[World Tax News] US Releases Draft Form for Digital Asset Reporting and More

World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week.

1. US releases draft form for digital asset reporting

On April 19, 2024, the US Internal Revenue Service (IRS) unveiled draft Form 1099-DA, titled “Digital Asset Proceeds From Broker Transactions.” This form is designated for digital asset brokers to report the proceeds and basis (if applicable) for dispositions of digital assets. Furthermore, brokers are obligated to disclose instances where they are aware, or have reasonable grounds to believe, that a corporation in which the payee holds a digital asset, which also qualifies as stock, has undergone a reportable change in control or capital structure.

The form instructs recipients of Form 1099-DA to mark the “Yes” box adjacent to the query on page 1 of Form 1040, which inquires:

“At any time during 2023, did you:

(a) receive (as a reward, award, or payment for property or services); or

(b) sell, exchange, or otherwise dispose of a digital asset (or a financial interest in a digital asset)?”

Comprising 33 boxes, some segmented into multiple parts (e.g., boxes 1a-1i), along with accompanying instructions for the form recipient, the draft additionally allows the filer to specify the account number (or similar identifying information) of the payee with the broker and a CUSIP number (or equivalent identifier) of the digital asset disposed. Moreover, the form allows the filer to differentiate whether any gains are short-term or long-term.

Finally, the broker is required to identify its classification as a digital asset broker, choosing from options such as Kiosk Operator, Digital Asset Payment Processor, Hosted Wallet Provider, Unhosted Wallet Provider, or Other digital asset filers.

Source: The draft of Form 1099-DA

2. Ireland releases Bilateral Advance Pricing Agreement Guidelines

On April 26, the Ireland Revenue issued an eBrief and updated the Bilateral Advance Pricing Agreement Guidelines. The updated Guidelines consider international best practices in relation to bilateral Advance Pricing Agreements (APA) as identified by the OECD.

The main changes relate to the following:

• Including prospective years in an APA term in situations where most of the years proposed to be covered by an APA have passed by the time an agreement is reached between the competent authorities.
• The position is to be adopted by a taxpayer in corporation tax returns filed in the period from when an APA application is submitted to revenue until the APA is concluded.
• Electronic submission of APA applications.
• Timeframe for revenue to decide on the acceptance of an APA application into the APA programme.
• Annual reporting requirements.
• Timeframe for a taxpayer to notify revenue in situations where it ceases to apply the terms of an APA.
• Amendment by a taxpayer, where necessary, of previously filed tax returns following the revision, revocation or cancellation of an APA.
• Relationship between transfer pricing audit and the APA process.

Source: Revenue eBrief No. 127/24

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