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June 25, 2021

Report on recent US international tax developments 25 June 2021

President Joe Biden on 24 June gave his approval to a bipartisan infrastructure “framework” that had been worked out the day before by White House officials and a group of bipartisan senators. The framework reportedly sticks to the bipartisan plan’s spending limits of US$5791 billion in new spending, $974 billion over five years and $1.2 trillion over eight years.

Most of President Biden’s tax increase proposals are omitted, although one of the pay-fors is reducing the tax gap. According to a White House fact sheet, the $579 billion in new spending would be invested in roads, bridges, airports, passenger and freight rail, and EV (electric vehicle) infrastructure, plus non-transportation items like water and broadband infrastructure. Other provisions described in the sheet include an upgrade of power infrastructure, including by building thousands of miles of transmission lines to facilitate the expansion of renewable energy, including through a new Grid Authority; and an Infrastructure Financing Authority intended to leverage billions of dollars into clean transportation and clean energy.

Congressional action on the infrastructure plan, including timing, remains unclear. House Speaker Nancy Pelosi suggested during a news conference that the House would not vote on an infrastructure bill until both that bill and a follow-on budget reconciliation bill are passed by the Senate. Soon after announcing his approval of the framework, President Biden made clear that he expects Congress to pass both a bipartisan infrastructure bill and a reconciliation bill, and will only sign the legislation if they come to him at the same time. The President said at a news conference: “If they don’t come, I’m not signing; real simple. If only one comes to me . . . I’m not signing. It’s in tandem.”

The Democratic-formulated reconciliation bill, which is expected to include major tax increases, is likely to address issues such as health care, caregiving, and climate change. Movement on a reconciliation bill will require the House and Senate agreeing to the same budget resolution with reconciliation instructions.

The Organisation for Economic Co-operation and Development (OECD) on 22 June publishedModel Reporting Rules for Digital Platforms: International Exchange Framework and Optional Module for Sale of Goods.” The new rules reflect the interest of a number of jurisdictions to have information exchange relating to digital platforms. The framework complements theModel Rules for Reporting by Platform Operators With Respect to Sellers in the Sharing and Gig Economy,” which the OECD released in July 2020. Those rules require platform operators to report data on their sellers to tax administrations and provide a standardized approach for tax administrations to collect data on transactions that digital platforms undertake and the income they earn as a result. The OECD developed an international legal framework, the “Multilateral Competent Authority Agreement on Automatic Exchange of Information on Income Derived through Digital Platforms.” The framework includes an agreement and rules for the participating jurisdictions’ competent authorities that may be used to facilitate the automatic exchange of information collected under the model rules and promote international tax compliance. 


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. Currency references in this Alert are to the US$.

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