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June 23, 2023
2023-1125

U.S. Tax This Week for June 23

Ernst & Young's U.S. Tax This Week newsletter for the week ending June 23 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

IRS issues much-anticipated proposed rules on transferring renewable energy tax credits

The IRS has released proposed rules (REG-101610-23) on transferring renewable energy credits. The Inflation Reduction Act added IRC Section 6418, which allows an eligible taxpayer to transfer all or a portion of an eligible credit to an unrelated transferee taxpayer for cash. The provisions were effective January 1, 2023, but many taxpayers have been waiting for more details on how to implement the provisions, which the proposed regulations provide. EY Tax Alert 2023-1103 has details.

Senate approves Chile tax treaty resolution

The Senate June 22 approved the Resolution of Advice and Consent to Ratification for Treaties Cal. #1, Tax Convention with Chile (Treaty Doc. 112-8) on a 95-2 vote. Senators Rand Paul (R-KY) and Josh Hawley (R-MO) voted against the resolution. Reuters reported, "Final approval will send the treaty to the White House, where President Joe Biden planned to sign the papers necessary for ratification." EY Tax Alert 2023-1118 has details.

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EY Guides and Publications

QUEST Economic Update highlights key US and global economic trends - June 20, 2023
EY's Quantitative Economics and Statistics (QUEST) group has developed the attached publication summarizing the latest key economic and employment trends in a short, easy-to-read format. Developments such as growth trends in US gross domestic product (GDP), US employment and Federal Reserve activity are highlighted, as are economic trends outside the United States that may affect US businesses.

The Latest on BEPS and Beyond | June 2023
In this edition, the following countries/organizations are discussed: BEPS 2.0, G7, International Accounting Standards Board, OECD, Tax Without Borders Governing Board, United Nations, Australia, Bahamas, Canada, Czech Republic, European Union, Germany, Guernsey, Ireland, Isle of Man, Jersey, Kenya, Luxembourg, Malaysia, Netherlands, New Zealand, Norway, Poland, Qatar, Sierra Leone, Spain, Sweden, Switzerland, Thailand, United States, Uzbekistan and Vietnam.

Complex calculations - exploring the Corporate AMT (Tax Analysts)
This article, published in Tax Analysts, discusses the challenges and international tax issues companies will need to navigate when analyzing the impact of the Inflation Reduction Act's Corporate Alternative Minimum Tax (CAMT).

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Upcoming Webcasts

State & local tax issues impacting the real estate industry (June 27)
As the real estate industry continues to address today’s challenges – rising interest rates, the potential for a recession, lackluster deal flow and the lingering impacts of COVID-19 – the focus has turned to saving cash and reaffirming balance sheets in anticipation of future growth and positive returns. This EY Webcast will address some of the current trends that clients are thinking about, or should be thinking about, as we navigate through 2023 and beyond.

Finance and treasury: How to navigate the changing global tax landscape (June 28)
During this EY Webcast, Ernst & Young professionals will discuss key tax trends and topics that will affect global finance and treasury activities.

BorderCrossings … with EY transfer pricing and tax professionals (June 29)
During this EY Webcast, Ernst & Young transfer pricing and tax professionals will help you stay informed and able to adopt a more proactive stance in developing and defending your transfer pricing policies and practices.

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Recent Tax Alerts

Internal Revenue Service

— Jun 22: IRS issues proposed regulations on constructing corporate bond yield curve used by defined benefit plans, insurance companies (Tax Alert 2023-1114)

— Jun 20: IRS issues proposed rules on direct-pay elections of applicable energy tax credits (Tax Alert 2023-1102)

— Jun 19: IRS GLAM asserts that many nonprofit organizations that develop NIL collectives for student-athletes are not tax exempt (Tax Alert 2023-1093)

— Jun 16: IRS updates guidance on energy communities for bonus IRC Section 45 and 48 credits (Tax Alert 2023-1083)

— Jun 16: IRS issues temporary and proposed regulations on elective payment of advanced manufacturing investment credit (Tax Alert 2023-1080)

International

— Jun 22: Switzerland agrees to partial revision of VAT Act (Tax Alert 2023-1124)

— Jun 22: Australian thin capitalization and subsidiary disclosure measures introduced into Parliament (Tax Alert 2023-1122)

— Jun 22: Italian Revenue Agency issues ruling on VAT fixed establishment intervention (Tax Alert 2023-1120)

— Jun 22: UK Government announces new 'Developing Countries Trading Scheme' (Tax Alert 2023-1117)

— Jun 22: Czech Republic's major amendments to immigration regulations to go into effect on 1 July 2023 (Tax Alert 2023-1116)

— Jun 22: Hong Kong simplifies application process for seeking tax residence certificates (Tax Alert 2023-1115)

— Jun 21: Montenegro begins issuing visas and residence permits to digital nomads (Tax Alert 2023-1109)

— Jun 21: Luxembourg Tax Authority publishes guidance on the computation of taxable income of Reverse Hybrid Entities (Tax Alert 2023-1108)

— Jun 21: Taiwan amends the Assessment Rules for withholding tax mitigation regime (Tax Alert 2023-1106)

— Jun 20: Saudi Arabia announces sixth wave of Phase 2 e-invoicing integration (Tax Alert 2023-1099)

— Jun 20: European Commission publishes draft Directive on Faster and Safer Relief of Excess Withholding Taxes (FASTER) (Tax Alert 2023-1097)

— Jun 20: European Union to launch new online Schengen Visa application process (Tax Alert 2023-1096)

— Jun 20: German Ministry of Finance issues updated Administrative Principles regarding Transfer Pricing (Tax Alert 2023-1095)

— Jun 20: Switzerland votes to amend Constitution to allow Pillar Two implementation (Tax Alert 2023-1094)

— Jun 19: Canada's proposed regulations amend valuation for duty rules for imported goods (Tax Alert 2023-1092)

— Jun 19: Ghana Revenue Authority issues 'Practice Note on Taxation of Gross Gaming Revenue and Winnings from Lottery Operations' (Tax Alert 2023-1091)

— Jun 19: Costa Rica Executive Branch publishes Regulations to the General Customs Law (Tax Alert 2023-1089)

— Jun 16: Brazil transfer pricing law enforceable beginning 1 January 2024 (Tax Alert 2023-1078)

— Jun 16: USCIS expands premium processing to change of status requests for applicants seeking F, M, or J status (Tax Alert 2023-1076)

— Jun 16: Azerbaijan amends Immigration Code (Tax Alert 2023-1075)

— Jun 15: Argentine Government issues regulations for the promotional regime of investments in the automotive and auto parts industry (Tax Alert 2023-1069)

Legislation

— Jun 22: House Financial Services questions Federal Reserve Chair Powell on monetary policy, inflation, bank capital rules (Tax Alert 2023-1123)

— Jun 22: House Education and the Workforce Health subcommittee hearing on competition and transparency (Tax Alert 2023-1121)

— Jun 22: Senate approves Chile tax treaty resolution (Tax Alert 2023-1118)

— Jun 21: What to expect in Washington (June 21) (Tax Alert 2023-1105)

— Jun 20: JCT estimates of OECD-led tax deal Pillar Two released (Tax Alert 2023-1100)

States

— Jun 21: Minnesota law establishes paid family and medical insurance program with contributions and benefits starting January 1, 2026 (Tax Alert 2023-1111)

— Jun 20: Illinois omnibus tax bill makes various tax changes, budget implementation bill increases franchise tax exemption (Tax Alert 2023-1098)

— Jun 19: Minnesota law requires paid sick and safe leave starting in 2024 (Tax Alert 2023-1088)

— Jun 16: Texas enacts incentives program to replace expired Ch. 313 School Value Limitation Program (Tax Alert 2023-1081)

— Jun 15: Arkansas issues revised 2023 withholding formula and tables; W-2 electronic filing threshold reduced (Tax Alert 2023-1070)

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Recent Newsletters

State and Local Tax Weekly
   Highlights of this edition include:

— Minnesota omnibus tax legislation includes increased taxes on corporations and individuals, transportation bill includes a new retail delivery fee On May 24, 2023, Minnesota Governor Tim Walz signed the omnibus tax bill, HF 1938, which imposes new taxes on multinational corporations, as well as individuals with net investment income over $1 million.

— Nebraska adopts elective pass-through entity tax and phases-in income tax rate reductions On May 31, 2023, Nebraska Governor Jim Pillen signed LB 754, which enacts an elective pass-through entity tax (PTET), including provisions for retroactive elections and phased-in reductions to individual and corporate income tax rates. The legislation took effect upon the Governor's signature.

—  Income/Franchise, Sales & Use, Business Incentives, Property Tax, Controversy, Payroll & Employment Tax, Miscellaneous Tax, Unclaimed Property, Value Added Tax, Unclaimed Property

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IRS Weekly Wrap-Up

Final Regulations

 TD 9975Pre-Filing Registration Requirements for Certain Tax Credit Elections

Proposed Regulations

 REG–120653–22Advanced Manufacturing Investment Credit; Hearing
 REG–105595–23Elective Payment of Advanced Manufacturing Investment Credit
 REG–101610–23Section 6418 Transfer of Certain Credits
 REG–101607–23Section 6417 Elective Payment of Applicable Credits

Revenue Procedures

 2023-24List of Automatic Changes

Revenue Rulings

 2023-12Section 1274.—Determination of Issue Price in the Case of Certain Debt Instruments Issued for Property

Notices

 2023-48Part III —- Administrative, Miscellaneous, and Procedural - Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates

Internal Revenue Bulletin

 2023-26Internal Revenue Bulletin of June 26, 2023
 2023-25Internal Revenue Bulletin of June 20, 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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