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31 January 2021

U.S. International Tax This Week for January 29

Ernst & Young's U.S. International Tax This Week newsletter for the week ending January 29 is now available. Prepared by Ernst & Young's International Tax Services group, this weekly update summarizes important news, cases, and other developments in international taxation.

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Spotlight

Treasury Secretary Janet Yellen was sworn into office on 26 January, the day after the Senate approved her nomination to be the first woman to hold the post. The following day, Secretary Yellen spoke with her UK and German counterparts, saying she was “committed to active U.S. participation in the ongoing OECD discussions on international taxation to forge a timely international accord,” according to a readout of the call. A Treasury statement released after one of the calls reiterated the message that Secretary Yellen plans to “re-engage actively in the ongoing OECD discussions on international taxation.“

Pascal Saint-Amans, Director of the Organisation for Economic Co-operation and Development (OECD) Centre for Tax Policy and Administration noted Yellen’s Senate Finance Committee confirmation hearing testimony last week, saying the US appears to have a “strong appetite” for the OECD Base Erosion and Profit Shifting (BEPS) 2.0 Pillar Two proposals regarding a minimum tax. During a keynote speech at the New York State Bar Association’s virtual tax conference this week, Saint-Amans said, “What we can anticipate is a much more constructive approach” from the new Biden administration with respect to the BEPS 2.0 negotiations. In regard to last year’s US proposal to implement Pillar One as a safe harbor, Saint-Amans said, “I don’t see it has any chance to prosper anytime soon.” The OECD on 21 January released updated guidance addressing the impact of the COVID-19 pandemic on tax treaty-related issues. The latest guidance revisits guidance published in April 2020 and represents the OECD Secretariat’s views on the interpretation of the provisions of tax treaties (i.e., each jurisdiction may adopt its own guidance to provide tax certainty to taxpayers). However, the guidance reflects the general approach of jurisdictions and illustrates how some jurisdictions have addressed the impact of COVID-19 on the tax situations of individuals and employers. The guidance addresses permanent establishments, the residence status of companies (based on place of effective management) and individuals, and the treatment of employment income. EY Tax Alert 2021-0189 has details.

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Upcoming Webcasts

Decoding India Union Budget 2021-22: Impact and the way forward (February 5)
On February 1, India’s Finance Minister will present the Union Budget 2021. Please join us for this webcast as Tax leadership from Ernst & Young LLP (India) and Ernst & Young LLP (US) help decode the fine print of the India Budget 2020–21.

Tax in the time of COVID-19 (February 5)
During this Thought Center Webcast, Ernst & Young professionals will discuss coronavirus (COVID-19) and the resulting economic crisis – all occurring in an election year – have made reacting to tax and trade developments more complicated and more difficult. Panelists will provide updates on: (i) Elections, US economy and tax policy; (ii) What’s happening at the IRS; and (iii) Breaking developments.

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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EY Guides and Publications

How Tax will play a vital role in the coming recovery
In this article, EY's Global Vice Chair - Tax, Kate Barton discusses how tax authorities have played a key part in the response to the global COVID-19 pandemic. According to the article, Tax has taken on an unexpected and expanded role in the world's response to the COVID-19 crisis. 

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Recent Tax Alerts

United States

Asia

Canada & Latin America

Europe

Middle East

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IRS Weekly Wrap-Up

Internal Revenue Bulletin

 2021-04Internal Revenue Bulletin of January 25, 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: 2021-0207

 

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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