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24 January 2021

U.S. International Tax This Week for January 22

Ernst & Young's U.S. Tax This Week newsletter for the week ending January 22 is now available. Prepared by Ernst & Young's National Tax Department in Washington, D.C., this weekly update summarizes important news, cases, and other developments in U.S. taxation.

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Spotlight

Joe Biden was inaugurated as the 46th President of the United States on 20 January, and with Vice President Kamala Harris holding the tiebreaking vote, the Senate is now split 50-50 Democrats to Republicans. Against the backdrop of this new political landscape, Treasury Secretary-designate Janet Yellen on 19 January testified at her Senate Finance Committee confirmation hearing, confirming that the incoming Administration plans to delay tax increases for now due to the coronavirus pandemic.

Yellen noted that Biden had said that eventually, as part of a larger package with spending and investment proposals, the President would want to repeal parts of the 2017 tax cuts that benefited the wealthy and large companies, and reverse incentives for companies to offshore operations and profits. However, Biden has been clear that he does not want to completely repeal the Tax Cuts and Jobs Act. She said a provision in that law had the byproduct of rewarding corporations for moving operations offshore.

Yellen also said the US will work with other countries in negotiations to stop a "race to the bottom" on corporate taxation and, within that process, ensure competitiveness of American corporations. She affirmed that it is important for US companies to be globally competitive and said the Organisation for Economic Co-operation and Development (OECD) negotiations are important for that reason. In response to a written question regarding the current OECD BEPS 2.0 negotiations that was posed to the Treasury Secretary-designate by a member of the Senate Finance Committee following her testimony, Yellen wrote: "the Administration will vigorously reengage with multilateral efforts to update global tax rules in ways that establish minimum taxation, prevent profit-shifting, and support a level playing field." She added that if confirmed, she would ensure that Treasury "immediately and vigorously engages with the international tax negotiations at the OECD."

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Upcoming Webcasts

BorderCrossings ... With EY transfer pricing and tax professionals (January 28)
During this Thought Center Webcast, Ernst & Young LLP (US) and Ernst & Young LLP (India) transfer pricing professionals who have been involved in the US-India competent authority negotiations over the past several years will provide an update on the overall US-India tax authority relationship. They’ll also discuss results of the 2020 meetings between the two governments.

International tax talk quarterly series with the EY Global Tax Desk Network (February 9)
During this Thought Center Webcast, Ernst & Young professionals will discuss the most pertinent recent global tax developments affecting your business. Panelists will include representatives from our EY Global Desks and Global Tax Policy and will cover perspectives from the OECD, European Union, Latin America and Asia Pacific.

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Recent Tax Alerts

United States

Africa

Asia

Canada & Latin America

Europe

Multinational

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IRS Weekly Wrap-Up

Internal Revenue Bulletin

 2021-03Internal Revenue Bulletin of January 19, 2021

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Additional Resources

Ernst & Young Client Portal, the leading source for news, analysis, and reference materials for corporate tax professionals, has a variety of content of interest to international tax practitioners, including:

— International Tax Online Reference Service. Key information about, and important tax developments from, 56 foreign jurisdictions, including information on tax rates, interest rates and penalties, withholding, and filing dates.

— EY/Passport. EY/Passport is your guide to planning ventures in the global economy, offering a wealth of tax and business knowledge on more than 150 countries.

Because the matters covered herein are complicated, U.S. International Tax This Week should not be regarded as offering a complete explanation and should not be used for making decisions. Any decision concerning matters covered herein should be reviewed with a qualified tax advisor.

Document ID: 2021-0156

 

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.

 

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