April 2, 2023
U.S. International Tax This Week for March 31
Ernst & Young's U.S. International Tax This Week newsletter for the week ending March 31 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.
An Organisation for Economic Co-operation and Development (OECD) official this week said the organization is confident there will be an agreement on Amount B of Base Erosion and Profit Shifting (BEPS) Pillar One by the middle of this year. The official was quoted as saying that while there is overwhelming support among businesses to broaden the scope of Amount B, there are "natural limits to how broad the scope can be as well" and delegates are working on the right balance.
In December 2022, the OECD Secretariat released a consultation document on Amount B of Pillar One of the BEPS 2.0 project. Amount B is aimed at simplifying and streamlining the transfer pricing of in-country baseline marketing and distribution activities, while ensuring outputs are consistent with the arm's-length principle. There is no threshold proposed for multinational enterprises (MNEs) to be within scope of Amount B; this is in contrast to both Amount A of Pillar One and the global minimum tax rules under Pillar Two, where specified thresholds would apply for determining whether an MNE is within scope.
The Internal Revenue Service (IRS) Advance Pricing and Mutual Agreement (APMA) Program this week issued its 24th annual Advance Pricing Agreement (APA) report in Announcement 2023-10. The report discusses APMA, including its activities and structure for calendar year 2022 and provides useful insights into the operation of the APA Program. Although the number of APA filings increased significantly in 2022, the total number of APAs concluded decreased significantly; the median amount of time to finalize an APA increased from 35.1 months in 2021 to 43.4 months in 2022. See EY Tax Alert 2023-0620 for details.
House Republican tax writers sent a 24 March letter to the House Appropriations State, Foreign Operations and Related Programs Subcommittee requesting that funding to the OECD by the United States Government be eliminated. The 10 Ways and Means Committee members wrote that the organization has "evolved into a venue that advocates against the economic interests of United States' workers and business … ." Senate Finance Committee Chairman Ron Wyden was quoted as saying he opposed the action.
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.
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
Recent Tax Alerts
— Mar 29: USCIS Announces Completion of H-1B Initial Electronic Registration Selection Process (Tax Alert 2023-0596)
— Mar 27: USCIS announces COVID-related updates (Tax Alert 2023-0581)
— Mar 28: Kenya Tax Appeals Tribunal reiterates that private ruling is binding on Tax Authority (Tax Alert 2023-0590)
— Mar 23: South Africa announces upcoming changes to address visa application backlogs and processing times (Tax Alert 2023-0552)
— 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)
Canada & Latin America
— Mar 30: Brazil reinstates visa requirements for Australia, Canada, Japan and US nationals (Tax Alert 2023-0615)
— 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: 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 28: Panama announces major changes in work permit regulations effective April 1 (Tax Alert 2023-0591)
— Mar 24: Nova Scotia budget 2023–24 discussed (Tax Alert 2023-0570)
— 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: Canadian Post-Graduation Work Permit holder extensions announced (Tax Alert 2023-0553)
— Mar 30: Portugal begins accepting online Residence Permit applications from nationals of Portuguese-Speaking Countries (Tax Alert 2023-0616)
— Mar 30: Poland defers deadline for Corporate Income Tax and Shifted Profits Tax (Tax Alert 2023-0614)
— Mar 29: UK ends concession for offshore wind workers on April 30 (Tax Alert 2023-0604)
— Mar 29: OECD holds public consultation meeting on compliance and tax certainty aspects of Pillar Two global minimum tax (Tax Alert 2023-0602)
— 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: UK publishes legislation for multinational top-up tax and domestic top-up tax (Tax Alert 2023-0589)
— Mar 24: Denmark passes bill simplifying hiring of third-country nationals (Tax Alert 2023-0567)
— Mar 27: Saudi Arabia announces third wave of Phase 2 e-invoicing integration (Tax Alert 2023-0574)
— Mar 23: Turkey introduces additional tax for 2022 (Tax Alert 2023-0557)
— Mar 23: Turkey introduces tax amnesty (Tax Alert 2023-0556)
IRS Weekly Wrap-Up
Internal Revenue Bulletin
| ||2023-14||Internal Revenue Bulletin of April 3, 2023|
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.