April 11, 2021
U.S. Tax This Week for April 9
Ernst & Young's U.S. Tax This Week newsletter for the week ending April 9 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.
Top of the Week
Treasury releases President's plan to overhaul corporate tax system
On April 7, the Treasury Department released President Biden's "Made in America Tax Plan. "According to the report, the plan's goal "is to make American companies and workers more competitive by eliminating incentives to offshore investment, substantially reducing profit shifting, countering tax competition on corporate rates, and providing tax preferences for clean energy production. Importantly, this tax plan would generate new funding to pay for a sustained increase in investments in infrastructure, research, and support for manufacturing, fully paying for the investments in the American Jobs Plan over a 15-year period and continuing to generate revenue on a permanent basis." EY Tax Alert 2021-0722 has details.
New York State budget agreement reached, includes income tax increases for businesses and individuals, new tax on pass-through entities
On April 7, the New York State (NYS) Assembly passed the revenue legislation part of the FY 2021-22 budget bill (S.2509-C/A.3009-C) (Final Bill). The Final Bill, which passed the NYS Senate April 6, includes various tax increases and provisions affecting certain individuals, pass-through entities and corporations. The Final Bill now will be sent to Governor Andrew Cuomo, who is expected to sign it soon. EY Tax Alert 2021-9007 has details.
EY Guides and Publications
Biden tax proposals take shape amid uncertain outlook in Congress
This publication from Washington Council Ernst & Young provides a look at the rationale for tax changes, details and differences among plans, what the changes would pay for, and the outlook in Congress.
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.
Tax in the time of COVID-19: Update on legislative, economic, regulatory and IRS developments (April 16)
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.
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.
Upcoming changes to IRC Section 174: Amortization of research and experimental expenditures (April 27)
During this Thought Center Webcast, Ernst & Young professionals will discuss (i) the upcoming changes to IRC Section 174, (ii) the potential tax and operational impact of these changes, (iii) immediate and long-term potential planning, and (iv) proposed legislation.
Recent Tax Alerts
— Apr 05: Tax Court holds clothing designer may not claim research credits for expenditures related to designing clothes (Tax Alert 2021-0704)
Internal Revenue Service
— Apr 07: IRS issues guidance on employee retention credit for 2021 (Tax Alert 2021-0724)
— Apr 02: IRS issues guidance for employers claiming Employee Retention Credit for Q1 and Q2 2021 (Tax Alert 2021-0698)
— Apr 02: IRS issues annual APA report for 2020 (Tax Alert 2021-0691)
— Apr 08: Costa Rica's tax administration publishes resolution on Advance Pricing Agreements (Tax Alert 2021-0733)
— Apr 08: Singapore announces foreign manpower policy updates (Tax Alert 2021-0732)
— Apr 08: PE Watch | Latest developments and trends, April 2021 (Tax Alert 2021-0729)
— Apr 08: Polish Supreme Court confirms findings of CJEU Danske Bank case are applicable to VAT settlements of Polish branches (Tax Alert 2021-0723)
— Apr 07: Peruvian Tax Court concludes income received by a silent partner in a silent partnership will be treated as dividends (Tax Alert 2021-0721)
— Apr 07: Saskatchewan budget 2021-22 discussed (Tax Alert 2021-0719)
— Apr 07: Spanish Council of Ministers approves MDR regulations (Tax Alert 2021-0718)
— Apr 06: UK issues new consultation on transfer pricing documentation (Tax Alert 2021-0715)
— Apr 05: Canada Revenue Agency issues supplemental guidance on international income tax issues resulting from COVID-19 (Tax Alert 2021-0712)
— Apr 05: Italy extends period for inbound tax regime applicable to individuals who moved tax residency in Italy before April 30, 2019 (Tax Alert 2021-0711)
— Apr 06: Egypt to limit VAT input tax credit on paper invoices (Tax Alert 2021-0709)
— Apr 05: Turkey proposes increase in corporation tax rate (Tax Alert 2021-0707)
— Apr 05: Quebec releases list of transactions for mandatory disclosure (Tax Alert 2021-0706)
— Apr 05: Uruguay allows certain companies to pay only 50% of their employer pension contributions in light of the COVID-19 pandemic (Tax Alert 2021-0705)
— Apr 02: Cyprus law to implement Mandatory Disclosure Rules enters into force (Tax Alert 2021-0694)
— Apr 02: OECD publishes Arbitration Profiles of 30 countries under the MLI and a clarification regarding entry into effect (Tax Alert 2021-0690)
— Mar 26: Canada Revenue Agency outlines potential changes to RSU sourcing methodology (Tax Alert 2021-0642)
— Apr 05: US Presidential Proclamation 10052 expired March 31 (Tax Alert 2021-0710)
— Apr 02: Associate Chief Counsel (International) provides advice on federal tax classification of certain foreign entities (Tax Alert 2021-0697)
— Mar 24: Extended delay in effective and transition dates of US Department of Labor’s high-skilled wage rule discussed (Tax Alert 2021-0619)
— Apr 08: New York State budget agreement reached, includes income tax increases for businesses and individuals, new tax on pass-through entities (Tax Alert 2021-0727)
— Apr 06: New York 2021 SUI tax rates and wage base increased (Tax Alert 2021-0714)
— Apr 05: Sales and Use Tax Quarterly Update for Second Quarter of 2021 (Tax Alert 2021-0708)
— Apr 02: Virginia requires unitary business groups to file corporate income tax informational report based on group's combined net income (Tax Alert 2021-0699)
— Apr 02: Ohio Board of Tax Appeals holds municipality cannot impose income tax on portion of employee's work outside of municipality (Tax Alert 2021-0695)
— Apr 02: Kansas executive order ends teleworker income tax relief for COVID-19 effective January 1, 2021 (Tax Alert 2021-0693)
State and Local Tax Weekly
Highlights of this edition include:
— Maine law updates state's date of conformity to IRC and makes various income tax changes New law, L.D. 220, makes various changes to Maine's tax laws. Notably, it updates the state's date of conformity to the Internal Revenue Code of 1986, as amended (IRC) to Dec. 31, 2020 (from Dec. 31, 2019), applicable to tax years beginning on or after Jan. 1, 2018.
— Income/Franchise, Sales & Use, Business Incentives, Controversy, Payroll & Employment Tax, Global Trade, Value Added Tax
Highlights of this edition include:
- President Biden lays out $2 trillion infrastructure plan to be paid for with tax increases
- Senate Finance Committee holds international tax hearing
- Congressional Democrats introduce international tax legislation
- President Biden signs $1.9 trillion American Rescue Plan Act of 2021
Treasury and IRS news
- IRS says assumption of reinsurance agreement does not result in base erosion payments
- IRS opens initiative on virtual currency
Transfer pricing news
- IRS APMA program director discusses taxpayers’ treatment of COVID-related costs
- IRS APMA Program releases annual APA update
- OECD official floats BEPS 2.0 Pillar Two simplification
- OECD publishes jurisdictions currently participating in the International Compliance Assurance Programme
IRS Weekly Wrap-Up
| ||2021-23||Guidance on the Employee Retention Credit under the CARES Act for the First and Second Calendar Quarters of 2021|
| ||2021-25||Temporary 100-Percent Deduction for Business Meal Expenses|
Internal Revenue Bulletin
| ||2021-14||Internal Revenue Bulletin of April 5,2021|
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.