The White House this week insisted that there is no deadline for bipartisan infrastructure talks to conclude, but after a meeting with a White House official on 15 June, House Budget Committee Chairman John Yarmuth said the Administration was “giving it a week or 10 days and then we move along with [budget] reconciliation.” In the meantime, a group of 11 senators – six Republicans, four Democrats and independent Sen. Angus King – this week announced that they support the proposed US$1.2 trillion bipartisan infrastructure package. They joined 10 bipartisan senators who signed on to the proposal when it was released. The latest development gives a boost to getting the compromise package past the 60 vote margin needed to overcome a filibuster.

The House of Representatives on 15 June narrowly passed a package of measures (HR 1187) intended to improve corporate governance by requiring a number of new disclosures by public companies, including requiring country-by-country tax reporting for multinationals. The bill would direct the Securities and Exchange Commission to issue regulations requiring larger multinational corporations to publicly disclose country-by-country financial information for each of their subsidiaries.

More specifically, the bill would require businesses that are part of larger multinational enterprises to publicly disclose aggregate or consolidated financial activities for each tax jurisdiction where a subsidiary resides, including: (1) Revenue generated from transactions with other business units; (2) Profit or loss before income tax; (3) Total income tax paid on a cash basis to all jurisdictions; (4) Total accrued tax expenses recorded on taxable profits or losses; and (5) Net book value of tangible assets, excluding cash or cash equivalents, intangibles, and financial assets.

While the Biden Administration supports the bill, Republican opposition means HR 1187 would likely have to surpass a difficult 60-vote threshold in the Senate if considered under regular order. Democrats conceivably could include the country-by-country tax reporting and other disclosures in a 51-vote budget reconciliation bill, but their lack of substantial revenue or spending effects could subject the provisions to being challenged and stripped from a reconciliation bill.

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

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

• Arlene Fitzpatrick | arlene.fitzpatrick@ey.com
• Joshua Ruland | joshua.ruland@ey.com