February 28, 2021
U.S. International Tax This Week for February 26
Ernst & Young's U.S. International Tax This Week newsletter for the week ending February 26 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.
The House of Representatives on 26 February is expected to vote to approve President Biden’s $1.9 trillion COVID relief plan. The “American Rescue Plan” will then go to the Senate for consideration where the legislation is expected to be amended and passage likely will require the support of all 50 Democrats, with Vice President Kamala Harris providing the tie-breaking vote.
Among other things, the package would provide direct payments, child tax credit expansion, earned income tax credit and child care tax credit enhancements, as well as an international tax change that would repeal the election for US affiliated groups to allocate interest expense on a worldwide basis beginning in 2021. IRC Section 864(f) was added to the tax code in 2004 but the provision had been deferred several times. Repeal of the worldwide interest allocation rules would raise roughly $22 billion over 10 years, according to a Joint Committee on Taxation estimate.
The Senate Finance Committee this week held a confirmation hearing on the nomination of Adewale O. Adeyemo to be Treasury Deputy Secretary, during which he and committee members expressed a shared interest in working with the Organisation for Economic Co-operation and Development (OECD) on a multilateral approach to global taxation. Asked about the OECD multilateral discussions on Base Erosion and Profit Shifting (BEPS) 2.0 and digital services taxes, Adeyemo said the goal will be to protect US tax revenue and ensure that companies compete on a level playing field. The nominee echoed earlier statements by Treasury Secretary Janet Yellen that the Administration is ready to resume BEPS 2.0 discussions.
Work from anywhere | How to manage implications of workforce transformation (March 4)
During this Webcast, Ernst & Young professionals will discuss the latest developments, share market insights, and break down pertinent issues to consider in managing the challenges and embracing the opportunities of a “work from anywhere” approach..
Tax in the time of COVID-19: Update on legislative, economic, regulatory and IRS (March 5)
During this Thought Center Webcast, Ernst & Young professionals will provide updates on: (i) US economy, elections and tax policy; (ii) Breaking developments; and (iii) What’s happening at the IRS.
Latin America ‘nearshoring’ webcast series | Costa Rica session (March 16)
Recent disruptions to global supply chains have heightened interest in the concept of “nearshoring” (i.e., the transferring of a business operation to a nearby country from a more distant one). To provide information and help answer questions about nearshoring in Latin America, EY is sponsoring a series of webcasts featuring our local country professionals. This Thought Center Webcast will focus on Costa Rica.
Recent Tax Alerts
— Feb 25: South Africa's Minister of Finance delivers 2021 Budget Review (Tax Alert 2021-0431)
— Feb 19: High court of Kenya rules that transportation services for goods in transit are subject to VAT and input tax incurred in making exempt supplies is non-deductible (Tax Alert 2021-0392)
— Feb 12: New special measures to support Hong Kong residents to settle and remain in Canada discussed (Tax Alert 2021-0340)
— Feb 11: Singapore MOM refines features of intra-corporate transferee for purposes of job-advertisement exemption (Tax Alert 2021-0327)
Canada & Latin America
— Feb 26: Alberta budget 2021-22 discussed (Tax Alert 2021-0433)
— Feb 25: Peru establishes gains from the indirect transfer of Peruvian shares will be taxed only in Chile under the Peru-Chile DTT (Tax Alert 2021-0430)
— Feb 25: Uruguayan Government modifies rules applicable to goodwill in corporate restructurings for a second time (Tax Alert 2021-0426)
— Feb 25: Argentina-Qatar tax treaty enters into force (Tax Alert 2021-0425)
— Feb 23: Nunavut budget 2021-22 discussed (Tax Alert 2021-0410)
— Feb 22: Argentina issues regulations for companies applying for promotional regime for knowledge-based economy (Tax Alert 2021-0401)
— Feb 19: Costa Rica's President and the Ministry of Finance published "guidelines for the implementation of treaty provisions and agreements for the importation of goods" (Tax Alert 2021-0397)
— Feb 19: Costa Rica's Executive Branch may extend period goods may stay in a tax warehouse (Tax Alert 2021-0396)
— Feb 17: Canada confirms hotel quarantine measures and airport and land border testing (Tax Alert 2021-0367)
— Feb 25: Luxembourg Tax Authorities update MDR guidance (Tax Alert 2021-0432)
— Feb 24: Russia | Requirements for 2020 annual tax reports of foreign companies operating in Moscow (Tax Alert 2021-0421)
— Feb 24: OECD Forum on Tax Administration releases new handbook for International Compliance Assurance Programme (ICAP) (Tax Alert 2021-0420)
— Feb 24: EU Member States adopt revised list of non-cooperative jurisdictions for tax purposes (Tax Alert 2021-0419)
— Feb 19: Future social security healthcare reciprocation between the UK and EU discussed (Tax Alert 2021-0391)
— Feb 11: Future social security coordination between the UK/EU, EEA and EFTA countries discussed (Tax Alert 2021-0326)
IRS Weekly Wrap-Up
Internal Revenue Bulletin
| ||2021-09||Internal Revenue Bulletin of March 1, 2021|
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.