Tax

• [New] The rate of diverted profits tax will increase to 31% to maintain its aim to discourage avoidance, but indications were given that the bank surcharge is likely to reduce to maintain a globally competitive tax rate for banks.
• [New] Republicans have roundly rejected President Joe Biden's $2.2 trillion opening bid for an infrastructure, tax, and jobs plan.
• [New] American business leaders are warning a corporate tax rate hike proposed by President Joe Biden could make it harder to hire workers and increase their wages.
• [New] Georgia Republicans threaten to punish Delta Airlines by repealing a state tax credit for jet fuel.
• [New] The U.S. plan envisages a 21% minimum corporate tax rate, coupled with eliminating exemptions on income from countries that do not enact a minimum tax to discourage the shifting of jobs and profits overseas.
• [New] Ottawa's new budget later this month is expected to increase taxes on internet operators, and find new ways to tax tech profits.
• [New] As part of a global minimum rule, if companies paid lower rates in a particular country their home governments could claim top - ups to the agreed tax floor, eliminating the advantage of shifting profits to a tax haven.
• [New] Reports that a global minimum tax could be on the cards by year's end seem highly optimistic, since there would need to be agreement among OECD and G20 nations on what the minimum rate would be.
• [New] While countries could still set whatever tax rates they choose - the way the minimum rate would work is that if companies pay lower rates in a particular country (say Ireland where the tax rate is 12.5%) their home governments could top-up their taxes to the agreed minimum rate.
• [New] Biden's plans for American corporate taxes involve increasing the floor US companies will face if they are earning money overseas.
• [New] Though the idea of a minimum tax raises hackles in tax havens in the Caribbean, parts of Europe and farther afield, many other big economies will welcome America's renewed commitment to multilateralism on tax after the prickly unilateralism of the Trump years.
• [New] Similar threats by the US to EU exports have already meant that the EU has caved in and dropped its plans for a similar digital service tax.
• [New] The increases combined with New York City's own 3.9% tax on personal income, as well as federal income tax rates that range from 10% to 37%, will raise the top marginal personal tax rate for city residents to nearly 52%.
• [New] Key to the Biden administration's pitch is bringing corporate tax revenues closer to their historic levels, rather than raising them to new highs that could make U.S. businesses less competitive globally.
• [New] As political parties set out how they plan to use Holyrood's tax powers, it should be concerning that a third of respondents are unaware that the Scottish Parliament has made changes to the tax system in Scotland.
• Canadian Prime Minister Justin Trudeau's Liberal government is aiming to cut carbon emissions from 730 megatons per year to 503 megatons by 2030, and has imposed measures including a carbon tax that will steadily ramp up to C$170 a ton.
• The Indian Budget has proposed to clarify that the minimum alternative tax will not apply to foreign investors receiving dividend income from Indian companies.
• By the end of 2021, under United Nations' guidance, governments everywhere plan to find a way to impose a global carbon tax regime that will increase energy costs everywhere.
• The maximum eligible investment for the Small Business Venture Capital Tax Credit will rise from $450,000 to $500,000, and the maximum tax credit allowable against Manitoba income tax will increase from $67,500 to $120,000; and.

Last updated: 18 April 2021