A new research provided by Taxand that is based on 136 interviews with financial officers and tax directors concluded that more than half of multinationals have altered their tax plans, or delayed decisions, due to the tax reforms in the U.S.
On April 26, 2017, U.S. President Donald Trump proposed sharp reductions in business tax rates and other significant changes. The newly proposed tax plan intends to reduce the “business tax rate” to 15 percent and move to a territorial tax system, which would exempt foreign-source income from U.S. tax. The corporate income tax rate would be reduced from 35 percent to 15 percent, and a maximum tax rate of 15 percent on pass-through business income would be created. It also enacts a deemed repatriation, at an unspecified rate, of currently deferred foreign-source income.
According to the research, 55 per cent of chief financial officers and tax directors have altered their tax plans, or delayed decisions, due to the U.S. tax reforms. Taxand managing director Tim Wach said it was “unsurprising” that chief financial officers and tax directors were “pausing for thought or altering plans”.
“As we await more thorough proposals, U.S. multinationals are somewhat scrambling in the dark, and are rightly concerned about potential impacts from what may prove to be dramatic tax reform, if Republican plans for a border-adjusted cash flow tax are pursued, or if the much less ambitious Trump proposals are pursued,” he said.
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