June 20, 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.
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.
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.
Recent Tax Alerts
— Jun 16: US-EU announce Joint Cooperative Framework for Large Civil Aircraft; Suspend punitive tariffs on wide range of products for five-year period (Tax Alert 2021-1199)
— Jun 11: USCIS issues policy manual updates to improve immigration services (Tax Alert 2021-1165)
— Jun 15: Kenya proposes changes to Tax Appeals Tribunal Act, 2013 (Tax Alert 2021-1186)
— Jun 16: Armenian tax authorities begin transfer pricing audits (Tax Alert 2021-1195)
Canada & Latin America
— Jun 17: Chilean tax authorities are evaluating foreign service providers' compliance with recently enacted VAT on digital services (Tax Alert 2021-1210)
— Jun 17: Chilean tax authorities issue resolution amending the regulations for claiming reduced withholding rates (Tax Alert 2021-1207)
— Jun 17: The treaty for the avoidance of double taxation between Brazil and Switzerland has been ratified by the Brazilian President's sanction (Tax Alert 2021-1204)
— Jun 16: Argentina enacts law raising corporate income tax rates (Tax Alert 2021-1203)
— Jun 16: Argentine Central Bank issues new guidance for certain entities to access to the official foreign exchange market (Tax Alert 2021-1192)
— Jun 15: Ecuador's president announced foreign trade and investment policy measures (Tax Alert 2021-1189)
— Jun 11: El Salvador approves bitcoin as legal tender (Tax Alert 2021-1171)
— Jun 11: Canadian government begins to ease travel restrictions in July 2021 (Tax Alert 2021-1166)
— Jun 16: Luxembourg Tax Authorities issue guidance on the “equity escape clause” under interest limitation rules (Tax Alert 2021-1194)
— Jun 16: Poland announces plans to propose broad incentives for investors (Tax Alert 2021-1187)
— Jun 15: The Latest on BEPS and Beyond for June 2021 (Tax Alert 2021-1184)
— Jun 14: G7 leaders affirm commitment to global tax changes under BEPS 2.0 (Tax Alert 2021-1179)
— Jun 11: Jersey and Guernsey to extend economic substance rules to partnerships (Tax Alert 2021-1168)
— Jun 11: EU's framework for interoperable digital certificates of vaccination, testing and recovery to take effect on July 1 (Tax Alert 2021-1164)
— Jun 15: Turkey sets effective date for Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information (Tax Alert 2021-1185)
— Jun 14: Turkey approves Tax Amnesty Law (Tax Alert 2021-1177)
— Jun 14: Israel and United Arab Emirates sign tax treaty (Tax Alert 2021-1170)
— Jun 17: New trade agreement between UK and Australia includes multiple immigration provisions (Tax Alert 2021-1213)
— Jun 17: UK and Australia agree on trade deal (Tax Alert 2021-1197)
IRS Weekly Wrap-Up
Internal Revenue Bulletin
| ||2021-24||Internal Revenue Bulletin of June 14, 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.