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Multinationals grapple with Republican excise tax surprise
Source: Reuters
#BUSINESS NEWS NOVEMBER 5, 2017 / 9:12 AM / UPDATED 7 HOURS AGO
Multinationals grapple with Republican excise tax surprise
Amanda Becker, Tom Bergin
7 MIN READ
WASHINGTON/LONDON (Reuters) - The Republican tax bill unveiled last week in the U.S. Congress could disrupt the global supply chains of large, multinational companies by slapping a 20-percent tax on cross-border transactions they routinely make between related business units.
European multinationals, some of which currently pay little U.S. tax on U.S. profits thanks to tax treaties and diversion of U.S. earnings to their home countries or other low-tax jurisdictions, could be especially hard hit if the proposed tax becomes law, according to some tax experts.
Others said the proposal could run afoul of international tax treaties, the World Trade Organization and other global standards that forbid the double taxation of profits if the new tax did not account for income taxes paid in other countries.
The proposed tax, tucked deep in the 429-page bill backed by President Donald Trump, caught corporate tax strategists by surprise and sent them scrambling to understand its dynamics and goals, as well as whether Congress is likely ever to vote on it.
-snip-
Multinationals grapple with Republican excise tax surprise
Amanda Becker, Tom Bergin
7 MIN READ
WASHINGTON/LONDON (Reuters) - The Republican tax bill unveiled last week in the U.S. Congress could disrupt the global supply chains of large, multinational companies by slapping a 20-percent tax on cross-border transactions they routinely make between related business units.
European multinationals, some of which currently pay little U.S. tax on U.S. profits thanks to tax treaties and diversion of U.S. earnings to their home countries or other low-tax jurisdictions, could be especially hard hit if the proposed tax becomes law, according to some tax experts.
Others said the proposal could run afoul of international tax treaties, the World Trade Organization and other global standards that forbid the double taxation of profits if the new tax did not account for income taxes paid in other countries.
The proposed tax, tucked deep in the 429-page bill backed by President Donald Trump, caught corporate tax strategists by surprise and sent them scrambling to understand its dynamics and goals, as well as whether Congress is likely ever to vote on it.
-snip-
Read more: http://www.reuters.com/article/us-usa-tax-multinationals/multinationals-grapple-with-republican-excise-tax-surprise-idUSKBN1D50P6