Biden Administration announces infrastructure plan with corporate tax proposals

Monthly Newsletter Apr. 2021 | U.S. International Tax

On March 31, 2021, President Biden announced the $2 trillion American Jobs Plan.  These include raising the corporate tax rate infrastructure investment and its financial resources, the corporate tax increase, in the form of a Fact Sheet. He announced the Made in America Tax Plan, which was designed to fund approximately $ 2 trillion in infrastructure spending over the next 15 years by making changes to the Corporate Tax Act. These changes typically change the provisions enacted as part of the Tax Cuts and Jobs Act (TCJA). In addition to raising funds from the corporate tax hike, the plan calls for an extension and strengthening of clean energy and carbon capture and storage tax credits.

Main suggestions

• Increase the corporate tax rate from 21% to 28%.
• Increase the tax rate on Global Intangible Low-Taxed Income (GILTI) from 10.5% to 21%, calculation based on a country-by-country basis and abolition of the provision to exclude 10% of Qualified Business Asset Investment (QBAI) from total income.
• Enact an Alternative Minimum Tax of 15% on book income before tax.
• Eliminate the deduction for Foreign-Derived Intangible Income (FDII).
• Strengthening measures for US taxation Base Erosion by inbound companies.
• Strengthen Inversion measures for US corporations.
• Deny expense deductions for companies offshoring jobs and provide a tax credit to incentivize repatriating work.
• Elimination of tax preferences for fossil fuels.
• Strengthen corporate tax enforcement.

The above information is part of this publication and general, and not intended to address any particular situation. It is necessary to consider how it will affect your respective tax situation.

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