August 18, 2023
U.S. Tax This Week for August 18
Ernst & Young's U.S. Tax This Week newsletter for the week ending August 18 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
New York's proposed regulations implementing corporate franchise tax reform from 2014 are largely the same as prior drafts and include some notable changes
On August 9, the New York State (NYS) Department of Taxation and Finance (Department), in accordance with the NYS State Administration and Procedures Act (SAPA), proposed regulations under Article 9-A corporate franchise tax (Parts 1-9) and Article 33 insurance corporation franchise tax (Part 32). The proposed regulations, once finalized, will implement comprehensive franchise tax reform for corporations, banks and insurance companies, which was enacted in 2014, with subsequent technical and conforming amendments enacted in 2015 and 2016. EY Tax Alert 2023-1397 has details.
IRS announces new campaign on COGS
On August 8, 2023, the IRS Large Business & International Division (LB&I) announced a new compliance campaign focusing on taxpayers that give indications of inflating cost of goods sold to reduce taxable income. EY Tax Alert 2023-1402 has details.
EY Guides and Publications
EY updates 2023 report on US employment tax rates and limits through July 25, 2023
The 2023 edition of our US employment tax rates and limits report is now updated through July 25, 2023, to reflect changes in state paid family and medical leave insurance and state income tax rates.
EY publication highlights 2023 Q2 tax policy developments across the Americas
The second quarter of 2023 ushered in several significant tax policy developments across the Americas from April through June 2023. Highlights discussed include (i) agreement to form a Regional Tax Cooperation Platform for the LATAM Region; (ii) OECD releases 2023 report on tax transparency in Latin America; (iii) Brazil transfer pricing law enforceable beginning 1 January 2024; and (iv) US Senate approval of US - Chile tax treaty brings treaty closer to entering into force.
Tax and Finance Operate: Now. Next. Beyond. (August 23)
During this EY webcast, EY Global Compliance and Reporting practitioners will explore the current tax and finance operations landscape and share insights and results from the recently released EY survey. They will be joined by senior tax executives from Mondelez International, Inc. and UPS, who will share how their companies successfully revolutionized their tax and finance function and established a new tax operating model. They’ll also share practical approaches for industry professionals navigating global tax and finance operations.
Insights into New York’s proposed Article 9-A corporate franchise tax regulations (August 30)
On August 9, the New York State (NYS) Department of Taxation and Finance issued proposed Article 9-A corporate franchise tax reform regulations and Article 33 insurance corporation franchise tax regulations that cover a wide range of issues and may impact NYS taxpayers in various industries. The guidance is the culmination of more than eight years of drafts, redrafts and input from taxpayers, industry groups and practitioners. The proposed regulations would implement comprehensive franchise tax reform for corporations, banks and insurance companies that was enacted in 2014, with technical and conforming amendments enacted in 2015 and 2016. During this EY webcast, panelists will discuss the regulation finalization process and deadlines for submitting comments, as well as other actions taxpayers may want to consider before the proposed regulations become final.
BorderCrossings ... With EY transfer pricing and tax professionals (August 31)
During this EY webcast, Ernst & Young professionals examine the difficulties in applying transfer pricing rules to attribute profits to permanent establishments considering both US and international tax treaties. Under US tax treaties, Article 7 governs profit attribution to permanent establishments and references the arm’s-length principle under Article 9. In response to a lack of clear and consistent interpretation of profit attribution under international tax treaties, the Organisation for Economic Co-operation and Development (OECD) developed the Authorized OECD Approach (AOA).
Domestic tax quarterly webcast series: A focus on state tax matters (September 7)
During this EY webcast, Ernst & Young professionals will discuss (i) local tax issues, considerations, and pitfalls for the unwary, including local sales and use taxes in Colorado, local business taxes in California and a variety of other local taxes (e.g., bag taxes, personal property lease taxes); (ii) sales and use tax developments, including hot topics in navigating multistate compliance; (iii) latest trends in state business tax credits and incentives, including electric vehicles and battery incentives, jobs credits, investment credits.
International tax talk quarterly series with the EY Global Tax Desk Network(September 12)
Recent proposed tax changes across the globe may have significant implications for companies in the next quarter and beyond. Some of these changes are complex, so it is important that businesses understand them and try to prepare now – particularly for those that take effect in 2024. Please join our EY webcast for insights on recent developments in Australia, Brazil, Hong Kong, Mexico, Switzerland, and the United States and an analysis of how they might affect your businesses.
Recent Tax Alerts
Internal Revenue Service
— Aug 15: IRS denies tax-exempt status to organization providing pharmacy benefits (Tax Alert 2023-1408)
— Aug 14: IRS announces new campaign on COGS (Tax Alert 2023-1402)
— Aug 14: Monetized installment sales would be listed transactions under proposed regulations (Tax Alert 2023-1392)
— Aug 18: European Commission adopts final Implementing Regulation for transitional phase of CBAM (Tax Alert 2023-1422)
— Aug 18: Canada releases further revisions to EIFEL proposals (Tax Alert 2023-1421)
— Aug 18: Dominican Republic establishes special transitional treatment for audit, management and recovery of tax debt (Tax Alert 2023-1420)
— Aug 17: Japan's visa exemption for Brazilian business visitors to go into effect on 30 September 2023 (Tax Alert 2023-1414)
— Aug 17: Brazil's visa exemption for Japanese business visitors to go into effect on 30 September 2023 (Tax Alert 2023-1413)
— Aug 17: Bermuda's consideration of adopting a corporate income tax has significant implications for insurance industry (Tax Alert 2023-1412)
— Aug 16: Brazil's Complimentary Law number 199 simplifies tax obligations (Tax Alert 2023-1410)
— Aug 15: Kenya Revenue Authority notice clarifies allowances subject to Affordable Housing Levy, 2023 (Tax Alert 2023-1407)
— Aug 15: Polish Government seeks annulment of CBAM regulation in European Court of Justice (Tax Alert 2023-1405)
— Aug 15: New Zealand's Inland Revenue Department announces 2022 tax governance work results, further program expansion (Tax Alert 2023-1403)
— Aug 11: Luxembourg publishes draft legislation on implementation of the EU Minimum Tax Directive (Tax Alert 2023-1396)
— Aug 11: Canada's new Recognized Employer Pilot (REP) Program under Temporary Foreign Worker (TFW) Program discussed (Tax Alert 2023-1395)
— Aug 11: Hong Kong-Mauritius Double Taxation Avoidance Agreement enters into force in Mauritius from 23 June 2023 (Tax Alert 2023-1391)
— Aug 15: New York state law requires wage transparency effective September 17, 2023 (Tax Alert 2023-1406)
— Aug 14: New Jersey guidance outlines how new convenience of the employer rule will work and suspends possible imposition of penalties and interest for those who comply by September 15, 2023 (Tax Alert 2023-1401)
— Aug 14: Ohio Supreme Court takes new approach to statutory construction in applying a sales and use tax exemption statute to fracking activities (Tax Alert 2023-1400)
— Aug 11: FIRST IMPRESSIONS | New York's proposed regulations implementing corporate franchise tax reform from 2014 are largely the same as prior drafts and include some notable changes (Tax Alert 2023-1397)
IRS Weekly Wrap-Up
| ||TD 9979||Additional Guidance on Low-Income Communities Bonus Credit Program|
| ||2023-16||Section 1274.—Determination of Issue Price in the Case of Certain Debt Instruments Issued for Property|
| ||2023-61||Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates|
| ||2023-60||Electronic Filing Administrative Exemptions, Waivers, And Rejections; Obsoleting Notice 2010-13|
Internal Revenue Bulletin
| ||2023-34||Internal Revenue Bulletin of August 21, 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.