Report on recent US international tax developments - 17 November 2023

The US House and Senate this week approved a two-step continuing resolution to extend federal government funding, beyond the 17 November deadline to avert a government shutdown. Under the plan, certain appropriations bills would be extended through 19 January 2024, and the remainder of appropriations through 2 February. President Biden signed the bill into law late on 16 November.

IRS and Treasury officials this week confirmed that the government is expected to release both corporate alternative minimum tax guidance and stock buyback excise tax guidance before the end of 2023. The coming guidance is considered "high priority" and reportedly will be extensive.

The government now expects proposed previously taxed earnings and profits (PTEP) regulations to be released in the first half of 2024, according to an IRS official. An official earlier this fall said PTEP regulations would be issued in early 2024. The initial proposed regulations — which will be released in tranches — reportedly will cover shareholder- and foreign corporation-level accounting rules, Section 961(c) basis, currency gain or loss and issues related to controlled foreign corporations that are owned through a partnership or that involve split-ownership structures.

The Chilean Congress has approved the new 2010 US-Chile income tax treaty with US reservations. The proposed treaty next must be ratified by the Chilean President, which is expected to occur soon. For the treaty to enter into force, the United States and Chile must notify each other, in writing, through diplomatic channels, that their respective applicable procedures for ratification have been satisfied.

A Treasury official this week was quoted as saying that the US is proposing a new timeline for the signing deadline for the BEPS 2.0 Multilateral Convention to Implement Amount A of Pillar One (pdf) (MLC). The OECD released the text in October. The MLC would update the global international tax framework to "coordinate a reallocation of taxing rights to market jurisdictions, improve tax certainty, and remove digital services taxes." The Treasury official also reportedly reiterated that it was important that countries not impose any new digital services taxes.

And the OECD on 10 November announced that 48 countries and jurisdictions, including the United States, have pledged to implement the OECD Crypto-Asset Reporting Framework (CARF) by 2027. CARF provides for the automatic exchange of tax information on crypto-assets.

For additional information with respect to this Alert, please contact the following:

Ernst & Young LLP (United States), International Tax and Transaction Services, Washington, DC
 

• Arlene Fitzpatrick
  
  
• Joshua Ruland

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.