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On August 25, Senate Finance Committee Chair Ron Wyden (D-Ore), along with Senators Sherrod Brown (D-Ohio) and Mark Warner (D-Va), released a draft proposal aimed at overhauling the U.S. international tax system.
This new proposal builds on the previously introduced Overhauling International Taxation framework released in April and adds more details about significant potential changes to international tax provisions enacted under the 2017 Tax Cuts and Jobs Act (TCJA). Key provisions addressed include:
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Global Intangible Low-Taxed Income (GILTI)
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Base Erosion and Anti-Abuse Tax (BEAT)
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Foreign Derived Intangible Income (FDII)
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Foreign Tax Credit (FTC) rules
Key Differences: Wyden Proposal vs. Biden Administration’s Green Book
Below is a summary of how the Wyden plan compares to the Biden Administration’s tax proposals:
Global Intangible Low-Taxed Income (GILTI)
| Provision | Wyden Proposal | Biden Administration Proposal |
|---|---|---|
| Effective Date | Tax years of foreign corporations beginning after enactment | Tax years beginning after Dec 31, 2021 |
| Calculation | Country-by-country basis | Country-by-country basis |
| QBAI | Repealed | Repealed |
| High-Tax Exclusion | Country-by-country, ETR threshold based on GILTI rate | Repealed |
| IRC Section 250 Deduction | To be reduced and equalized with FDII | Reduced to raise GILTI effective rate to 21% |