April 30, 2023
U.S. International Tax This Week for April 28
Ernst & Young's U.S. International Tax This Week newsletter for the week ending April 28 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.
The House on 26 April passed the Limit, Save, Grow Act of 2023 (HR 2811), a bill assembled by the Republican leadership that would suspend the statutory debt ceiling until 31 March 2024, or until $1.5 trillion of debt over the current statutory limit is incurred (whichever happens first). The bill would also cut trillions of dollars in spending across a broad swath of programs and repeal a number of tax breaks enacted in last year's Inflation Reduction Act (IRA), among other changes. The Congressional Budget Office concluded this week that the bill would result in $4.8 trillion in deficit reduction from 2023—2033, while also reducing projected tax collections by $191 billion during that period as a result of repealing IRS funding provided in the IRA. Four Republicans voted against the bill, which passed the House 217-215.
The Senate is not expected to take up the bill. President Biden said before the bill was passed that he would veto the legislation if it came to his desk, insisting he will not negotiate with congressional Republicans and will only sign a "clean" bill to raise the debt ceiling. The White House has repeatedly asserted that the President will not negotiate budget and economic policy in the context of a debt-ceiling measure. In a Statement of Administration Policy on 25 April, the White House said, in part: "The President has been clear that he will not accept such attempts at hostage-taking. House Republicans must take default off the table and address the debt limit without demands and conditions, just as the Congress did three times during the prior Administration."
A Treasury official this week said no decision has been made on whether the government will issue interim guidance on the new corporate alternative minimum tax (CAMT). The official was quoted as saying that while the "overriding comment" from taxpayers is that more CAMT guidance is needed, it is still not clear if Treasury will wait for proposed regulations or issue further notices.
The IRS on 24 April released Notice 2023-24, updating earlier guidance (Notice 2014-21) to remove a sentence that described digital currency as "not having legal tender status in any jurisdiction." The amendment was made due to law changes in foreign jurisdictions that characterize Bitcoin as legal tender.
The change to Notice 2014-21 does not affect the answers to the FAQs in the 2014 guidance, including the conclusion that convertible virtual currency is not treated as currency that could generate foreign currency gain or loss for US federal tax purposes. Notice 2014-21 provides that convertible virtual currency is treated as property for US federal tax purposes and general tax principles that apply to property transactions also apply to transactions that use convertible virtual currency.
An OECD official this week was quoted as saying the organization expects to release a BEPS Pillar Two qualified domestic minimum top-up tax (QDMTT) safe harbor by summer and is also working on other safe harbors and simplifications. The official specified the OECD is working on other QDMTT guidance, substance-based income exclusion and deferred tax-liability recapture rules. And, finalization of the Pillar Two GLoBE information return reportedly is still on track for release in mid-2023.
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.
International tax talk quarterly series with the EY Global Tax Desk Network (May 9)
During this EY Webcast, our Global Tax Desk professionals will provide insights on recent significant tax developments in Australia, Brazil, India, Netherlands and Russia and explain how they might affect your businesses.
Tax in a time of transition: Legislative, economic, regulatory and IRS developments (May 19)
During this EY Webcast, Ernst & Young professionals will discuss overview of recent tax and economic developments designed to help you stay on top of changes in today’s shifting economic, legislative and regulatory environment. In this regularly occurring webcast series, panelists will provide updates on: (i) the US economy and tax policy; (ii) what’s happening at the IRS; and (iii) breaking developments.
Recent Tax Alerts
— Apr 20: Russian authorities require exiting foreign companies to pay 'contributions' at 5% or 10% of market value - implications for US multinationals (Tax Alert 2023-0738)
— Apr 26: Ghana's new laws introduce new taxes affecting individuals and businesses (Tax Alert 2023-0763)
— Apr 25: Ghana: Tax treatment and the recognition of deferred tax on Expected Credit Losses (Tax Alert 2023-0761)
— Apr 27: Mainland China relaxes pre-travel COVID-19 testing requirements for all inbound travelers (Tax Alert 2023-0771)
Canada & Latin America
— Apr 27: Brazil implements new visa-free policy for seafarers (Tax Alert 2023-0773)
— Apr 25: Chilean government introduces amendments to the Mining Royalty bill (Tax Alert 2023-0760)
— Apr 21: Uruguay's Executive Branch raises income limit to apply for simplified regime for Personal Income Tax (Tax Alert 2023-0749)
— Apr 26: Luxembourg provides details on new draft transfer pricing provisions (Tax Alert 2023-0765)
— Apr 24: Czech Republic's Chamber of Deputies approves significant amendments to existing immigration laws (Tax Alert 2023-0756)
— Apr 20: Germany approves amendments to the Skilled Worker immigration regulations (Tax Alert 2023-0745)
— Apr 20: Poland implements amendments to the Act on Foreigners (Tax Alert 2023-0743)
— Apr 20: German Finance Ministry releases discussion draft on pending introduction of e-invoice (Tax Alert 2023-0741)
— Apr 20: European Parliament approves EU Emission Trading System reform and new EU Carbon Border Adjustment Mechanism (Tax Alert 2023-0740)
IRS Weekly Wrap-Up
Internal Revenue Bulletin
| ||2023-18||Internal Revenue Bulletin of May 1, 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.