Report on recent US international tax developments — 5 April 2024

Congress returns to Washington next week from its two-week spring recess. It is still uncertain whether — or when — there will be Senate consideration of the Tax Relief for American Families and Workers Act (H.R. 7024) business tax and Child Tax Credit (CTC) expansion bill, which passed the House on 31 January and has remained in limbo since then. There was no reported movement on the bill over the two-week recess.

The IRS Advance Pricing and Mutual Agreement Program (APMA) issued the 25th annual Advance Pricing Agreement (APA) report (the Report) on 30 March in Announcement 2024-16 (pdf). The Report discusses the APMA, including its activities and structure for calendar year 2023 and gives useful insights into its operation. According to the Report, the total number of APAs executed increased significantly from 77 to 156 and the median amount of time to finalize an APA decreased from 43.4 months in 2022 to 42 months in 2023. However, the number of APA filings slightly decreased in 2023, with taxpayers filing 167 APA requests (down from 183 in 2022). At year-end, 558 APA requests were pending (480 bilateral, 34 multilateral and 44 unilateral), down slightly from 2022. A Global Tax Alert provides details on the Report.

It is worth noting that the APMA has reportedly been working to update Revenue Procedure 2015-41 (and its MAP corollary Revenue Procedure 2015-40). The APMA has not indicated that there will be a comment period or a flexible implementation period. As a result, taxpayers considering an APA may want to submit their request before new guidance is issued.

The OECD did not meet the self-imposed BEPS Pillar One deadline to finalize the text of the multilateral convention (MLC) on Amount A by the end of March 2024. According to a recent report, negotiations regarding the global tax treaty are ongoing. An OECD official was quoted this week as saying that treaty talks "continue to move forward constructively." The plan has been for the OECD to hold a treaty signing ceremony by the end of June 2024.

Contact Information

For additional information concerning this Alert, please contact:

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.