Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

June 23, 2023

Report on recent US international tax developments 23 June 2023

The US Senate on 22 June gave its advice and consent to the 2010 US-Chile Income Tax Treaty in a 95-2 vote. Once the Treaty enters into force, the withholding provisions would become effective for amounts paid or credited on or after the first day of the second month following the date of entry into force. For all other taxes, the provisions will take effect for tax periods beginning on or after the first day of January following the date the treaty enters into force. The Treaty includes two reservations and two declarations; the reservations concern the Base Erosion and Anti-abuse Tax (BEAT) and Article 23 (Relief from Double Taxation). The government of Chile undertook all the steps necessary to approve the Treaty in 2015. It is anticipated that the reservations added since then would need to be reviewed and ratified by Chile's Senate so the Treaty could take effect in Chile. A Global Tax Alert is pending.

Congressional Republicans this week released a Joint Committee on Taxation (JCT) analysis of five possible scenarios regarding adoption of the OECD Pillar Two global minimum tax by the US and globally. The JCT report concludes that depending on the scenario — the US adopts and/or the rest of the world adopts Pillar Two with various combinations — the US could lose as much $120 billion in revenue over 10 years (if the US does not adopt Pillar Two, but the rest of the world adopts) or gain $236 billion over the period (in the unlikely situation the US adopts Pillar Two in 2025, but the rest of the world does not adopt). A WCEY Alert provides details.

Significant developments are anticipated in the next few weeks on both BEPS Pillar One and Pillar Two. While a multilateral convention to implement Pillar One is targeted for finalization by July 2023, it is not clear whether policy makers will solve all outstanding technical and political issues in the time that remains. In any case, the Inclusive Framework will meet shortly before the G20 Finance Ministers meet in Gandhinagar on 14-15 July. This is expected to be a key meeting to reach an important milestone in the Pillar One project.

The meeting may also be an opportunity to formalize agreement on a number of outstanding issues and workstreams in relation to Pillar Two. For example, the Inclusive Framework members have been negotiating for some time on the method and criteria for Pillar Two peer reviews. Additional administrative guidance for Pillar Two is also expected.

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

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

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


The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


Copyright © 2024, Ernst & Young LLP.


All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.


Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.


"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.


Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or Please refer to the privacy notice/policy on these sites for more information.

Yes, I accept         Find out more