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April 6, 2023
2023-0673

U.S. Tax This Week for April 7

Ernst & Young's U.S. Tax This Week newsletter for the week ending April 7 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 releases fifth annual peer review report on BEPS Action 6 relating to the prevention of treaty abuse

On 21 March 2023, the Organisation for Economic Co-operation and Development (OECD) released the fifth annual peer review report (the Report) on the implementation of the Action 6 minimum standard relating to the prevention of treaty abuse under the Base Erosion and Profit Shifting (BEPS) project. EY Tax Alert 2023-0671 has details.

IRS gives manufacturers tight deadline for complying with critical mineral and battery component requirements for the IRC Section 30D credit

In proposed rules (REG-120080-22), the IRS offers much-anticipated guidance on critical minerals, battery components and other requirements for clean vehicles to qualify for the federal income tax credit under IRC Section 30D. The new requirements apply to vehicles placed in service (defined as the day the taxpayer takes delivery of the vehicle) on or after April 18, 2023, even if the vehicle was ordered or purchased before that date. EY Tax Alert 2023-0660 has details.

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EY Guides, Surveys, and Reports

Worldwide VAT, GST and Sales Tax Guide 2023
Outlining value-added tax (VAT) systems in 149 jurisdictions, the 2023 edition of our annual reference book, Worldwide VAT, GST and Sales Tax Guide, is now available in an interactive map format (as well as to download as a pdf) on ey.com. New chapters for 2023 include: Antigua and Barbuda, Bosnia and Herzegovina, Fiji, Guyana, Republic of Montenegro, Mozambique, Nepal and Senegal. The São Tomé and Príncipe and Suriname chapters have also been updated to reflect the new VAT law.

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Upcoming Webcasts

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.

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Recent Tax Alerts

Internal Revenue Service

— Apr 04: IRS gives manufacturers tight deadline for complying with critical mineral and battery component requirements for the IRC Section 30D credit (Tax Alert 2023-0660)

— Apr 04: IRS rules on basis adjustment for assets in grantor trust that were not in decedent's gross estate (Tax Alert 2023-0654)

— Apr 03: Sales and Use Tax Quarterly Update for Second Quarter of 2023 (Tax Alert 2023-0647)

— Mar 31: EY-annotated Form 990-T highlights changes to 2022 Form and instructions (Tax Alert 2023-0636)

— Mar 31: EY publication highlights accounting implications of 2023 Q1 income tax developments (Tax Alert 2023-0634)

International

— Apr 06: EY Canada's Tax Matters @ EY for April 2023 (Tax Alert 2023-0674)

— Apr 05: OECD releases fifth annual peer review report on BEPS Action 6 relating to the prevention of treaty abuse (Tax Alert 2023-0671)

— Apr 05: Malaysia implements instant approval of employer submitted expatriate projection applications (Tax Alert 2023-0669)

— Apr 05: Singapore Enhanced medical insurance requirements for Work Permit and S Pass holders from July 1 (Tax Alert 2023-0668)

— Apr 05: Ireland launches consultation on EU Minimum Tax Directive and proposed legislative approach (Tax Alert 2023-0666)

— Apr 04: Albania introduces Single Permits and new Residence Permits for specific categories of foreign nationals (Tax Alert 2023-0665)

— Apr 04: Australian Treasury releases Exposure Draft Bill to deny deductions for payments by significant global entities to low-tax jurisdictions relating to intangible assets (Tax Alert 2023-0664)

— Apr 04: South Africa announces automatic extensions for eligible visa holders until December 31 (Tax Alert 2023-0663)

— Apr 04: Kenya High Court upholds that interchange fees are financial services exempt from VAT (Tax Alert 2023-0662)

— Apr 04: Bulgaria introduces new temporary obligation for solidarity contribution (Tax Alert 2023-0661)

— Apr 04: EU VAT Committee publishes working paper on non-fungible tokens (Tax Alert 2023-0659)

— Apr 04: Canada Federal budget 2023/24: A made-in-Canada plan (Tax Alert 2023-0658)

— Apr 04: Singapore updates scoring criteria under the new Complementary Assessment framework (Tax Alert 2023-0655)

— Apr 04: Hong Kong requires applicants under four Talent Admission Schemes to submit visa and entry permit applications online (Tax Alert 2023-0652)

— Apr 03: USCIS announces H-1B lottery results and considerations for working in Canada (Tax Alert 2023-0642)

— Apr 03: Saudi Arabia amends Implementing Regulations on excise tax (Tax Alert 2023-0641)

— Apr 03: Canada announces amendments to ease the Prohibition on the Purchase of Residential Property by Non-Canadians Act (Tax Alert 2023-0637)

— Mar 31: Portugal's Immigration and Border staff announce strike from April 5 (Tax Alert 2023-0627)

— Mar 31: Australia proposes to impose additional registration requirements under the Foreign Investment Review Board Regulations (Tax Alert 2023-0622)

— Mar 31: Costa Rican inactive entities must file their informative return on new form D-195 by 31 May 2023 (Tax Alert 2023-0621)

Legislation

— Apr 04: CMS Issues FY 2024 Hospice Proposed Payment Rule (Tax Alert 2023-0650)

— Apr 03: CMS issues CY 2024 Medicare Advantage rate announcement (Tax Alert 2023-0645)

— Apr 03: Senate Finance Committee hearing on pharmacy benefit managers (Tax Alert 2023-0644)

— Mar 31: House Ways and Means Subcommittee, Appropriations Subcommittee, and Energy and Commerce Committee hold hearings on HHS FY 2024 budget request (Tax Alert 2023-0630)

— Mar 31: House Energy and Commerce Committee hearing on transparency and competition in health care (Tax Alert 2023-0628)

— Mar 31: House Financial Services Committee questions regulators on failures of Silicon Valley Bank, Signature Bank (Tax Alert 2023-0626)

— Mar 31: What to expect in Washington (March 31) (Tax Alert 2023-0625)

States

— Apr 06: Michigan Department of Treasury announces decrease in personal income tax rate retroactive to January 1, 2023, withholding tables will not be updated (Tax Alert 2023-0670)

— Apr 04: Social Security Administration publishes wage base projections for 2024 through 2032 (Tax Alert 2023-0651)

— Apr 03: Kentucky enacts technical corrections to elective pass-through entity tax (Tax Alert 2023-0649)

— Apr 03: State corporate income and franchise tax developments in the first quarter of 2023 (Tax Alert 2023-0648)

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Recent Newsletters

State and Local Tax Weekly
   Highlights of this edition include:

— Kentucky law updates IRC conformity, adopts an elective passthrough entity tax, and makes sales/use tax changes. On March 24, 2023, Kentucky Governor Andy Beshear signed into law HB 360, which includes a number of tax-related changes, which are discussed below.

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

ITS/Washington Dispatch
   Highlights of this edition include:

Legislation

  • President Biden releases FY’24 Budget with major international policy proposals

Treasury and IRS news

  • US officials offer insights on major pending international regulatory projects
  • Turkish Lira’s hyperinflationary status has federal tax implications for US multinationals
  • IRS announces plans to issue guidance on certain NFTs as collectibles

Transfer pricing

  • IRS planning new APA process
  • IRS considering Section 482 regulation for parent’s implicit support in pricing intercompany loans

OECD developments

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

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IRS Weekly Wrap-Up

Announcements

 2023-07Federal Tax treatment of certain Red Hill fuel spill payments

Notices

 2023-31Extension of the transition period for the single-country exception under Section 903 of the Internal Revenue Code
 2023-29 AAppendix A: Treasury/IRS-defined MSAs and non-MSAs for IRA Energy Community Tax Credit Bonus
 2023-29 BAppendix B: MSAs and non-MSAs that meet the Fossil Fuel Employment threshold (unemployment rate requirement yet to be determined)
 2023-29 CAppendix C: Census tracts that have ever had, since December 31, 1999, a closed coal mine or have ever had, since December 31, 2009, a retired coal-fired electric generating unit, and directly adjoining tracts

Internal Revenue Bulletin

 2023-14Internal Revenue Bulletin of April 3, 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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