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

June 4, 2021

Report on recent US international tax developments 4 June 2021

The United States (US) Treasury on 28 May released its FY 2022 explanation of the Biden Administration's revenue proposals (the Green Book), offering new details on the various proposals included in the President's "Made in America" tax plan.

The Made in America tax plan was first released in March 2021 and was followed by a Treasury report detailing the Administration's corporate tax proposals, including increasing the corporate tax rate from 21% to 28% and significant changes to international tax provisions.

The significant international tax proposals include:

  • Increased tax rates and other changes to the regime for Global Intangible Low-taxed Income (GILTI)
  • Country-by-country limitations on foreign tax credits
  • Repeal of the deduction for Foreign-derived Intangible Income (FDII)
  • Replacement of the Base Erosion and Anti-abuse Tax (BEAT) with a newly proposed "SHIELD" (Stopping Harmful Inversions and Ending Low-tax Developments)
  • Expanded rules targeting inversions
  • A new minimum tax on book income
  • Limits on interest deductions for disproportionate borrowing in the US
  • Treatment of dispositions of "specified hybrid entities" as stock sales for certain purposes

Most of the proposals would be effective for tax years beginning after 31 December 2021, though several are proposed to be effective for transactions completed after the date of enactment. The proposal to repeal BEAT and introduce SHIELD would be effective for tax years beginning after 31 December 2022. See EY Global Tax Alert, US Treasury Green Book offers new details on international tax proposals, dated 1 June 2021 for details.

President Joe Biden and Senate Environment & Public Works Ranking Member Shelley Moore Capito met this week without an announced breakthrough on bipartisan infrastructure talks, and will meet again on 4 June. At this point, Senate Republicans, led by Senator Capito, have offered a US$928 billion infrastructure counterproposal to President Biden’s US$1.7 trillion proposal, with disagreement continuing as to the size, scope and how to pay for a possible infrastructure deal. The President reportedly is floating a smaller infrastructure package although details are limited at this time.

White House press secretary Jen Psaki confirmed that President Biden is focusing on proposals like a 15% minimum tax on corporate book income to pay for infrastructure to generate bipartisan support. The President’s proposal to pay for infrastructure includes increased Internal Revenue Service enforcement of and compliance by wealthy individuals and corporations. The Administration is also signaling they will not wait much longer for a deal and want progress by the time Congress returns on 7 June from this week’s recess.

The US Trade Representative (USTR) on 2 June announced additional tariffs on goods from Austria, India, Italy, Spain, Turkey, and the United Kingdom (UK) stemming from Section 301 investigations of Digital Services Taxes (DSTs) from those countries. The USTR suspended the tariffs for up to 180 days, however, “to provide additional time to complete the ongoing multilateral negotiations on international taxation at the Organisation for Economic Co-operation and Development (OECD) and in the G20 process.“ For details, see EY Global Tax Alert, USTR announces 25% punitive tariffs on six specific countries in response to their Digital Services Taxes; Suspends tariffs for 180 days, dated 4 June 2021.

Officials from the Group of 7 (G-7) are meeting in London on 4-5 June, during which they are expected to pledge support for the Base Erosion and Profit Shifting (BEPS) 2.0 talks, including possibly a global minimum tax. A draft communique by the G-7, which consists of the US, Canada, France, Germany, Italy, Japan and the UK, is being reported in the press. The draft statement reportedly says: "We commit to reaching an equitable solution on the allocation of taxing rights and to a high level of ambition on the rate for a global minimum tax." The Biden Administration in April floated a 15% corporate minimum tax to the OECD/G20 Steering Group of the Inclusive Framework on BEPS.


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

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


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