President Biden’s “Made in America Tax Plan” and proposed changes to US tax law for multinationals

On 7 April 2021, the Biden administration published the Made in America Tax Plan (“MAT Plan”), part of the newly announced American Jobs Plan, the goal of which is “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”.

This newsflash provides a high level overview of the proposed changes to US tax law for multinationals and the US’ shift in stance on the efforts of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (hereafter, for ease of reference, the “OECD”) to overhaul international corporate taxation. The overview is predominantly tailored to non-US tax professionals with an interest in, but a basic understanding of, the US corporate tax system.

Whilst the MAT Plan is very much a work in progress and the proposals are likely to be subject to further modification, tax managers and advisers of US multinationals and non-US multinationals operating in the US, are well advised to consider the potential impact of the proposed changes. Significant reforms are on the horizon.

Read the full Newsflash here.