Skip to content

Tax Reform

On September 19, 2025, the IRS published proposed regulations to implement and provide guidance regarding new Section 224, enacted as part of the One Big Beautiful Bill Act (P.L. 119-21).  The proposed regulations define qualifying payment methods, jobs that customarily receive tips, and exclusions from the deduction.Continue Reading No Tax on “Qualified” Tips:  IRS Issues Proposed Regulations on Tipped Income Deduction

Next week, the House of Deputies of the Brazilian National Congress may vote a potentially historic tax reform, revamping a tax system that has been in place since the 1960s and has increased in complexity, inefficiency, and compliance cost over the years. The reform has been debated for nearly three decades and is widely perceived as key to increase Brazil’s competitiveness by making the tax system simpler, more transparent, and less burdensome for businesses.

By adopting a full-fledged, value-added tax approach, the reform will likely result in a decreased tax burden for companies with longer supply chains, such as manufacturers, while potentially increasing the current tax burden for companies with a shorter supply chain, such as those in the agribusiness and services sectors.

The proposal encompasses two main areas: a complete reform of the taxation of consumption and a partial reform of property taxes. Other aspects of the tax system, in particular taxing of income, payroll, and financial transactions, are not included in the proposal.

Consumption Taxes Changes

In the area of consumption, the reform will merge five federal, state, and municipal taxes into a so-called “dual” value-added tax (VAT), charged both at the national and subnational levels.

At the national level, the VAT will be called Contribution on Goods and Services (CBS) and will be the result of the following three existing taxes, merged:

  • Federal tax on manufactured goods (IPI);
  • Federal contribution for the financing of Social Security (COFINS); and
  • Federal contribution for the financing of the private sector Social Integration Program (PIS).

At the subnational level, the VAT will be called Tax on Goods and Services (IBS) and will be the result of the following two existing taxes, merged:

  • State tax on the movement of goods and services (ICMS); and
  • Municipal tax on services (ISS).

Continue Reading Key Vote Expected on Brazil’s Historic Tax Reform

On August 9, 2022, President Biden signed into law the CHIPS and Science Act—a massive, $280 billion bill to boost public and private sector investments in critical and emerging technologies.

We anticipate significant opportunities and an evolving regulatory landscape for companies, associations, universities, and others who work in various technology sectors, including:

  • High performance computing, semiconductors, and advanced computer hardware/software
  • Advanced communications technology and immersive technology
  • Advanced energy and industrial efficiency technology (including batteries, nuclear)
  • Advanced materials science (including composites 2D and next-generation materials)
  • Artificial intelligence, machine learning, autonomy, and related advances
  • Quantum information science and technology
  • Biotechnology, medical technology, genomics, and synthetic biology
  • Data storage/management, distributed ledgers, and cybersecurity (including biometrics)
  • Natural and anthropogenic disaster prevention or mitigation
  • Robotics, automation, and advanced manufacturing

Below is an overview of the legislation and the funding and tax credit opportunities it provides for entities that participate in the research, development, production, education, or transfer of critical and emerging technologies, especially semiconductor manufacturing and research and open-RAN technology.

Overview

Headlining the bill are $54 billion in appropriations to fund the Creating Helpful Incentives to Produce Semiconductors (“CHIPS”) for America Act, which was authorized in 2021. The bill also includes $1.5 billion in appropriations for a wireless supply chain innovation fund under the Utilizing Strategic Allied Telecommunications Act, which was similarly authorized in 2021. Across these two sets of appropriations, over $40 billion are allocated for direct financial assistance in the form of competitive grants for which private companies will be able to apply. The law also authorizes over $200 billion in new programs across the federal government, paving the way for additional grants, public-private partnerships, and technology transfer opportunities.Continue Reading Significant Funding and Tax Credit Opportunities in the CHIPS and Science Act

Earlier this week, the IRS issued long-awaited proposed regulations under Section 162(m) of the Internal Revenue Code.  Our colleagues at Covington’s Tax Reporting & Withholding Blog published a comprehensive summary and analysis of the proposed regulations.  As you will see, the proposed regulations fell short of proposing workable solutions for

…
Continue Reading IRS Proposes Sweeping § 162(m) Regulations

With the recent plethora of new tariff measures aimed at imports of steel, aluminum, solar panels, aircraft, and a wide array of products from China, tariffs are affecting the bottom lines of American companies in a way not seen in decades.  For importers seeking tariff mitigation options, a window of…
Continue Reading ITC Issues Notice for Petitions for the 2019 Miscellaneous Tariff Bill Cycle”

The Internal Revenue Service (IRS) must adhere to public notice-and-comment procedures before it can relieve certain tax-exempt organizations of the burden of reporting the names and addresses of their donors to the IRS, a Montana federal court ruled this week.  Last year’s Revenue Procedure 2018-38 provided that tax-exempt organizations, other

…
Continue Reading Montana Federal Court Halts IRS Policy that Eliminated Reporting of Donor Information

On 19 September 2018, the European Commission (“Commission”) issued a press release declaring that Luxembourg did not provide illegal State aid to McDonald’s with regards to two tax rulings that resulted in double non-taxation of franchise profits in Luxembourg. The Commission’s three-year-long in-depth investigation established that Luxembourg had merely acted…
Continue Reading The European Commission finds no illegal State aid was provided by Luxembourg’s non-taxation of McDonald’s

In a significant and unexpected development, the U.S. Treasury Department announced yesterday that certain nonprofits — including trade associations and 501(c)(4) social welfare organizations — would no longer be required to disclose the names and addresses of their donors on the annual “Form 990” they file with the Internal Revenue…
Continue Reading IRS Announces Major Change To Nonprofit Donor Disclosure Requirements

Washington is awash with lobbyists seeking to address new steel and aluminum tariffs, and other potential tariffs, on behalf of both foreign and domestic clients.  Lobbying on trade issues in some circumstances may trigger Foreign Agents Registration Act (“FARA”) obligations.  The connection between trade lobbying and FARA was the subject

…
Continue Reading New Wave of Trade Lobbying Presents FARA Registration Concerns