August 8, 2021
U.S. International Tax This Week for August 6
Ernst & Young's U.S. International Tax This Week newsletter for the week ending August 6 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.
Following months of negotiation, the Senate this week took up the $1.2 trillion bipartisan infrastructure bill, the Infrastructure Investment and Jobs Act (HR 3684). Senators during the week offered several hundred amendments to the bill, which slowed the debate process, although the Senate ultimately is expected to pass the legislation. The text of the bill was released on 1 August.
Senate Majority Leader Chuck Schumer filed a motion for cloture on the bill on 5 August, setting up a vote to cut off debate, and announced that the Senate would reconvene at noon on 7 August for the cloture vote which requires a 60-vote threshold. "And then we will follow regular order to finish the bill," the Majority Leader said. The final passage vote could come early next week, or perhaps earlier if all senators agree to yield back time.
Under the Majority Leader's timetable, after the infrastructure bill is completed, the Senate will immediately turn to a motion to proceed to the Democrats' $3.5 trillion, fiscal 2022 budget resolution, followed by debate and amendment votes sometime next week. It is possible the House could interrupt its August recess to come back and vote on the Senate-passed budget blueprint for a "human infrastructure" bill that will center on health care, climate, and caregiving, generally to be paid for by corporate tax increases, taxes on capital income, and taxes on the wealthy. The budget resolution, when passed in identical form by both chambers, unlocks the 51-vote budget reconciliation mechanism, and House and Senate committees will work to flesh out their assigned pieces of the massive, Democrats-only bill in September and October.
The OECD this week released a peer review report on BEPS Action 5 (harmful tax practices) and issued a press release that indicated that the US has confirmed its intention to abolish the Foreign Derived Intangible Income (FDII) regime. The OECD noted that it therefore classified FDII as "in the process of being eliminated."
Recent Tax Alerts
— Jul 30: Arrangements between US and UK competent authorities clarify understanding of terms in the US-UK tax treaty (Tax Alert 2021-1448)
— Jul 22: 2021 Annual Report of the USCIS Ombudsman provided (Tax Alert 2021-1406)
Canada & Latin America
— Aug 02: Mexico extends deadline for complying with tax law on outsourcing services to September 1 (Tax Alert 2021-1456)
— Jul 22: Canada easing travel restrictions for U.S. citizens and Permanent Residents (Tax Alert 2021-1405)
— Aug 05: Cyprus to introduce new tax measures as part of its National Recovery and Resilience Plan (Tax Alert 2021-1469)
— Aug 05: Luxembourg Tax Authorities issue guidance on administrative fines related to tax infractions and procedures applicable to criminal tax offenses (Tax Alert 2021-1468)
— Aug 05: Spanish National High Court issues favorable decisions with respect to international holding structures after ECJ Danish cases (Tax Alert 2021-1465)
— Aug 04: Poland’s proposed tax reform includes significant changes to tax system (Tax Alert 2021-1462)
— Aug 03: Georgia postpones VAT on foreign suppliers of digital services to 1 October 2021 (Tax Alert 2021-1459)
— Aug 02: Cypriot Tax Department announces update of XML Schema for DAC6/MDR submissions (Tax Alert 2021-1445)
— Jul 29: UK waives quarantine requirements for fully vaccinated individuals traveling to England from Europe and US effective August 2 (Tax Alert 2021-1437)
— Aug 03: Israel publishes tax measures under its 2021 - 2022 proposed budget (Tax Alert 2021-1460)
— Aug 06: Australia's Refugee Talent pilot and international border update provided (Tax Alert 2021-1470)
IRS Weekly Wrap-Up
Internal Revenue Bulletin
| ||2021-31||Internal Revenue Bulletin of August 2, 2021|
| ||2021-32||Internal Revenue Bulletin of August 9, 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.