KPMG reports that the U.S. treasury department released details of tax proposals in the administration’s budget recommendations for FY 2023 in the “Green Book.”. It’s summary begins as follows:
Significant international tax proposals in the FY 2023 budget include the following (this list sets outs a high-level description and is not exhaustive):
Repeal and replace BEAT with an “undertaxed profits rule” (UTPR)
The most significant new U.S. international tax proposal included in the Green Book is to repeal the “base erosion and anti-abuse tax” (BEAT) and replace it with a new regime that is consistent with the UTPR described in the OECD Pillar Two Model Rules, to better align the U.S. rules with the global tax reform effort embodied in Pillar Two. To protect U.S. revenue from the imposition of UTPR by other jurisdictions, the Biden Administration would also include a domestic minimum top-up tax that would apply once when another jurisdiction adopts a UTPR
The administration’s UTPR proposal goes significantly beyond its prior “stopping harmful inversions and ending low-tax developments” (SHIELD) proposal as well as the modifications to BEAT contained in H.R. 5376, the “Build Back Better Act,” as passed by the House of Representatives on November 19, 2021 (the House BBBA bill) and represents a fundamental departure from the principles underlying BEAT.
To see the full report, click here: “International tax proposals in Biden Administration’s budget for FY 2023″
Posted by Anthony Tran, Associate Editor, Wealth Strategies Journal