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March 30, 2023

U.S. Tax This Week for March 31

Ernst & Young's U.S. Tax This Week newsletter for the week ending March 31 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

Proposed Superfund Tax regulations address many issues, but leave others open

On Monday March 27, 2023, the IRS published an advanced copy of proposed regulations (REG-105954-22) on the Superfund Chemical Tax and Superfund Imported Substance Tax (hereafter, Superfund Tax), which are excise taxes that apply to certain chemicals and certain imported substances effective July 1, 2022 (see Tax Alert 2021-2059). The proposed regulations are expected to be published in the Federal Register and open for public comment on March 29, 2023. These are the first proposed regulations on the Superfund Tax in over 40 years. While the regulations are detailed and informative, the IRS requested comments in seven specific areas to help address uncertain issues and to assist in the administration of the tax. EY Tax Alert 2023-9002 has details.

OECD holds public consultation meeting on compliance and tax certainty aspects of Pillar Two global minimum tax

On 16 March 2023, the OECD held a virtual consultation meeting on the public consultation documents that had been released by the OECD Secretariat on 20 December 2022 on the Pillar Two GloBE information return and on tax certainty for the Pillar Two GloBE rules in connection with the ongoing OECD/G20 project on Addressing the Tax Challenges Arising from the Digitalisation of the Economy (the so-called BEPS 2.0 project). EY Tax Alert 2023-0602 has details.

EY Guides and Publications

The Latest on BEPS and Beyond | 2022 and beyond in review
This special edition of EY's monthly Latest on BEPS and Beyond report provides an overview of the most important international tax developments through 2022 and the beginning of 2023. It also highlights global and regional policy trends. This edition also covers the progress of the G20/OECD Inclusive Framework on BEPS (Inclusive Framework) in its negotiations on Pillar One and Two of BEPS 2.0

EY's 2023 Global Tax Policy and Controversy outlook is now available
The narrative piece in our 2023 Global Tax Policy and Controversy Outlook, "Why now is the time to prepare for the global tax transformation," focuses on the intensifying global activity around BEPS 2.0 Pillar Two, new transparency requirements and a plethora of sustainability and other tax measures. The article draws from the observations of EY Tax professionals in 70 jurisdictions gathered in the annual EY Tax Policy and Controversy Outlook survey conducted at the end of 2022 and beginning of 2023.

EY 2023 Tax Policy and Controversy Outlook
How jurisdictions will implement Pillar Two, new transparency requirements and a plethora of sustainability and other tax measures will all unfold in concert, creating far-reaching effects. These and other challenges are addressed in this article, reflecting observations by EY Tax professionals in 70 jurisdictions gathered in the annual EY Tax Policy and Controversy Outlook survey at the end of 2022 and beginning of 2023. This article examines the trends and areas of divergence found in the contributors' projections for 2023 at the global, regional and national levels. Detailed reports for all 70 jurisdictions are available for those interested in more information.

Five steps tax accounting teams can take to prepare for BEPS 2.0
Pillar Two is both vast in its reach and complexity, with rules that define a new tax base and a nuanced formula to calculate minimum “top-up” tax on a jurisdictional basis. Tax department budgets and capacity are already under significant pressure, and companies subject to Pillar Two will see a significant increase in their reporting and compliance liabilities. These businesses will need to evolve data sourcing, systems, processes and controls to manage and account for the new minimum tax. This article discusses five steps that tax accounting teams need to consider while preparing for BEPS 2.0

Upcoming Webcasts

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.

Tax in a time of transition: Legislative, economic, regulatory and IRS developments (April 21)
During this EY Webcast, Ernst & Young professionals will provide updates on: (i) the US economy and tax policy; (ii) what’s happening at the IRS; and (iii) breaking developments.

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

Internal Revenue Service

— Mar 29: IRS requests feedback for forthcoming guidance on NFTs (Tax Alert 2023-0606)

— Mar 27: IRS concludes sell-side financial advisory fees are properly taken into account by seller in denial of target's request to make late success-based fee election (Tax Alert 2023-0572)

— Mar 23: IRS official says enhanced IRS pre-filing process will provide taxpayers with a more robust view of APA suitability (Tax Alert 2023-0550)


— Mar 30: Portugal begins accepting online Residence Permit applications from nationals of Portuguese-Speaking Countries (Tax Alert 2023-0616)

— Mar 30: Brazil reinstates visa requirements for Australia, Canada, Japan and US nationals (Tax Alert 2023-0615)

— Mar 30: Poland defers deadline for Corporate Income Tax and Shifted Profits Tax (Tax Alert 2023-0614)

— Mar 30: Japan enacts 2023 tax reform bill including legislation to implement IIR to align with OECD BEPS 2.0 Pillar Two (Tax Alert 2023-0613)

— Mar 30: Costa Rican Executive Branch publishes regulations on law to promote investment competitiveness outside the Greater Metropolitan Area (Tax Alert 2023-0612)

— Mar 29: UK ends concession for offshore wind workers on April 30 (Tax Alert 2023-0604)

— Mar 29: Peruvian Government modifies minimum interest rate allowed for national and foreign currency loans (Tax Alert 2023-0601)

— Mar 29: Canada extends Canada-Ukraine Authorization for Emergency Travel program (Tax Alert 2023-0598)

— Mar 29: Canada announces new federal permanent residence program (Tax Alert 2023-0597)

— Mar 29: USCIS Announces Completion of H-1B Initial Electronic Registration Selection Process (Tax Alert 2023-0596)

— Mar 28: Czech Republic extends visa ban for Russian and Belarusian nationals until March 31, 2024 (Tax Alert 2023-0594)

— Mar 28: Bulgaria introduces measures for addressing high energy prices (Tax Alert 2023-0593)

— Mar 28: Panama announces major changes in work permit regulations effective April 1 (Tax Alert 2023-0591)

— Mar 28: Kenya Tax Appeals Tribunal reiterates that private ruling is binding on Tax Authority (Tax Alert 2023-0590)

— Mar 28: UK publishes legislation for multinational top-up tax and domestic top-up tax (Tax Alert 2023-0589)

— Mar 27: USCIS announces COVID-related updates (Tax Alert 2023-0581)

— Mar 27: Saudi Arabia announces third wave of Phase 2 e-invoicing integration (Tax Alert 2023-0574)

— Mar 24: Nova Scotia budget 2023–24 discussed (Tax Alert 2023-0570)

— Mar 24: Denmark passes bill simplifying hiring of third-country nationals (Tax Alert 2023-0567)

— Mar 24: Ontario budget 2023–24 discussed (Tax Alert 2023-0566)

— Mar 24: Saskatchewan budget 2023–24 discussed (Tax Alert 2023-0565)

— Mar 24: New Brunswick budget 2023–24 discussed (Tax Alert 2023-0564)

— Mar 24: Newfoundland and Labrador budget 2023–24 discussed (Tax Alert 2023-0563)

— Mar 24: Québec budget 2023–24 discussed (Tax Alert 2023-0561)

— Mar 23: Turkey introduces additional tax for 2022 (Tax Alert 2023-0557)

— Mar 23: Turkey introduces tax amnesty (Tax Alert 2023-0556)

— Mar 23: Canadian Post-Graduation Work Permit holder extensions announced (Tax Alert 2023-0553)

— Mar 23: South Africa announces upcoming changes to address visa application backlogs and processing times (Tax Alert 2023-0552)


— Mar 29: Senate Banking Committee questions regulators on recent bank failures and federal rescue efforts (Tax Alert 2023-0610)

— Mar 29: What to expect in Washington (March 29) (Tax Alert 2023-0599)

— Mar 27: FY2024 Budget proposals could have state income tax implications (Tax Alert 2023-0587)

— Mar 24: Senate Finance Committee and Senate Appropriations Subcommittee hold hearings on HHS FY 2024 budget request (Tax Alert 2023-0569)

— Mar 24: House Ways & Means Health Subcommittee holds hearing on factors driving unaffordable health care (Tax Alert 2023-0568)

— Mar 23: Senate Health, Education, Labor and Pensions Committee hearing on Moderna's proposed COVID-19 vaccine price increase (Tax Alert 2023-0551)


— Mar 30: Alabama tax court upholds assessment of income tax on remote worker providing services from home office in Idaho (Tax Alert 2023-0609)

— Mar 29: Washington Supreme Court holds capital gains tax is a valid excise tax, not an unconstitutional income tax — affected taxpayers may need to take immediate action (Tax Alert 2023-0608)

— Mar 29: Unclaimed property holders that want to participate in California's Voluntary Compliance Program can now submit an interest form to receive an application (Tax Alert 2023-0607)

— Mar 29: Illinois adopts amended Retailers' Occupation Tax sourcing and marketplace regulations (Tax Alert 2023-0605)

— Mar 24: Kentucky law updates IRC conformity, adopts an elective passthrough entity tax, and makes sales/use tax changes (Tax Alert 2023-0571)

IRS Weekly Wrap-Up

Proposed Regulations

 REG-105954-22Superfund Chemical Taxes

Revenue Procedures

 2023-2026 CFR 601.601: Rules and Regulations.
 2022-3826 CFR 601.602: Tax forms and instructions.

Revenue Rulings

 2023-2Section 671.—Trust Income, Deductions, and Credits Attributable to Grantors and Others as Substantial Owners; § 1014.—Basis of Property Acquired from a Decedent




 2023-28Extension of Temporary Relief Related to the Penalty for Failure to Deposit Superfund Chemical Taxes

Internal Revenue Bulletin

 2023-13Internal Revenue Bulletin of March 27, 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.