Report on recent US international tax developments - 2 August 2024

The US Senate this week adjourned for the congressional August recess, joining the House which adjourned last week until it returns on 9 September. In one of its final acts before leaving Washington, the Senate voted not to begin consideration of the House-passed Tax Relief for American Families and Workers Act (H.R. 7024) package. The 1 August procedural vote failed as expected in the Senate. The vote was 48-44, with 60 votes required.

The bill would expand the Child Tax Credit and Low-Income Housing Credit and address the TCJA pre-cliffs on IRC Section 174 five-year (research and development (R&D) amortization, IRC Section 163(j) interest deductibility and tax treaty benefits with Taiwan, among other measures. The bill originally passed the House on 31 January.

With the 1 August procedural vote failing to garner sufficient support, it is unlikely that the Senate will pass the bill, at least before the November election, though Senate Majority Leader Chuck Schumer (D-NY) expressed some hope for reconsideration after the August recess.

G20 Finance Ministers and Central Bank Governors issued a communique (pdf) on 26 July following their meeting in Rio de Janeiro, reiterating their support for the BEPS 2.0 project. The statement welcomed the major progress to implement Pillar Two and expressed support for "implementing the Global Anti-Base Erosion Rules as a common approach." The communiqué also called on Inclusive Framework members to finalize negotiations on a Pillar One package — specifically, a framework for Amount B, which would allow for the finalization and signing of the Multilateral Convention. A Global Tax Alert provides details.