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April 4, 2021
2021-0686

U.S. Tax This Week for April 2

Ernst & Young's U.S. Tax This Week newsletter for the week ending April 2 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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Top of the Week

Biden administration calls for infrastructure plan with tax increases

The White House on March 31 outlined the $2 trillion American Jobs Plan that President Biden will unveil later today in Pittsburgh, calling for investments in roads and bridges, broadband, and R&D financed with tax increases that, for the most part, were outlined during the Presidential campaign. These include raising the corporate tax rate from 21% to 28% and making major changes to the TCJA's international tax provisions. The second part of the Build Back Better plan, focused on social spending like health care, childcare, and education, is expected to be detailed in the coming weeks, and will include additional tax proposals, White House Press Secretary Jen Psaki said on MSNBC this morning. EY Tax Alert 2021-9005 has details.

IRS extends more tax deadlines for individuals, clarifies earlier announcement

In Notice 2021-21 (released March 29), the IRS automatically extended until May 17, 2021, certain deadlines for individual taxpayers. Earlier in March the IRS announced the automatic extension until May 17, 2021, for individuals to file Form 1040 and pay federal income taxes without penalties or interest for the 2020 tax year (see Tax Alert 2021-0586). In that announcement, the IRS said it would issue formal guidance. EY Tax Alert 2021-0671 has details.

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EY Guides, Surveys, and Reports

TTC/EY Business Tax Policy Barometer for the business community’s views on tax policy and reform

The Tax Council (TTC) and Ernst & Young LLP's Business Tax Policy Barometer, attached below, provides insights on the business community's perceptions on business tax reform (US federal and global) as well as other key policy issues. Results from the barometer show that economic recovery remains a top concern for the business community. Respondents also overwhelmingly expect to see a US corporate tax increase either this year or next. Scroll through the content to learn what respondents are thinking about issues such as COVID-19 recovery, the Biden tax proposals, impact of certain provisions in the Tax Cuts and Jobs Act of 2017 (TCJA), US and global developments that impact multinationals, climate change and carbon pricing.

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Upcoming Webcasts

Why the tax controversy department of the future should be built now (April 8)
During this Thought Center Webcast, Ernst & Young professionals will discuss concerns about the efficacy of untested dispute resolution processes related to potential new ways to tax cross-border activity may add to future risks.

The new income recognition landscape series: Optional methods limiting acceleration of income (April 13)
During this Thought Center Webcast, Ernst & Young professionals will explore the final regulations provisions to limit applicable financial statement (AFS) income acceleration. The final regulations will require taxpayers to have a detailed understanding of their specific facts to determine if, and how, the rules apply to them.

India - Attracting foreign investment through trade, incentive and tax policy measures (April 15)
With its large consumer market, infrastructure investments and highly skilled labor force, India has historically attracted significant foreign investment. Ongoing global geopolitical trends and trade policies may accentuate opportunities for investment. India has also recently adopted significant policy measures to encourage economic activity. During this Thought Center Webcast, Ernst & Young professionals will analyze the impact of these recent developments.

ASEAN-6 panel discussions: Integrated regional value chains – Part 1: Consumer products and medical technology (April 20)
During this EY Webcast, Ernst & Young professionals will be hosting sector-focused discussions to explore answers to many open questions. Guest panelists from government investment agencies in key ASEAN countries will be sharing insights on individual country strengths and how complementary segments of a value chain can be optimized across multiple ASEAN locations.

ASEAN-6 panel discussions: Integrated regional value chains – Part 2: Electronics and automotive (April 27)
During this EY Webcast, guest panelists from government investment agencies in key ASEAN countries will be sharing insights on individual country strengths and how complementary segments of a value chain can be optimized across multiple ASEAN locations.

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Recent Tax Alerts

Courts

— Mar 26: Divided Ninth Circuit reverses and remands, holding non-willful penalty for late but accurate FBAR filing does not apply to each taxpayer account (Tax Alert 2021-0622)

Internal Revenue Service

— Apr 01: EY publication highlights accounting implications of 2021 Q1 income tax developments (Tax Alert 2021-0684)

— Mar 30: IRS issues FAQs on how students and higher education institutions should report COVID-19-related emergency financial aid grants (Tax Alert 2021-0673)

— Mar 30: IRS extends more tax deadlines for individuals, clarifies earlier announcement (Tax Alert 2021-0671)

— Mar 26: Payments for PPE to battle COVID-19 may be made or reimbursed without being included in income (Tax Alert 2021-0645)

— Mar 26: IRS automatically extends empowerment zone designations through 2025 (Tax Alert 2021-0643)

— Mar 26: IRS issues guidance for mortgage bond issuers to use in computing IRC Section 143(f) income requirements (Tax Alert 2021-0625)

International

— Apr 01: Argentina federal tax authorities issue regulations on the procedure for registering for promotional regime for knowledge-based economy (Tax Alert 2021-0683)

— Apr 01: German Ministry of Finance publishes final MDR guidance (Tax Alert 2021-0682)

— Apr 01: EY Canada's Tax Matters @ EY for April 2021 (Tax Alert 2021-0680)

— Apr 01: Philippines enacts law reducing corporate income tax rates and rationalizing fiscal incentives (Tax Alert 2021-0679)

— Apr 01: The Netherlands starts consultation to better align legal entity and partnership classification rules with international tax standards (Tax Alert 2021-0677)

— Mar 31: Spanish Tax Authority further delays first reporting and payment of Financial Transaction Tax (Tax Alert 2021-0674)

— Mar 30: Japan enacts 2021 tax reform bill (Tax Alert 2021-0670)

— Mar 30: ECJ rules Polish VAT law on intra-Community acquisitions is contrary to EU VAT Directive and may result in refund of unduly paid interest (Tax Alert 2021-0669)

— Mar 30: Saudi Arabia publishes special tax rules for Integrated Logistics Bonded Zone (Tax Alert 2021-0663)

— Mar 30: Qatar extends 2020 tax filing deadlines (Tax Alert 2021-0662)

— Mar 29: USTR proposes 25% punitive tariff on Austrian, Indian, Italian, Spanish, Turkish and UK origin goods in response to each country's DST; terminates investigations for Brazil, Czech Republic, EU and Indonesia (Tax Alert 2021-0661)

— Mar 29: Argentine Province of Buenos Aires issued regulations on turnover tax withholdings for nonresidents (Tax Alert 2021-0659)

— Mar 29: Belgian Court of Appeal issues decisions on tax abuse – application of the CJEU Danish cases (Tax Alert 2021-0655)

— Mar 29: OECD Forum on Tax Administration publishes jurisdictions currently participating in the International Compliance Assurance Programme (ICAP) (Tax Alert 2021-0654)

— Mar 26: Dutch Government releases legislative proposal introducing withholding tax on dividend payments to low-taxed jurisdictions, hybrid entities or in certain abusive situations as of 2024 (Tax Alert 2021-0649)

— Mar 26: Polish Minister of Finance signs decree deferring deadline for settlement of 2020 CIT liability and filing of 2020 final CIT returns (Tax Alert 2021-0648)

— Mar 26: Canada Revenue Agency outlines potential changes to RSU sourcing methodology (Tax Alert 2021-0642)

— Mar 26: Nova Scotia budget 2021-22 discussed (Tax Alert 2021-0641)

— Mar 26: German Government agrees on draft ATAD implementation law (Tax Alert 2021-0640)

— Mar 26: Québec budget 2021-22 discussed (Tax Alert 2021-0638)

— Mar 26: Cyprus Tax Tribunal rules card payment systems services are VAT exempt (Tax Alert 2021-0635)

— Mar 26: German Government agrees on draft bill introducing “check-the-box” elections for partnerships and further changes (Tax Alert 2021-0629)

— Mar 26: Luxembourg | Protocol to Double Tax Treaty with Russia has entered into force (Tax Alert 2021-0626)

— Mar 26: Spanish Supreme Court issues favorable decisions on reclaims by non-Spanish sovereign funds (Tax Alert 2021-0624)

Legislation

— Apr 01: What to expect in Washington (April 1) (Tax Alert 2021-0681)

— Mar 26: Ways and Means Subcommittee hearing on examining private equity's role in US health care system (Tax Alert 2021-0646)

— Mar 26: Senate Budget Committee examines what Sanders calls 'Rigged Tax Code' for corporations and wealthy individuals (Tax Alert 2021-0637)

— Mar 26: HELP Committee hearing on improving health equity and outcomes by addressing health disparities (Tax Alert 2021-0636)

— Mar 26: Senate Finance Committee discusses possible changes to international tax policy (Tax Alert 2021-0630)

States

— Apr 01: State corporate income and franchise tax developments in the first quarter of 2021 (Tax Alert 2021-0685)

— Mar 31: Oregon imposes new local income taxes for Portland Metro and Multnomah County (Tax Alert 2021-0678)

— Mar 30: Ohio legislature approves IRC conformity update, CAT exclusions, reduction in withholding tax rate for pass-through entities; introduces CAT repeal proposal (Tax Alert 2021-0672)

— Mar 30: Most states extend their individual income tax filing and payment deadlines to May 17, 2021 (Tax Alert 2021-0668)

— Mar 29: Connecticut Department of Revenue Services issues FAQs about remote worker 2020 income tax and nexus relief due to COVID-19 (Tax Alert 2021-0664)

— Mar 26: Puerto Rico's Treasury Department extends due date for filing income tax returns to May 17, 2021 (Tax Alert 2021-0650)

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Recent Newsletters

State and Local Tax Weekly
   Highlights of this edition include:

— Many states follow extensions of federal individual income filing and payment deadlines. A number of states will follow the extensions of the federal individual income tax return filing and payment deadlines.

— Income/Franchise, Sales & Use, Business Incentives, Property Tax, Controversy, Miscellaneous Tax, Value Added Tax, Upcoming Webcasts

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IRS Weekly Wrap-Up

Corrections

 TD 9944Credit for Carbon Oxide Sequestration; Correction

Announcements

 2021-06Announcement and Report Concerning Advance Pricing Agreements
 2021-07Amounts Paid for Certain Personal Protective Equipment Treated as Medical Expenses

Notices

 2021-21Relief for form 1040 filers affected by ongoing coronavirus Disease 2019 pandemic
 2021-22Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates

Internal Revenue Bulletin

 2021-13Internal Revenue Bulletin of March 29, 2021

Because the matters covered herein are complicated, U.S. 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.

 

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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