Democratic presidential candidate Vice President Kamala Harris on 25 September expressed support for the international tax proposals put forward by the Biden Administration. A release on the New Way Forward to Build American Industrial Strength, including America Forward tax credits for emerging industries, indicated the plan will cost approximately $100b and "will be paid for by a portion of the proceeds of international tax reform, which seeks to prevent a global race to the bottom and to discourage inversions, outsourcing, or international tax strategies designed by corporations to avoid paying their fair share to the United States."

The broader "America Forward" plan is a continuation of the approach taken in the Bipartisan Infrastructure Law, the CHIPS and Science Act, and the Inflation Reduction Act (IRA), using industrial policy to bolster investments in target areas.

In Congress, Democrats led by Senate Finance Committee Chairman Ron Wyden (D-OR) are drafting Harris's tax proposals into legislation to have ready for the start of her administration if she wins the election.

Republican candidate Former President Donald Trump this week restated his proposals, including a 15% "Made in America" tax rate for companies that make products in America, while those that make products elsewhere would be required to pay "a very substantial tariff when you send your product into the United States." Tariffs were previously described to be 10%-20% or 60% for products from foreign adversaries, and Trump said 100% or 200% could apply to foreign automobiles.

The US House and Senate on 25 September also approved, and President Biden subsequently signed, a continuing resolution to extend government funding through 20 December. The Senate adjourned until 12 November, which is also the date the House is slated to return to session.

A Treasury official this week addressed the recently released proposed corporate alternative minimum tax (CAMT) regulations in the context of the depreciation rules. According to the official, the government is considering additional safe harbors and simplifications to lessen the compliance burden regarding CAMT depreciation.

Another Treasury official discussed the two different effective dates in the proposed CAMT package. Certain sections of the proposed regulations would apply to tax years ending after the date the proposed regulations are published in the Federal Register, while other sections of the proposed regulations would apply to tax years ending after the date the final regulations are published in the Federal Register. The official said the different effective dates are an acknowledgement that the proposed rules are more complex and require more administrative effort. Taxpayers may choose to rely on the proposed regulations for tax years ending before these dates, provided certain requirements are met.

A Treasury official this week said the government plans to release digital asset noncustodial broker reporting guidance before the end of the year. Recall that the IRS issued final regulations in July (TD 10000) on the information reporting of sales of digital assets. The IRS also released Notice 2024-56 and Notice 2024-57, providing transitional relief for digital asset brokers, and Revenue Procedure 2024-28, with guidance for taxpayers on allocating basis among digital asset wallets and accounts.

According to the official, Treasury and the IRS "are making good progress" on the noncustodial digital regulations as well as on regulations that will implement the OECD crypto-asset reporting framework. The OECD-related regulations are planned to be released after the noncustodial broker reporting guidance.

Puerto Rico's Department of Treasury has initiated a public consultation on implementation of the BEPS 2.0 Pillar Two global anti-base erosion (GloBE) Rules that will close on 10 October. The US territory is not required to implement the GloBE rules nor make changes to its legislation in response to the BEPS project. Nevertheless, Puerto Rico is now evaluating the impact that the BEPS rules may have in the territory as well as various policy options to ensure future competitiveness.

The OECD on 19 September held a signing ceremony for the BEPS Pillar Two Subject to Tax Rule (STTR) Multilateral Instrument (MLI), with nine countries signing on to the agreement. Ten jurisdictions also have expressed their intent to sign the STTR MLI as soon as their internal processes are finalized. The STTR is a treaty-based rule that applies to specified intragroup payments from source jurisdictions (i.e., the jurisdiction in which the income arises) that are subject to tax rates below 9% in the payee's jurisdiction of residence. The STTR allocates to the source jurisdiction a limited and conditional taxing right to ensure a minimum level of taxation on covered payments.

Similar to the BEPS MLI, when a jurisdiction signs the STTR MLI, it must specify the tax treaties that will be covered (referred to as Covered Tax Agreements (CTA)). For the STTR MLI to be applicable, both parties to a CTA must include the agreement in their notifications with respect to the STTR. Importantly, the STTR takes priority over the Pillar Two GloBE Rules, so that the application of the STTR does not take into account a qualified Income Inclusion Rule (IIR), a qualified Undertaxed Profits Rule (UTPR) or a Qualified Domestic Minimum Top-up Tax (QDMTT). A Global Tax Alert provides details.