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20 June 2021

U.S. International Tax This Week for June 18

Ernst & Young's U.S. International Tax This Week newsletter for the week ending June 18 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

The White House this week insisted that there is no deadline for bipartisan infrastructure talks to conclude, but after a meeting with a White House official on 15 June, House Budget Committee Chairman John Yarmuth said the Administration was "giving it a week or 10 days and then we move along with [budget] reconciliation." In the meantime, a group of 11 senators — six Republicans, four Democrats and independent Sen. Angus King — this week announced that they support the proposed $1.2 trillion bipartisan infrastructure package. They joined 10 bipartisan senators who signed on to the proposal when it was released. The latest development gives a boost to getting the compromise package past the 60 vote margin needed to overcome a filibuster.

The House of Representatives on 15 June narrowly passed a package of measures (HR 1187) intended to improve corporate governance by requiring a number of new disclosures by public companies, including requiring country-by-country tax reporting for multinationals. The bill would direct the Securities and Exchange Commission to issue regulations requiring larger multinational corporations to publicly disclose country-by-country financial information for each of their subsidiaries.

More specifically, the bill would require businesses that are part of larger multinational enterprises to publicly disclose aggregate or consolidated financial activities for each tax jurisdiction where a subsidiary resides, including: (1) Revenue generated from transactions with other business units; (2) Profit or loss before income tax; (3) Total income tax paid on a cash basis to all jurisdictions; (4) Total accrued tax expenses recorded on taxable profits or losses; and (5) Net book value of tangible assets, excluding cash or cash equivalents, intangibles, and financial assets.

While the Biden Administration supports the bill, Republican opposition means HR 1187 would likely have to surpass a difficult 60-vote threshold in the Senate if considered under regular order. Democrats conceivably could include the country-by-country tax reporting and other disclosures in a 51-vote budget reconciliation bill, but their lack of substantial revenue or spending effects could subject the provisions to being challenged and stripped from a reconciliation bill.

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Upcoming Webcasts

The indirect tax technology journey: Now. Next. Beyond. (June 23)
During this Thought Center Webcast, Ernst & Young professionals will share insights into how market-leading organizations are using technology to adapt to new legislation and market trends, and to effectively transform tax operations.

2021 outlook for international tax reform (June 29)
During this Thought Center Webcast, Ernst & Young professionals will discuss what President Biden's budget, corporate revenue proposals and other global developments could mean for international taxation.

President Biden’s executive order on supply chains (June 30)
In response to President Biden’s recent executive order, various US government agencies have submitted recommendations on how to strengthen the US supply chain to assure continuous production of critical goods. During this Thought Center Webcast, Ernst & Young professionals will focus on the agencies’ findings and their effects on multinational corporations’ supply chains.

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Recent Tax Alerts

United States

Africa

Asia

Canada & Latin America

Europe

Middle East

Oceania

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IRS Weekly Wrap-Up

Internal Revenue Bulletin

 2021-24Internal Revenue Bulletin of June 14, 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: 2021-1216

 

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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