Biden administration released tax increase plan “Green Book”

Newsletter Jun. 2021 | U.S. International Tax

On May 28, 2021, the U.S. Treasury unveiled many details for the first time on the tax increase proposals outlined in the “Made in America Tax Plan” and “American Families Plan”.   The “Green Book” (General Explanation of the Administration’s Revenue Proposals) explains the details of the White House Budget and the Biden Administration’s Tax Increase.

It is unclear what the final tax reform bill will look like through future parliamentary deliberations.

Since there are some unclear points in the description published this time, we list some topics that may be of particular interest or influence to Japanese companies.

• Increase corporate tax rate from 21% to 28%
• Amendment of Global Intangible Low-Taxed Income (GILTI)
• Non-deductible expenses related to GILTI deductions and 100% dividend income deductions
• Elimination of BEAT and introduction of SHIELD
• Elimination of Foreign-Derived Intangible Income (FDII)
• Partial change in foreign tax credit calculation rules
• Strengthening measures for inversion of US corporations
• 10% tax credit on eligible onshore spending
• Non-deductible offshoring related costs
• 15% alternative minimum tax on pre-tax profit on consolidated financial statements
• Clean energy tax incentive
• Amendment of foreign tax credit rules for hybrid-based equity transfer
• Introduction of deduction limit rules for excess interest expense based on consolidated financial statements
• Personal income tax increase
• Strengthening tax audits for business owners and corporations.

For additional information and detail, please feel free to contact us.

Pro-Vider Consulting LLC  contact@pro-vider-pros.com
Ozawa, Kaneko and Associates LLP info@ozawacpa.com