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November 7, 2021

U.S. International Tax This Week for November 5

Ernst & Young's U.S. Tax This Week newsletter for the week ending November 5 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.


As we go to press, it is not clear if House Democrats will vote today (5 November) on the Build Back Better (BBB) Act (H.R. 5376) budget reconciliation bill and/or the Infrastructure Framework (BIF).

House action on the budget reconciliation bill picked up steam this week, as Democrats realized a bicameral agreement at this stage appeared unrealistic. House Democratic leaders on 3 November released a manager's amendment to the BBB Act that included modifications from the text released on 28 October. The final version of the reconciliation bill includes changes to the state and local tax deduction cap, the addition of four weeks of paid leave, rules relating to retirement plans, and drug pricing provisions, among other provisions. Many provisions that diverge from the 28 October version are add-backs from the original language reported by the House Ways & Means Committee in September. With regard to the international tax provisions, the manager's amendment contains some technical changes and clarifications that could potentially be meaningful for some taxpayers.

The Joint Committee on Taxation on 4 November released its initial score estimate of the social spending bill, concluding it would raise an estimated $1.48 trillion over 10 years, therefore not adding to the deficit.

The House and Senate are scheduled to be in recess next week, which, along with a congressional delegation to the climate summit in Glasgow that includes House Speaker Nancy Pelosi, provided further urgency to this week's process. Senator Joe Manchin suggested major changes to the House bill are likely, saying earlier this week in an interview: "They're [House Democrats] working off the House bill. That's not going to be the bill I work off of." Senator Manchin said senators would negotiate into next week and potentially be in position for Senate consideration the week of 15 November. Senate Majority Leader Chuck Schumer has targeted completion of the bill by Thanksgiving. In a recently released Internal Revenue Service Chief Advice Memorandum, the Service concluded that where the extended six-year assessment period under IRC Section 6501(e)(1)(c) applies due to omitted subpart F income and Global Intangible Low-Taxed Income (GILTI), the extended assessment period applies to the entire tax liability (i.e., all items on the return), and not just the omitted subpart F and/or GILTI item(s). This is based on the prefatory language in IRC Section 6501(e) — "any tax imposed by subtitle A" — and case law.

Upcoming Webcasts

International tax talk quarterly series with the EY Global Tax Desk Network (November 9)
During this EY Webcast, panelists from Europe, Latin America and the Asia-Pacific region, will discuss the following: (i) Recent EU tax legislative changes affecting intragroup transactions and holding, financing and intellectual property arrangements; (ii) Key changes under the proposed Latin-America tax reform in Brazil and Mexico; (iii) Trends, developments and the potential impact of global tax reform in the Asia-Pacific region; and (iv) Foreign tax considerations in preparing for proposed US legislative changes, with a focus on developments that may require action by December 31, 2021.

Tax in supply chain series: India – from resilience to resurgence (November 10)
During this EY Webcast, Ernst & Young professionals will be joined by Deepak Bagla, Managing Director and CEO of Invest India, to share insights on global and domestic factors affecting investments into India.

Recent Tax Alerts


— Nov 04: Thailand publishes mandatory requirements for submission of Thai transfer pricing Country-by-Country reports (Tax Alert 2021-2016)

— Oct 29: Vietnam releases a Circular on digital tax (Tax Alert 2021-1980)

Canada & Latin America

— Nov 04: EY Canada's Tax Matters @ EY for November 2021 (Tax Alert 2021-2015)

— Nov 03: Colombia issues regulations to identify preferential tax regimes (Tax Alert 2021-2010)

— Nov 02: Peru's President asks Congress for power to enact different tax measures (Tax Alert 2021-2000)

— Nov 02: Argentina announces new policies for inbound travelers (Tax Alert 2021-1999)

— Nov 02: Uruguay announces new policies for inbound travelers (Tax Alert 2021-1995)

— Nov 01: Canada's targeted COVID-19 support measures announced (Tax Alert 2021-1987)

— Oct 29: Mexican Congress approves 2022 tax reform (Tax Alert 2021-1982)


— Nov 04: Cyprus issues Ministerial Decree on DAC6 Guidelines (Tax Alert 2021-2014)

— Oct 29: Sweden extends entry ban and adds new categories of travelers to exemption list (Tax Alert 2021-1981)


— Nov 03: Mexico and Germany sign new protocol to tax treaty (Tax Alert 2021-2007)

— Nov 03: US and EU agree to end steel and aluminum tariffs and cooperate to address carbon intensity (Tax Alert 2021-2005)

— Nov 02: G20 leaders confirm commitment to global tax changes under BEPS 2.0 (Tax Alert 2021-1991)

IRS Weekly Wrap-Up

Internal Revenue Bulletin

 2021-44Internal Revenue Bulletin of November 1, 2021
 2021-45Internal Revenue Bulletin of November 8, 2021

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:

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.