Tax

• [New] The large rate increase will lead firms to invest less in the UK in the medium run, which will in turn depress economic activity and reduce the revenue generated by the tax rise.
• [New] Interventions targeting the price of alcohol, namely through a higher tax and MUP, are estimated to yield the greatest health impact by reducing the number of new related cancer cases by 174193 and 141175 over years 2020-2050, respectively.
• [New] Men make up a larger proportion of cases for workplace programmes targeting sedentary behaviour, a higher alcohol tax, MUP and food labelling [e.g. for alcohol tax, 90715 (95% CI: 89 160-92 270) vs. 83478 cases avoided by 2050].
• [New] At the individual country level, alcohol taxation has the greatest impact in Austria, Czech Republic and Luxembourg with the proportion of new related cancer cases avoided for years 2020-2050 ranging between 0.51% and 0.55%.
• [New] In the next two years UK companies will be able to carry back trading losses to not just the prior year but the three prior years, subject to a group-level cap at £2m of losses for each of the earliest two years.
• [New] The federal budget deficit - the gap between what the U.S. spends and what it takes in taxes and other revenue - is expected to be 10.3% of gross domestic product in 2021, the second-highest level since 1945.
• [New] To balance the need to raise revenue with the objective of having an internationally competitive tax system, the rate of Corporation Tax will increase to 25%, which will remain the lowest rate in the G7.
• [New] When the two years are up and Corporation Tax rises to 25%, the UK will fall far down the list on international tax competitiveness.
• [New] For the next two years, the American Rescue Plan would expand the tax credits to higher earners and cap the maximum premium anyone is expected to pay at 8.5% of their income.
• [New] Corporation tax in the US might rise from 21% to 28%.
• [New] Ensure R&D costs do not rise for manufacturers - and all American businesses-starting in 2022: The Tax Cuts and Jobs Act, which passed in 2017, made several positive and pro-growth changes to the U.S. tax code.
• [New] The California Competes Tax Credit is an income tax credit available to businesses that want to locate to California or stay and grow in California and create quality, full-time jobs in California that might not otherwise be created by the business of any other business.
• [New] The very poorest countries could use their payments from the global fund to help their people adapt to climate change and reduce incentives for outward migration.
• [New] The UK might benefit from reforming VAT as its revenues are less sensitive to economic downturns than income or corporate taxes.
• [New] The Spanish tax authorities will pursue a more efficient and complete exchange of information both within the European Union and with other countries, such as the United States, to improve FATCA compliance.
• [New] A hefty reduction to UK tax rates after Brexit may appear to be a simple method to entice investment to the UK and many people have predicted that the UK could become a tax haven now the transition period is over.
• The American Innovation and R&D Competitiveness Act will ensure that the United States continues to be the world leader in innovation by repealing a section of the Tax Cuts and Jobs Act that requires amortized of R&D expensing over five years beginning in 2022.
• Another way to make sure Americans earn a living wage, financial experts said, could be by making it easier to qualify for tax breaks, such as the Earned Income Tax Credit.
• The GILTI tax will reduce the corporate profits of U.S. multinational affiliates in haven countries by about 12-16 percent, modestly increasing the tax base in both the United States and in higher-tax foreign countries.
• Devoting tax revenues to support, commercialize and bring down the price of clean energy will enable the U.S. and other societies to transition quickly and massively from fossil fuels.
• The Internal Revenue Service warns US tax professionals of identity thieves actively targeting them in a series of phishing attacks attempting to steal Electronic Filing Identification Numbers.

Last updated: 07 March 2021