July 21, 2023
U.S. Tax This Week for July 21
Ernst & Young's U.S. Tax This Week newsletter for the week ending July 21 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.
Top of the Week
OECD/G20 Inclusive Framework releases documents on Pillars One and Two: First Impressions
On 17 July, the OECD released several technical documents on Pillars One and Two of the OECD/G20 project on addressing the tax challenges of the digitalization of the economy (the BEPS 2.0 project). At the same time, the OECD released additional documents covering a range of international tax topics, including developments with respect to tax transparency, that were prepared for a meeting between the G20 Finance Ministers and Central Bank Governors in Gandhinagar, India on 17-18 July. EY Tax Alert 2023-1259 has details.
Ways & Means subpanel asks Treasury about Pillar Two design
The Republican majority of the House Ways & Means Tax Subcommittee July 19 challenged Michael Plowgian, Deputy Assistant Treasury Secretary for International Tax Affairs, to defend the OECD-led BEPS 2.0 global minimum tax project, US support for the project and how the government has negotiated various aspects of the global minimum tax rules. Members also criticized the Biden Administration for not regularly consulting with Congress and, specifically, the Committee as the negotiations have moved forward. They specifically questioned the constitutionality and global legal framework for allowing other nations a potential share of US taxes through the Undertaxed Profits Rule (UTPR) and why the US R&D credit isn't treated under the global system in the same way as refundable R&D credits provided by other countries. EY Tax Alert 2023-1277 has details.
EY Guides and Publications
QUEST Economic Update highlights key US and global economic trends – July 14, 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 | July 2023
EY’s Latest on BEPS and Beyond (July 2023 edition) highlights (1) OECD releases statement on the progress on Pillars One and Two; (2) Commission BEPS 2.0 Progress Report announces upcoming OECD releases; and (3) OECD releases 2023 report on tax transparency in Latin America.
Global Tax Policy and Controversy Watch | July 2023 edition
This edition of EY’s Global Tax Policy and Controversy Watch highlights (1) OECD’s outcome statement on progress on BEPS 2.0 Pillars One and Two; (2) the US IRS’s prescreening process for taxpayers seeking advance pricing agreements; and (3) transfer pricing developments from Brazil.
Changes made to New Jersey’s Corporation Business Tax (July 25)
Members of the business community, state tax practitioners and state officials spent the last several months working together on a compromise tax package that overhauls New Jersey’s Corporation Business Tax (CBT). This joint effort culminated in the enactment of SB 3737/AB 5323 on July 3, 2023. During this EY Webcast, EY 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)
Please join us for a fast-paced 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 EY 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
— Jul 20: Spanish Supreme Court issues judgment on the probative value of foreign tax-residence certificates (Tax Alert 2023-1280)
— Jul 20: UK adds Dominica, Honduras, Namibia, Timor-Leste and Vanuatu to its list of visa nationals (Tax Alert 2023-1276)
— Jul 20: Peruvian Tax Authority establishes guidelines for gains or losses derived from exchange-rate differences from foreign currency loans (Tax Alert 2023-1275)
— Jul 20: Kenya enacts tax changes under Finance Act, 2023 (Tax Alert 2023-1274)
— Jul 19: Cyprus introduces 3% VAT rate and adds goods to 0% VAT list (Tax Alert 2023-1270)
— Jul 18: Turkiye's new law increasing the corporation tax rates enters into force (Tax Alert 2023-1266)
— Jul 18: German Federal Ministry of Finance publishes draft decree regarding the application of anti-hybrid rules (Tax Alert 2023-1265)
— Jul 18: German Ministry of Finance surprises with draft bill for biggest corporate tax reform since 2008 (Tax Alert 2023-1264)
— Jul 18: UK publishes Statement of Changes to Immigration Rules (Tax Alert 2023-1263)
— Jul 18: Nigeria | Current development on taxation of nonresident companies engaged in shipping business (Tax Alert 2023-1262)
— Jul 18: Hong Kong introduces new tax treatments for insurers upon adoption of a risk-based capital regime (Tax Alert 2023-1260)
— Jul 18: OECD/G20 Inclusive Framework releases documents on Pillars One and Two: First Impressions (Tax Alert 2023-1259)
— Jul 17: Panamanian Tax Authority extends deadline for resident agents to file affidavit on accounting records of offshore entities (Tax Alert 2023-1257)
— Jul 17: Estonia | Significant tax changes in 2024 and 2025 (Tax Alert 2023-1256)
— Jul 17: South Africa | New 'beneficial ownership' reporting requirements for companies (Tax Alert 2023-1255)
— Jul 17: Cyprus tax authorities issue transfer pricing guidance on the pricing of 'back-to-back' financing transactions (Tax Alert 2023-1254)
— Jul 17: UK announces upcoming increase in Visa fees and Immigration Health Surcharge (Tax Alert 2023-1253)
— Jul 17: Luxembourg introduces new online application processes for EU citizens and third-country nationals (Tax Alert 2023-1252)
— Jul 14: OECD releases 2023 report on tax transparency in Africa (Tax Alert 2023-1247)
— Jul 14: Update on Switzerland/France cross border tax and social security agreements (Tax Alert 2023-1245)
— Jul 14: UK passes Finance (No.2) Act 2023 introducing OECD Pillar Two measures (Tax Alert 2023-1243)
— Jul 14: Ireland launches consultation on new taxation measures to apply to certain outbound payments — comment period closes on 8 August (Tax Alert 2023-1242)
— Jul 14: Uruguay’s Executive Power submits accountability bill with tax provisions to Parliament (Tax Alert 2023-1241)
— Jul 14: UAE MoHRE announces new requirement for certain companies to hire UAE nationals (Tax Alert 2023-1239)
— Jul 14: Italy expedites work authorization process for eligible third-country nationals (Tax Alert 2023-1237)
— Jul 20: Ways & Means subpanel asks Treasury about Pillar Two design (Tax Alert 2023-1277)
— Jul 19: What to expect in Washington (July 19) (Tax Alert 2023-1269)
— Jul 20: Alabama law temporarily exempts mandatory overtime pay from state personal income tax (Tax Alert 2023-1282)
— Jul 19: Vermont continues to accept relocation grant applications for employees moving to the state (Tax Alert 2023-1271)
— Jul 18: Minnesota Tax Court holding provides guidance on whether taxpayer's activities create nexus for income tax purposes and are protected by PL 86-272 (Tax Alert 2023-1267)
— Jul 17: Georgia law temporarily lowers new employer SUI rate and reinstates administrative assessment (Tax Alert 2023-1258)
— Jul 14: Washington enacts state property tax exemption for personal property used in generating renewable energy (Tax Alert 2023-1244)
IRS Weekly Wrap-Up
| ||2023-13||Section 1274.—Determination of Issue Price in the Case of Certain Debt Instruments Issued for Property|
Internal Revenue Bulletin
| ||2023-30||Internal Revenue Bulletin of July 24, 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.