December 3, 2023
U.S. International Tax This Week for December 1
Ernst & Young's U.S. International Tax This Week newsletter for the week ending December 1 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 Ways and Means Committee on 30 November unanimously approved the bipartisan United States-Taiwan Expedited Double-Tax Relief Act (H.R. 5988), under which income from US sources earned or received by qualified residents of Taiwan would be entitled to certain benefits. H.R. 5988, which would add IRC Section 894A to the Internal Revenue Code, was amended to add a new provision that would authorize the President to negotiate and enter into one or more non-self-executing tax agreements to provide for bilateral tax relief with Taiwan after a determination is made that Taiwan has provided benefits to US persons that are reciprocal to the benefits provided under IRC Section 894A. The new provision is similar to the Senate Foreign Relations Committee proposal released earlier in the year authorizing the negotiation of a tax agreement with Taiwan.
Subject to reciprocity requirements, the Ways and Means bill would reduce the general statutory 30% withholding tax on certain US-source income received by qualified residents of Taiwan.
Both Chairman Jason Smith (R-MO) and Ranking Member Richard Neal (D-MA) highlighted the bill's reciprocity requirements, under which the bill's provisions apply only if reciprocal provisions apply to US persons with respect to income sourced in Taiwan.
Chairman Smith and Ranking Member Neal made comments suggesting the bill is ready to be brought to the House floor and could receive a vote soon. The Taiwan tax issue has bipartisan support and is rooted — at least in part — by interest in boosting semiconductor chip production. The Taiwan bill is considered a candidate to be attached to a broader tax measure.
A Treasury official last week said BEPS 2.0 Pillar Two guidance is expected to be released before the end of the year. The official was quoted as saying the guidance would cover the peer review process that would verify if a jurisdiction has adopted provisions that follow the Pillar Two global anti-base erosion (GloBE) rules. The peer review process will affect the application of Pillar Two rule order and, ultimately, which jurisdictions can apply the minimum top-up tax. According to press reports, the process would verify whether a jurisdiction has adopted measures that are in line with model GLOBE rules at the center of Pillar Two.
The official said the coming OECD BEPS guidance is also expected to include anti-abuse rules that would address arbitrage under the transitional country-by-country reporting safe harbor.
Spotlight on BEPS 2.0: developments and practical implications for US MNEs (December 13)
Jurisdictions are enacting and proposing legislation implementing the Pillar Two rules developed under the Organisation for Economic Co-operation and Development/G20’s project on addressing the tax challenges of the digitization of the economy (BEPS 2.0). Global minimum tax rules are set to take effect as soon as 2024, and many multinational entities (MNEs) still have a lot to do to prepare. Join this EY Webcast for an action-oriented panel discussion, moderated by EY’s Jose Murillo, National Tax Department Leader and former US Department of the Treasury Deputy Assistant Secretary (International Tax Affairs).
Tax in a time of transition: Legislative, economic, regulatory and IRS developments (December 15)
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.
Recent Tax Alerts
— Nov 30: Kenya's enactment of new laws moves towards Universal Health Coverage (Tax Alert 2023-1968)
— Nov 27: South Africa introduces amendment to employee tax withholding requirement for non-resident employers (Tax Alert 2023-1965)
— Nov 27: Ghana issues Budget Statement and Economic Policy for the 2024 Financial Year (Tax Alert 2023-1964)
Canada & Latin America
— Dec 1: Canada's new reporting rules for digital platform operators take effect 1 January 2024 (Tax Alert 2023-1975)
— Nov 30: Canada releases Federal Fall Economic Statement 2023 (Tax Alert 2023-1969)
— Dec 1: European Commission announces €4b funding call under the EU Innovation Fund for net-zero tech innovation projects (Tax Alert 2023-1973)
— Nov 27: UK Autumn Statement 2023 discussed (Tax Alert 2023-1963)
— Nov 27: Italy | Overview of recent tax developments including BEPS Pillar Two provisions (Tax Alert 2023-1962)
— Nov 27: Sweden delays implementation of changes to EU Blue Card regulations (Tax Alert 2023-1958)
— Nov 27: Hungary's immigration bill proposes new categories of work and residence permits (Tax Alert 2023-1953)
— Nov 27: Ireland's Department of Enterprise, Trade and Employment to stop accepting applications for Stamp 4 Support Letters (Tax Alert 2023-1952)
— Nov 27: Finland closes more border crossing points with Russia; one crossing point remains open (Tax Alert 2023-1951)
— Nov 27: Switzerland to retain quotas for Croatian nationals in 2024 (Tax Alert 2023-1950)
— Nov 27: UK announces business visitor visa reform in Autumn Statement 2023 (Tax Alert 2023-1949)
— Nov 30: Kuwait joins OECD/G20 Inclusive Framework on BEPS and considers introduction of Business Profits Tax (Tax Alert 2023-1970)
— Nov 27: OECD's 2022 mutual agreement procedure statistics show US decreasing MAP case inventories, increasing time to close (Tax Alert 2023-1960)
IRS Weekly Wrap-Up
Internal Revenue Bulletin
|Internal Revenue Bulletin of November 27, 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.