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31 January 2025 Report on recent US international tax developments - 31 January 2025 US House Speaker Mike Johnson (D-LA) this week confirmed plans for the House Budget Committee to begin marking up an FY2025 budget resolution when Congress returns to Washington next week. Speaking at a congressional Republican retreat in Florida, the Speaker said this will begin the reconciliation process "where the lion's share of these campaign promises that we made are fulfilled." Speaking at the retreat, President Trump repeated earlier comments that he remains open to either one or two budget reconciliation bills, saying the end result would be the same. The President also called for action on his campaign priorities: "no tax on tips, no tax on Social Security, and no tax on overtime." The press quoted House Majority Leader Steve Scalise (R-LA) on the current Republican budget reconciliation timeline. The Majority Leader said that budget resolution consideration would take place in February with budget reconciliation fully underway in committee in March. Under this timeline, a budget reconciliation bill would hit the House floor in the first half of April. The Senate on 27 January confirmed the nomination of Scott Bessent to be Treasury Secretary; he was sworn into office the next day. The vote was 68-29, with 15 Democrats joining Republicans in support. An IRS official this week implied that President Trump's recent Executive Order on the OECD global tax deal will not necessarily affect IRS guidance on BEPS 2.0 Pillar One Amount B, although the Trump Administration's position is unclear. Amount B is aimed at simplifying and streamlining the transfer pricing of in-country baseline marketing and distribution activities, while ensuring outputs consistent with the arm's-length principle. The IRS issued Notice 2025-4 on 18 December 2024, announcing the agency's intent to issue proposed regulations to implement "in its entirety" the substance of the OECD's February 2024 report on BEPS 2.0 Pillar One Amount B. The simplified and streamlined approach (SSA) would apply for pricing certain controlled transactions involving baseline marketing and distribution activities. The proposed regulations will incorporate the SSA as a taxpayer safe harbor. Taxpayers subject to US tax on in-scope transactions may rely on the Notice and elect to apply the SSA for tax years beginning on or after 1 January 2025. Hungary's Prime Minister reportedly has authorized the negotiation of a new income tax treaty with the United States. The US terminated the 1979 US-Hungary tax treaty in January 2023. A proposed US-Hungary treaty was signed in 2010 but was never ratified.
Document ID: 2025-0375 | ||||