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

August 11, 2023
2023-5574

Report on recent US international tax developments - 11 August 2023

President Biden signed the United States-Taiwan Initiative on 21st-Century Trade First Agreement Implementation Act (H.R. 4004) on 7 August. The legislation stipulates that the United States Trade Representative must send negotiating texts to the relevant congressional committees during trade negotiations, and Congress must approve any trade agreements. This follows on-going dialogue between the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office to enhance economic and commercial ties.

Separately, there are some proposals regarding tax. For example, Senate Finance Committee Chairman Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) announced that the Finance Committee will meet in September to mark-up tax legislation to strengthen the US economic relationship with Taiwan. Senator Wyden and Senator Crapo, along with House Ways & Means Committee Chairman Jason Smith (R-MO) and Ranking Member Richard E. Neal (D-MA) on 12 July released a discussion draft of legislation for a US-Taiwan tax agreement. In addition, the Senate Foreign Relations Committee on 13 July approved the Taiwan Tax Agreement Act (S. 1457), which would authorize the President to negotiate and enter into a tax agreement.

Russia on 8 August reportedly suspended certain double tax treaty benefits with countries that Russia designates as "unfriendly states." According to press reports, Russian President Putin signed a decree on 8 August suspending certain provisions in tax treaties with 38 countries, including the United States, Canada, the United Kingdom and Australia. Press reports also indicate that the suspension will remain "until foreign states eliminate the violations they have committed of the legitimate economic and other interests of the Russian Federation, the rights of its citizens and legal entities."

According to an advance unedited draft report dated 8 August 2023, the United Nations (UN) is suggesting alternatives for promoting international tax cooperation. The report discusses existing international and multilateral arrangements, and notes that, while the OECD has "introduced several initiatives to engage and associate non-OECD members with its work … many of those countries find that there are significant barriers to meaningful engagement in agenda-setting and decision making." Consequently, "the substantive rules developed through these OECD initiatives often do not adequately address the needs and priorities of developing countries and/or are beyond their capacities to implement."

To promote cooperation among all countries, the UN "would leverage existing strengths and address gaps and weaknesses in current international tax cooperation efforts." It also proposed three options for furthering international tax cooperation:

  1. A binding multilateral convention that would "set out specific rules creating obligations, including rules that potentially place limits on exercising taxing rights"
  2. A binding framework convention that would "outline the core tenets of future international tax cooperation," including objectives, key principles and a governance structure
  3. A "non-binding multilateral agenda for coordinated actions, at the international, national, regional, and bilateral levels, on improving tax norms and capacity"

———————————————

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

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

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

 
 

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 ey.com. Please refer to the privacy notice/policy on these sites for more information.


Yes, I accept         Find out more