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Biden’s international tax aspects in the “Made in America Tax Plan”

A Tax proposal recently released by the Biden Administration focused primarily on multinational corporate taxpayers.

  • Reform GILTI (global intangible low-tax income) by calculating tax on a country by country basis and increasing the tax rate from 10.5% to 21%
  • Replacement of BEAT (base erosion anti-abuse tax) with SHIELD (Stopping Harmful Inversions and Ending Low-Tax Developments) that denies multinational corporations US tax deductions made to related parties
  • Treating a foreign acquiring corporation as a US company if that entity is managed and controlled in the US
  • An anti-profit stripping provision that would deny deductions to foreign corporations on payments out of the US if they are based in a country that does not adopt a strong minimum tax
  • Companies will no longer be able to exclude 10% of their tangible foreign assets from the calculation of tax
  • Repeal of FDII – foreign derived intangible income regime because it does not encourage research and development
  • Increase the US Corporate tax rate from 21% to 28%; some Democrats prefer 25%
  • 15% minimum tax on book income for companies with over $100 million in net income, high profits and pay little or no Federal income tax