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April 16, 2023
2023-0711

U.S. International Tax This Week for April 14

Ernst & Young's U.S. International Tax This Week newsletter for the week ending April 14 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 House and Senate will be back in session on 17 April, after a two-week break. Rapidly approaching, the Biden Administration and Congress will need to reach agreement on the debt limit by around mid-year to avoid default, given that Treasury is already using extraordinary measures to borrow additional funds without breaching the debt ceiling. Before the break, President Biden indicated he would not negotiate spending cuts and wants no conditions on extending the debt limit. House Speaker Kevin McCarthy (R-CA) has said, however, there is no possibility congressional Republicans will accept a "clean" debt limit without spending cuts.

Congressional Republicans want a leaner budget that balances in 10 years, provided by reducing nondefense discretionary spending, reclaiming unspent COVID funds, strengthening work requirements for federal programs, and adding measures to lower energy costs.

The IRS issued proposed rules (REG-109309-22) this week that would obsolete Notice 2016-66 and identify transactions that are the same as, or substantially similar to, certain micro-captive transactions as listed transactions and other micro-captive transactions as transactions of interest. Material advisors and certain participants in these listed transactions and transactions of interest must file disclosures with the IRS or face penalties.

The IRS also released Announcement 2023-11, which explains that the rules are being proposed in light of certain court decisions holding that the Administrative Procedure Act requires the IRS to identify listed transactions through notice-and-comment rulemaking, and that the IRS intends to issue further regulations identifying other listed transactions, to be finalized in 2023.

A public hearing is scheduled for 19 July; comments on the regulations may be sent to the IRS through 10 June.

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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.

Servitization: How to unlock the future of XaaS business models (April 27)
During this EY Webcast, Ernst & Young professionals will discuss service-led business models. Servitization represents a paradigm shift in the commercial and economic landscape — from the traditional buy or sell business model to a long-term lease, service, or subscription-based model. The potential impact of these new models crosses sectors and geography.

BorderCrossings... With EY transfer pricing and tax professionals (April 27)
During this EY Webcast, Ernst & Young professionals will talk about the results APMA reported in its 2022 APA Annual Statutory Report and discuss the challenges facing APMA and what the future holds.

EY Tax.Tech™ Ecosystem series: Preparing for OECD Pillar Two global minimum tax calculations, provision and compliance requirements (May 4)
During this EY Webcast, Ernst & Young professionals will discuss data requirements, processing steps and timeline necessary to meet upcoming BEPS 2.0 Pillar Two requirements. They will also highlight tools included on the Orbitax International Tax Platform that can help companies address issues related to the global minimum tax. These tools leverage Thomson Reuters integration to improve and automate your tax compliance preparation and review process. Finally, they’ll review the latest use cases and preview what’s ahead.

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Recent Tax Alerts

Africa

— 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)

Asia

— Apr 07: India announces key tax proposals impacting individuals and employers in fiscal budget 2023 (Tax Alert 2023-0684)

— 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 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)

Canada & Latin America

— Apr 10: Argentine tax authorities suspend the validity of exemption certificates for income tax and VAT withholdings on imports of goods (Tax Alert 2023-0690)

— Apr 10: Uruguay enacts law with tax adjustments for PIT and Social Security Assistant Tax taxpayers (Tax Alert 2023-0688)

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

Europe

— Apr 11: Sweden set to implement major changes relating to EU Blue cards (Tax Alert 2023-0691)

— Apr 07: Luxembourg amends some procedural tax rules (Tax Alert 2023-0682)

— Apr 06: UK concludes negotiations to join Comprehensive and Progressive Agreement for Trans-Pacific Partnership (Tax Alert 2023-0677)

— 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: 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: 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)

Middle East

— Apr 11: Saudi Arabia approves amendments to the Transfer Pricing Bylaws to include zakat payers as part of covered entities (Tax Alert 2023-0694)

— Apr 11: UAE announces the creation of a new flexible work permit for freelancers “of all skill levels” (Tax Alert 2023-0692)

Oceania

— Apr 12: Australian Treasury releases Exposure Draft Bill — Multinational tax transparency public country-by-country reporting (Tax Alert 2023-0702)

— 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)

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IRS Weekly Wrap-Up

Internal Revenue Bulletin

 2023-16Internal Revenue Bulletin of April 17, 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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