March 7, 2021
2021-0489 U.S. International Tax This Week for March 5 Ernst & Young's U.S. Tax This Week newsletter for the week ending March 5 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. —————————————————————————
Spotlight The Senate on 4 March voted to proceed to consideration of the budget reconciliation bill (H.R. 1319) reflecting President Biden's $1.9 trillion "American Rescue Plan" COVID-19 relief package. Following the vote, Senate Majority Leader Chuck Schumer offered a substitute amendment that included a number of changes to the House legislation. The bill, however, continues to include repeal of the IRC Section 864(f) worldwide interest expense allocation election. If, as expected, the Senate approves the COVID-19 relief package with changes from the House bill, a conference process to resolve differences may be necessary or, at the very least, another House vote will be required. Treasury Secretary Janet Yellen on 26 February said during a virtual G20 finance ministers and central bank governors meeting that the US would no longer push for Pillar One of the Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) 2.0 project to be implemented on a safe harbor basis. Trump Administration Treasury Secretary Steven Mnuchin had insisted that Pillar One, addressing the allocation of multinational enterprise profits to market jurisdictions, be structured as a safe harbor. That position was generally opposed by US trading partners involved in the discussions. Taking the US safe harbor proposal off the table is expected to be viewed as a major step forward in the global discussions. But negotiations will still require considerable work. Speaking during an OECD webcast on 4 March, Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration, was quoted as saying that with the new US position, the goal is for the Inclusive Framework on BEPS to meet in late June or early July to reach a consensus agreement on Pillar One and Pillar Two. If agreement is reached, it will be presented at the G20 finance ministers meeting on 9-10 July. Saint-Amans indicated he does not expect any further Pillar discussion drafts. The Treasury Department on 2 March announced that Jose Murillo had accepted the position of Deputy Assistant Secretary for International Tax Affairs in the Office of Tax Policy. Most recently, Murillo was the Director of the International Tax and Transaction Services practice in EY's National Tax Department in Washington, DC. |
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Upcoming Webcasts 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 United States — Feb 26: Presidential proclamation rescinds suspension of entry of certain immigrant visa holders to the US (Tax Alert 2021-0443) Asia — Mar 03: Singapore updates guidance on tax residence status and determination of a permanent establishment due to COVID-19 (Tax Alert 2021-0473) — Mar 01: Philippines provides guidelines and procedures for transfer pricing reporting (Tax Alert 2021-0462) — Mar 01: Hong Kong's 2021/22 Budget proposal discussed (Tax Alert 2021-0457) Canada & Latin America — Mar 04: Canada's International Experience Canada programs now open for 2021 (Tax Alert 2021-0485) — Mar 04: EY Canada's Tax Matters @ EY for March 2021 (Tax Alert 2021-0484) — Mar 03: British Columbia's expanded Provincial Sales Tax registration requirements to take effect on April 1 (Tax Alert 2021-0472) — Mar 01: Panama remains on EU list of non-cooperative jurisdictions with no immediate consequences (Tax Alert 2021-0456) — Feb 26: Alberta budget 2021-22 discussed (Tax Alert 2021-0433) Europe — Mar 03: UK Budget 2021 discussed (Tax Alert 2021-0478) — Mar 03: UK issues 2021 Budget | Initial highlights (Tax Alert 2021-0476) — Mar 03: Irish Revenue issues guidance on transfer pricing legislation (Tax Alert 2021-0474) — Feb 26: EU negotiations on public CbCR move forward as majority of Member States back proposal (Tax Alert 2021-0446) — Feb 26: Cyprus announces non-application of administrative fines for DAC6 submissions up until 30 June 2021 (Tax Alert 2021-0445) — Feb 26: Portugal publishes MDR guidance and reporting form (Tax Alert 2021-0444) Multinational — Mar 03: OECD releases Kazakhstan Stage 1 peer review report on implementation of Action 14 minimum standard (Tax Alert 2021-0475) — Mar 01: OECD releases Bahrain Stage 1 peer review report on implementation of Action 14 minimum standard (Tax Alert 2021-0461) — Feb 26: OECD releases new transparency framework for Action 5 for 2021 through 2025 (Tax Alert 2021-0447) —————————————————————————
Recent Newsletters ITS/Washington Dispatch
Highlights of this edition include: Legislation - Congress poised to enact $1.9t COVID-relief bill with repeal of worldwide interest expense allocation — but what's next?
Transfer pricing news - Treasury to consider reviving expired transfer pricing aggregation regulations
- IRS continues APA/MAP case closures despite COVID restrictions
OECD developments - OECD Forum on Tax Administration releases new handbook for International Compliance Assurance Programme (ICAP)
- OECD holds public consultation on review of minimum standard on dispute resolution under BEPS Action 14
- OECD releases 10th batch of peer review reports on BEPS Action 14 related to improving dispute resolution
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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. | 
