February 15, 2023
Global Tax Policy and Controversy Watch | February 2023 edition
In the spotlight
On 2 February 2023, the Organisation for Economic Co-operation and Development (OECD) released Administrative Guidance on the Pillar Two Global Anti-Base Erosion (GloBE) Rules. The guidance provides significant additional information relevant to the interpretation and operation of the Pillar Two rules, making it an essential component of the global minimum tax package. The guidance covers a range of technical issues in the following areas: (i) scope; (ii) income & taxes; (iii) application of GloBE Rules to insurance companies; (iv) transition; and (v) Qualified Domestic Minimum Top-up Taxes.
See Global Tax Alert, OECD/G20 Inclusive Framework releases Administrative Guidance under Pillar Two GloBE Rules: Detailed Review, dated 9 February 2023.
European Commission publishes Green Deal Industrial Plan
The European Commission presented its proposal for a “Green Deal Industrial Plan for the Net-Zero Age” on 1 February 2023. The plan is designed to support scaling up of net-zero manufacturing capacities and products to help meet the European Union’s (EU) climate neutrality goals while also maintaining EU competitiveness. Areas covered by the plan include simplification of the regulatory environment, funding, skills, and trade.
See Global Tax Alert, European Commission publishes proposal for a “Green Deal Industrial Plan for the Net-Zero Age,” dated 7 February 2023.
EU importers face customs valuation uncertainty and risk
Traders importing goods into the EU are facing increased scrutiny around customs valuation. One hot topic is the interplay of transfer pricing adjustments and customs valuation for related party transactions.
See the latest Global Tax Controversy monthly flash news article, EU importers face customs valuation uncertainty and risk, dated 17 January 2023.
Join us on 7 March for our webcast “The outlook for global tax policy and controversy in 2023.” EY tax policy and controversy leaders will provide their insights on significant tax trends, highlighting leading practices for organizations as they navigate tax developments around the world. Register here.
EY makes global comment submissions on BEPS 2.0 consultation documents
EY recently made global comment submissions in response to consultation documents released by the OECD in December 2022 on Pillars One and Two. The comment submissions are linked below:
Updates to lists of non-cooperating jurisdictions for tax purposes
Argentina issued a final list while Spain released a draft list for public comment.
See Global Tax Alerts, Argentine Government updates list of non-cooperating jurisdictions for income tax, dated 1 February 2023 and Spain issues draft List of Non-Cooperative Jurisdictions for Tax Purposes, dated 24 January 2023.
France has implemented two mechanisms to address high energy prices – a temporary solidarity contribution and a cap on market revenues.
See Global Tax Alert, France implements measures to address high energy prices, dated 17 January 2023.
The United States (US) Internal Revenue Service (IRS) released interim guidance addressing some issues related to the application of the new US corporate alternative minimum tax, which was enacted under the Inflation Reduction Act of 2022 and is effective beginning in 2023. Taxpayers may rely on the interim guidance pending the release of proposed regulations, which are anticipated to apply for tax years beginning after 31 December 2022.
See Global Tax Alert, US IRS releases interim guidance on 15% corporate alternative minimum tax, dated 13 January 2023.
The Brazilian Government announced new tax recovery measures, which include: (1) allowing voluntary disclosures and the payment of debts without penalties; (2) limiting appeals to the administrative court to cases involving a specified amount; and (3) new tax settlement rules.
See Global Tax Alert, Brazil announces tax recovery measures, dated 19 January 2023.
Amendments were enacted with respect to the Electronic Transfer Levy Act, the Revenue Administration Act and the Value Added Tax.
See Global Tax Alert, Ghana enacts various amendments to tax laws introduced in the 2023 Budget Statement, dated 13 January 2023.
The tax proposals in the Budget include the extension of certain deadlines related to tax holiday benefits, rationalization of some withholding tax provisions, measures for ease of compliance activities, changes in the taxation of nonresidents, and changes in the treatment of capital gains.
See Global Tax Alert, India releases Union Budget 2023, dated 3 February 2023.
Key tax measures include a reform of corporate tax rates, introduction of an investment incentive, changes to withholding taxes, and amendments to the tax regime for real estate investment funds.
See Global Tax Alert, Morocco enacts Finance Law 2023 | A review of key tax measures, dated 25 January 2023.
On 24 January 2023, the Dutch State Secretary of Finance published a Decree clarifying a provision relating to situations involving a valuation difference between jurisdictions with respect to certain capital transactions such as contributions or distributions.
See Global Tax Alert, The Netherlands issues favorable Decree clarifying application of transfer pricing anti-mismatch rules for asset transfers to Dutch corporate taxpayer through contributions and distributions, dated 24 January 2023.
Effective 1 January 2023, the benefit from employee stock option plans is taxed on the date that the shares received on exercise of the stock options become tradeable. However, employees may choose to be taxed on the date the option is exercised instead.
See Global Tax Alert, The Netherlands | New legislation applicable from 1 January 2023 regarding the taxation of employee stock option benefits, dated 11 January 2023.
A tax expert committee submitted its report to the Norwegian Government recommending changes to the Norwegian tax system, including expanding the income inclusion rule under the participation exemption regime to cover capital gains and increasing the rate from 3% to 5%, broadening the scope of withholding taxes, and abolishing the tonnage tax regime.
See Global Tax Alert, Norway | Expert committee propose changes to Norwegian tax system, dated 12 January 2023.
Peru increased the deduction rates for scientific research, technological development, and technological innovation expenses . The new rules are effective from 1 January 2023 to 31 December 2025.
See Global Tax Alert, Peru enacts new rules for tax incentives of expenses related to research and development, dated 18 January 2023.
For additional information with respect to this Alert, please contact the following: