On 28 March 2022, the Treasury Department of United States published details of tax proposals in the administration’s budget recommendations for FY 2023 in the “GreenBook.” The Greenbook describes following tax measures related to corporate taxation.
- Raise the Corporate Income Tax Rate from 21 percent to 28 percent.
- Adopt the Undertaxed Profits Rule
- Provide Tax Incentives for Locating Jobs and Business Activity in the United States and Remove Tax Deductions for Shipping Jobs Overseas
- Prevent Basis Shifting by Related Parties through Partnerships
- Conform Definition of “Control” with Corporate Affiliation Test-The proposal would conform the control test under section 368(c) with the affiliation test under section 1504(a)(2). Therefore, “control” would be defined as the ownership of at least 80 percent of the total voting power and at least 80 percent of the total value of stock of a corporation. The proposal would be effective for transactions occurring after December 31, 2022.
- Expand Access to Retroactive Qualified Electing Fund Elections
- Expand the Definition of Foreign Business Entity to Include Taxable Units
