)
— Mar 14: Philadelphia requires employers provide transportation benefits starting in 2023 (Tax Alert 2023-0471)
— Mar 10: Wisconsin Tax Appeals Commission disallows deductions for intercompany royalty and interest expenses (Tax Alert 2023-0462)
State and Local Tax Weekly
Highlights of this edition include:
— Montana water's-edge election due March 31, 2023, for calendar-year taxpayers. Calendar-year taxpayers that want to make a new Montana water's-edge election, or renew an existing one that expired at the end of 2022, must file Form WE-ELECT by March 31, 2023.
— Wisconsin Tax Appeals Commission disallows deductions for intercompany royalty and interest expenses. On Feb. 24, 2023, the Wisconsin Tax Appeals Commission (WTAC) issued a ruling1 disallowing a taxpayer's deduction for certain intercompany royalty and interest expenses the taxpayer paid to an affiliate.
— Income/Franchise, Sales & Use, Property Tax, Compliance & Reporting, Miscellaneous Tax
IRS Weekly Wrap-Up
| ||2023-18||Applying for and maintaining certification as a certified professional employer organization|
| ||2023-19||Qualified Individuals|
| ||2023-06||Section 1274 — Determination of Issue Price in the Case of Certain Debt Instruments Issued for Property|
| ||2023-25||Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates|
| ||2023-26||Determination of Housing Cost Amounts Eligible for Exclusion or Deduction for 2023|
Internal Revenue Bulletin
| ||2023-11||Internal Revenue Bulletin of March 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.