President Donald Trump and Republican leaders in Congress are addressing profit-shifting schemes that involve transfer pricing, earnings stripping and tax inversions. According to Reuters, a decision on on how to handle these in tax legislation could be announced already in June.
The border adjustment measure tries to change the current tax code that allows companies to build goods in low-tax countries and then import those goods to the US. It intends to boost U.S. manufacturing by taxing such imports and allowing U.S. business exports to be exempt from corporate taxation. Earlier this year, U.S. President-elect Donald Trump said that the border adjustment provision was too complicated: “Anytime I hear border adjustment, I don’t love it. Because usually it means we’re going to get adjusted into a bad deal. That’s what happens...”
Last week, Senate Finance Committee Democrats asked Treasury Secretary to leave in place regulations to combat earnings stripping and tax inversions that were adopted under President Barack Obama administration, Reuters informed. Currently, none of the options regarding boarder-adjustment tax have enjoyed consensus support in Congress, according to the lobbyists.
"Aside from BAT, which taxes imports but not exports, tax reform discussions are also looking at a minimum tax on profits from tax havens, a tax on intangible income and other measures to discourage companies from shifting profits to low-tax countries where they do little actual business, according to aides and lobbyists," Reuters reported.
According to Reuters, a decision on new tax legislation could come before Congress leaves town for its one-week July 4 recess on June 29.
TPA Global has developed a practical roadmap of 6 steps meant to guide CFOs in their Journey of rising above troubles to reach a situation of full control. These steps are presented in a series of short video clips (3-5 minutes):
Are you in control - TP Compliance Deadlines to look out for in 2018
Thursday, January 25, 2018 | 04:00 PM - 05:00 PM (CET)
US Tax Reform – Context, New Tax Concepts, and Impact on Your Business Models
Tuesday, January 30, 2018 | 04:00 PM - 05:00 PM (CET)
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