United States (US) Senator Joe Manchin this week continued to say that a wholly new spending and tax bill must be constructed following the demise of the House-passed Build Back Better Act (BBBA). He also said that he wants government funding and election reform bills done prior to the rebuilding effort. The Government faces expiration of government funding on 18 February, although a stopgap funding measure could be enacted.
The House voted today (4 February) on the America COMPETES Act competitiveness bill, and House Majority Leader Steny Hoyer said he hopes a House-Senate agreement between the America COMPETES Act and the Senate-passed USICA could emerge “within a 30-day period.” Congress’ increasingly full agenda this month raises questions whether there will be much opportunity for progress on a post-BBBA new climate/social spending/tax bill in February, though some discussions have begun. The end of February also brings the target date that President Joe Biden set for selecting a Supreme Court nominee who would be subject to the Senate confirmation process, followed by the State of the Union Address on 1 March and release of the Administration’s FY2023 budget and “Greenbook” of tax proposals at some point.
Also on 4 February, the Organisation for Economic Co-operation and Development (OECD) announced the first wave of consultations on the Base Erosion and Profit Shifting (BEPS) 2.0 Pillar One rules, focused on nexus and sourcing for Amount A, and released a public consultation document (Draft Rules for Nexus and Revenue Sourcing). Comments are due by 18 February 2022. The OECD release can be accessed here.
An OECD official also said there are no plans to alter the BEPS 2.0 timeline for countries to implement the new global tax rules. Speaking during a virtual meeting on 31 January, OECD Secretary General Mathias Cormann was quoted as saying the OECD established the ambitious timeline for both Pillars to come into effect beginning in 2023, and noted some jurisdictions have already begun the implementation process.
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
- Joshua Ruland
For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.
