Senate Finance Committee Chairman Ron Wyden (D-OR) and Finance Members Sherrod Brown (D-OH) and Senator Mark Warner (D-VA) today released discussion draft legislation (the ‘Discussion Draft’) and a six-page, section-by-section staff description (the ‘Description’) on international tax reform proposals. The Discussion Draft builds on concepts set forth in a framework outline of proposals for overhauling international taxation that was released by Chairman Wyden, Senator Brown and Senator Warner on April 5, 2021.
The Discussion Draft and the Description provide additional insight into how Chairman Wyden and Finance Committee Democrats may propose to change current international tax provisions related to global intangible low-taxed income (GILTI), foreign-derived intangible income (FDII), the base erosion and anti-abuse tax (BEAT), and subpart F in general. Public comments are requested by September 3, 2021.
Chairman Wyden’s release of the Discussion Draft follows House approval on August 24 of a Senate-passed budget resolution that provides reconciliation instructions for spending and tax relief provisions that would be offset in part by corporate and individual tax increases. With passage of the budget resolution, House and Senate committees, including the House Ways and Means and Senate Finance Committees, can begin drafting reconciliation legislation. The budget resolution sets a non-binding deadline of September 15 for committees to draft and report legislation for further action in the House and Senate.
Action item: The House and Senate tax committees are preparing to act on legislation that likely would increase corporate and individual tax rates and make significant changes to current international tax rules, along with other changes to current tax law. Stakeholders should continue to communicate with policy makers on the potential effects of tax increase proposals on their employees, job creation, and investments in the United States and abroad.