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06 February 2022

U.S. International Tax This Week for February 4

Ernst & Young's U.S. Tax This Week newsletter for the week ending February 4 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.

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Spotlight

Senator Joe Manchin this week continued to say that a wholly new spending and tax bill must be constructed following the demise of the House-passed Build Back Better Act (BBBA). He also said that he wants government funding and election reform bills done prior to the rebuilding effort. The US faces expiration of government funding on 18 February, although a stopgap funding measure could be enacted.

The House voted on 4 February on the America COMPETES Act competitiveness bill, and House Majority Leader Steny Hoyer said he hopes a House-Senate agreement between the America COMPETES Act and the Senate-passed USICA could emerge "within a 30-day period." Congress' increasingly full agenda this month raises questions whether there will be much opportunity for progress on a post-BBBA new climate/social spending/tax bill in February, though some discussions have begun. The end of February also brings the target date that President Biden set for selecting a Supreme Court nominee who would be subject to the Senate confirmation process, followed by the State of the Union Address on 1 March and release of the Administration's FY2023 budget and "Greenbook" of tax proposals at some point.

Also on 4 February, the Organisation for Economic Co-operation and Development (OECD) announced the first wave of consultations on the Base Erosion and Profit Shifting (BEPS) 2.0 Pillar One rules, focused on nexus and sourcing for Amount A, and released a public consultation document (Draft Rules for Nexus and Revenue Sourcing). Comments are due by 18 February. The OECD release is available here.

An OECD official also said there are no plans to alter the BEPS 2.0 timeline for countries to implement the new global tax rules. Speaking during a virtual meeting on 31 January, OECD Secretary General Mathias Cormann was quoted as saying the OECD established the ambitious timeline for both Pillars to come into effect beginning in 2023, and noted some jurisdictions have already begun the implementation process.

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Upcoming Webcasts

International tax talk quarterly series…With the EY Global Tax Desk Network (February 8)
The European Commission recently published a legislative proposal for a directive to tackle the misuse of shell entities in the European Union (UNSHELL/ATAD 3). This EY Webcast, will address how implementation of these new requirements could affect businesses. At a high level, the webcast will also consider the impact these provisions are likely to have in other regions with respect to similar anti-abuse rules and reporting requirements, as well as these countries’ responses to increased tax transparency in recent years.

What India’s 2022-23 Budget could mean for its economy (February 9)
Join us for this EY Webcast, during which our senior EY tax and policy professionals will help decode the fine print of the 2022-23 India Budget, covering the macroeconomic and policy announcements, direct tax proposals and indirect tax proposals.

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Recent Tax Alerts

United States

Africa

Asia

Canada & Latin America

Europe

— Feb 03: PE Watch | 2021 in review (Tax Alert 2022-0198)

Middle East

Multinational

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IRS Weekly Wrap-Up

Internal Revenue Bulletin

 2022-05Internal Revenue Bulletin of January 31, 2022

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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:

— 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: 2022-0206

 

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