Biden Tax Plan

Episode Duration:
70 minutes

Episode Background:
On March 31, 2021 President Biden unveiled Made in America tax plan, the goal of which, besides increasing the corporate tax rate , is also to make American companies and workers more competitive by eliminating incentives to offshore investment, substantially reducing profit shifting, countering tax competition on corporate rates , and providing tax preferences for clean energy production. On April 5th, 2021, three top Senate Democrats released a proposal to overhaul the U.S. international tax system that could shape the outcome of the global tax revamp that the White House is pursuing to fund infrastructure spending. Additionally, on April 7, 2021, the Treasury Department released a report, the Made in America Tax Plan, which describes the proposed changes to corporate and international law that President Biden outlined in his infrastructure package, the American Jobs Plan.

President Biden had also proposed a new 10% "Made in America" tax credit in one of his pre-election proposals, for companies that invest in the U.S and promote revitalizing, renovating, and modernizing existing – or recently closed – facilities.

Just like the Tax Cuts and Jobs Act of 2017, the new tax changes proposed by Biden and his Democrat colleagues are expected to have far-reaching tax implications for multinational corporations. The key question remains whether and when all of these proposals will get enacted into law and from when would those be effective. House Speaker Nancy Pelosi (D-Calif.) said she hopes to pass the package through the House by July 4, setting up the Senate to act before Congress breaks for August recess.

What shall the episode cover?

Against this backdrop, Taxsutra is delighted to present to you a special panel discussion on “Biden Tax Plan” in association with KNAV. The esteemed panellists,  Mr. Shishir Lagu (Partner, US Tax) , Ms. Simone Alting (Associate Partner, US Tax) and Mr. Kavit Sanghvi (Practice Director, US Tax) from KNAV, has discussed the key corporate tax proposals and repercussions thereof for US inbound and outbound corporations. Furthermore, to give an industry perspective on this matter, Mr. Mayank Manot (Associate Vice President - International Tax at Infosys Limited) has also been a part of the panel. The panel is moderated by Mr. Uday Ved (Partner, KNAV) and Taxsutra's Group Editor, Mr. Arun Anandagiri.

Some of the key corporate tax proposals are:

Key Highlights

• Raising the corporate income tax rate to 28 percent,
• Reducing incentives for foreign jurisdictions to maintain ultra-low corporate tax rates by encouraging global adoption of robust minimum taxes;
• Replacing BEAT with SHIELD” (Stopping Harmful Inversions and Ending Low-tax Developments) leading to disallowance of expenses paid to related parties in low effective tax rate jurisdictions;
• Major overhaul of the existing GILTI provisions  
• Repeal FDII and use the funds to incentivize R&D in the United States directly and effectively
• Enacting a 15 percent “minimum tax” on book income of large companies.