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July 14, 2023
2023-1233

U.S. Tax This Week for July 14

Ernst & Young's U.S. Tax This Week newsletter for the week ending July 14 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 outcome statement on progress on Pillars One and Two of BEPS 2.0 project

On 12 July 2023, at the conclusion of the 15th meeting of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS), the Organisation for Economic Co-operation and Development (OECD) released a statement reflecting the agreement reached by 138 of the 143 Inclusive Framework member jurisdictions on the remaining elements of their project on addressing the tax challenges of the digitalization of the economy (the BEPS 2.0 project). EY Tax Alert 2023-1223 has details.

Final regulations address split-waiver elections for consolidated NOL carrybacks

In final regulations (TD 9977) on split-waiver elections, the IRS permits consolidated groups to waive carry back of consolidated net operating losses (CNOLs) that are attributable to an acquired member to pre-acquisition years during which the acquired member was a member of a former consolidated group. The final regulations allow the acquiring consolidated group to access its own carryback tax years while simultaneously preventing a carryback to tax years of the acquired member (which would, for example, generate a refund payable to the original consolidated group). Two distinct elections are contemplated: an amended statute split-waiver election and an extended split-waiver election. EY Tax Alert 2023-1220 has details.

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Upcoming Webcasts

Changes made to New Jersey’s Corporation Business Tax (July 25)
During this EY Webcast, Ernst & Young Indirect/State and Local Tax practitioners will highlight changes enacted as part of the CBT overhaul, as well as other notable bills enacted this legislative session, such as changes to the New Jersey Business Alternative Income Tax (i.e., the state’s elective pass-through entity tax) and pending legislation (A.4694/S.3128) that, if enacted, would adopt a convenience of the employer rule.

Tax in a time of transition: Legislative, economic, regulatory and IRS developments (July 28)
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.

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Recent Tax Alerts

Internal Revenue Service

— Jul 12: Final regulations address split-waiver elections for consolidated NOL carrybacks (Tax Alert 2023-1220)

— Jul 11: Sales/Use Tax Quarterly Update for third quarter of 2023 (Tax Alert 2023-1210)

International

— Jul 13: USCIS policy guidance on rescheduling biometrics services appointments provided (Tax Alert 2023-1232)

— Jul 13: Peru replaces LIBOR with SOFR for WHT purposes on interest paid to nonresidents (Tax Alert 2023-1231)

— Jul 13: Romania issues further guidance clarifying implementation of EU Public CbCR Directive through Romanian Ministry of Finances Order 1730/2023 (Tax Alert 2023-1230)

— Jul 13: PE Watch | Latest developments and trends, July 2023 (Tax Alert 2023-1229)

— Jul 13: Spain | Obligation to submit the plastic packaging tax ledgers by the end of July 2023; Spanish Tax Authority clarifies interpretative issues (Tax Alert 2023-1228)

— Jul 13: Czech Republic's Long-Term Visas now available to digital nomads (Tax Alert 2023-1227)

— Jul 13: Tanzanian Finance Act, 2023 analysis (Tax Alert 2023-1225)

— Jul 12: Gibraltar issues Budget 2023/24 (Tax Alert 2023-1224)

— Jul 12: OECD releases outcome statement on progress on Pillars One and Two of BEPS 2.0 project (Tax Alert 2023-1223)

— Jul 12: Costa Rica Tax Authority announces 31 July deadline for receipt of CRS and FATCA financial account reports (Tax Alert 2023-1222)

— Jul 12: German Federal Ministry of Finance publishes draft BEPS 2.0 Pillar Two implementation bill and accompanying measures (Tax Alert 2023-1221)

— Jul 12: Luxembourg Tax Authority issues updated version of MDR guidance (Tax Alert 2023-1217)

— Jul 12: Cyprus tax authorities issue transfer pricing simplification measures (Tax Alert 2023-1216)

— Jul 12: Uruguay makes temporary corporate income tax benefit for promoters and construction companies permanent (Tax Alert 2023-1215)

— Jul 12: OECD releases IF Pillar One progress statement (Tax Alert 2023-1213)

— Jul 11: European Commission adopts rules for implementing the Foreign Subsidies Regulation (Tax Alert 2023-1209)

— Jul 11: Malaysia updates Labor Market Testing requirements for Employment Pass applicants (Tax Alert 2023-1207)

— Jul 11: Draft decree provides guidance for nonresidents subject to Colombia's version of digital services tax (Significant Economic Presence) (Tax Alert 2023-1206)

— Jul 11: Germany's amendments to Skilled Worker immigration regulations to go into effect starting November 2023 (Tax Alert 2023-1204)

— Jul 11: Panama adopts new classification system for income tax returns (Tax Alert 2023-1202)

— Jul 11: Panama publishes 2023 list of reportable jurisdictions for Common Reporting Standard purposes (Tax Alert 2023-1201)

— Jul 11: Peruvian Tax Authority rules merger between nonresident entities triggers indirect transfer of Peruvian shares (Tax Alert 2023-1200)

— Jul 11: Costa Rica Tax Authority announces 13% VAT on tourism services from 1 July 2023 (Tax Alert 2023-1199)

— Jul 10: Turkiye limits 0% withholding tax rate on share-buy-back transactions for corporations with shares traded in Borsa Istanbul (Tax Alert 2023-1196)

— Jul 10: Turkiye proposes amendments in Turkish tax laws, including an increase in corporate income tax rates (Tax Alert 2023-1195)

— Jul 10: Turkiye increases VAT rates on goods and services (Tax Alert 2023-1194)

— Jul 10: EY Canada's Tax Matters @ EY for July 2023 (Tax Alert 2023-1193)

— Jul 10: Japan announces Specified Skilled Worker (ii) route to expand to foreign workers in nine new industries (Tax Alert 2023-1190)

— Jul 10: Costa Rica publishes resolution on conditions for using Tax Authority Platform (Tax Alert 2023-1189)

— Jul 10: Hong Kong extends exemption allowing applicants to file renewal applications from outside Hong Kong (Tax Alert 2023-1188)

— Jul 10: Panama Tax Authority provides process for deregistering certain 'fiscal equipment' (Tax Alert 2023-1187)

— Jul 05: Spain: Planning now to comply with pending mandatory e-invoicing for B2B transactions (Tax Alert 2023-1183)

— Jun 30: Spanish Supreme Court affirms judgment holding domestic withholding tax exemption applies to EU shareholder dividends (Tax Alert 2023-1181)

— Jun 30: Netherlands issues new explanatory Decree on international tax matters (Tax Alert 2023-1180)

— Jun 30: Spanish immigration authorities clarify foreign students’ ability to work in Spain (Tax Alert 2023-1176)

— Jun 30: South Africa further extends deadline for Zimbabwe Exemption Permit holders to change immigration status (Tax Alert 2023-1175)

— Jun 30: OECD releases 2023 report on tax transparency in Latin America (Tax Alert 2023-1174)

— Jun 30: Kenya rolls out new tax return template to capture data on intercompany transactions for MNEs (Tax Alert 2023-1170)

— Jun 30: Rwanda presents the national budget for financial year 2023/24 (Tax Alert 2023-1169)

Legislation

— Jul 14: What to expect in Washington (July 14) (Tax Alert 2023-1238)

— Jul 10: CMS proposes plan to repay 340B hospitals for drug underpayments and recoup increased payments for non-drug items and services (Tax Alert 2023-1197)

States

— Jul 12: Payroll Month in Review | June 2023 (Tax Alert 2023-1219)

— Jul 12: Ohio budget legislation contains tax changes affecting businesses and individuals (Tax Alert 2023-1218)

— Jul 11: Arkansas law prohibits localities from levying a tax on income (Tax Alert 2023-1208)

— Jul 05: New Jersey Governor signs bill overhauling Corporation Business Tax (Tax Alert 2023-1182)

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IRS Weekly Wrap-Up

Final Regulations

 TD 9977Carryback of Consolidated Net Operating Losses

Proposed Regulations

 REG-120730-21Employee Benefits Security Administration

Notices

 2023-37Expenses related to Covid-19 and preventive care for purposes of high deductible health plans
 2023-48Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates

Internal Revenue Bulletin

 2023-27Internal Revenue Bulletin of July 3, 2023
 2023-28Internal Revenue Bulletin of July 10, 2023
 2023-29Internal Revenue Bulletin of July 17, 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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