Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

April 16, 2021

Report on recent US international tax developments 16 April 2021

United States (US) President Joe Biden this week began his outreach on the US$2.2 trillion American Jobs Plan infrastructure proposal that is coupled with tax increases and changing Tax Cuts and Jobs Act (TCJA) international tax provisions included in the Made in America Tax Plan. The President met on 12 April with congressional lawmakers of both parties and from both the House and Senate, with Republicans reportedly arguing against raising corporate taxes and in favor of a narrower package. It was also announced that President Biden will address a Joint Session of Congress on 28 April, following the customary invitation by the Speaker of the House, Nancy Pelosi. The President is expected to  make the case for Congress to act on his proposed infrastructure plan.

Looking ahead, President Biden is set to detail a second plan focused on individuals, the American Families Plan, in the coming weeks. This likely will include proposed tax increases targeting individuals and could include increasing the top tax rate and capital gains changes. The American Jobs Plan and the American Families Plan could be combined or stay separate. Speaker Pelosi said on 8 April that she expected there will be two bills.

The Internal Revenue Service (IRS) on 12 April released proposed regulations (REG-121095-19) that would allow certain non-US persons and non-US-owned partnerships, including private equity, real estate, and other funds, to reduce or eliminate withholding imposed under Internal Revenue Code1 Sections 1445, 1446(a) and 1446(f) on eligible gains deferred and invested in a qualified opportunity fund (QOF), provided certain requirements are met. Such persons must timely obtain from the IRS an applicable “eligibility certificate” and meet certain specified, related requirements in order to include so-called “security-required gains” in their QOF deferral election.

The TCJA created Opportunity Zones (OZs) by adding Section 1400Z-1 and Section 1400Z-2 to encourage investment in economically-distressed areas by giving tax incentives to taxpayers who invest and hold onto investments in OZs through QOFs. The proposed regulations would coordinate the deferral election under Section 1400Z-2(a) with the withholding rules in Sections 1445, 1446(a) and 1446(f).

The IRS recently released new frequently asked questions (FAQs) and answers on the International Compliance Assurance Program (ICAP). The FAQs are directed at US multinationals enterprises (MNEs) that may be considering the program. ICAP is a voluntary risk assessment and assurance program designed to facilitate open and cooperative multilateral engagement between large MNE groups and tax administrations in jurisdictions where the MNE groups have business activities. ICAP differs from existing cross-border dispute resolution processes such as Advance Pricing Agreements, Mutual Agreement Procedures and arbitration, all of which are intended to eliminate rather than simply lessen risk. See EY Global Tax Alert, US IRS releases FAQs on ICAP program for US multinational enterprises, dated 15 April 2021.

EY on 12 April submitted a comment letter on the European Union (EU) Public Consultation for a Fair & Competitive Digital Economy – Digital Levy. The letter provides EY's perspective on the considerations raised in the consultation for the design of an EU digital levy. The European Commission launched a public consultation on a new digital levy on 18 January 2021, the aim of which is to “ensure fair taxation in the digital economy, while at the same time contributing to Europe’s recovery.”


For additional information with respect to this Alert, please contact the following:

Ernst & Young LLP (United States), International Tax and Transaction Services, Washington, DC



  1. All “Section” references are to the Internal Revenue Code of 1986, and the regulations promulgated thereunder.

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


Copyright © 2024, Ernst & Young LLP.


All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.


Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.


"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.


Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or Please refer to the privacy notice/policy on these sites for more information.

Yes, I accept         Find out more