A White House proposal that would
require U.S. multinational corporations to pay a minimum tax on their overseas
profits is designed to make the corporate system fairer and discourage
companies from moving to lower-tax jurisdictions.
The new tax would be designed to
prevent other countries from attracting American businesses through low tax
rates and the savings would be invested in cutting taxes in the United States,
according to a fact sheet released by the White House.
The plan also will include a revenue-neutral
package of measures that officials say will support manufacturing while
discouraging outsourcing and encouraging“insourcing.”
The provisions include:
1.
Ending the tax deduction for moving
expenses for companies that move overseas
2.
Support to cover moving expenses for
companies that close production overseas and bring jobs back to the United
States
3.
Reinstating the expired Section 48C
Advanced Energy Manufacturing Tax Credit
4.
Closing a loophole that allows
companies to shift profits overseas (raises $23 billion): Corporations
right now can abuse the tax system by inappropriately shifting profits
overseas from intangible property created in the United States.
5.
Making companies pay a minimum
tax for profits and jobs overseas through eliminating tax incentives to
ship jobs offshore by ensuring that all American companies pay a minimum tax on
their overseas profits. (possibly a minimum tax on foreign Trade
or Business Income?) and
6.
Cracking down on overseas tax
avoidance and loopholes, includes signing into law the Foreign Account Tax
Compliance Act (FATCA), which targets tax evasion by U.S. citizens holding
investments in foreign accounts, as well as measures to crack down on abuse of
foreign tax credits through games that allowed multinational companies to
inappropriately reduce the amount of taxes they paid here at home.
For a text of the fact sheet released by the White House go to BNA: http://op.bna.com/dt.nsf/id/emcy-8qupfa.
Ways and Means Still Considering Subpart F Exceptions Under Territorial System, Aide Says
ReplyDeletePosted February 2, 2012, 2:51 P.M. ET
Two Subpart F exceptions remain under consideration as the House Ways and Means Committee reviews a discussion draft that proposes a territorial tax system, a senior committee aide said Feb. 2.
Ray Beeman, Ways and Means tax counsel and special adviser for tax reform, said the committee is still looking at both the active financing exception and a lookthrough provision for controlled foreign corporations.
Speaking at a conference sponsored by the Practising Law Institute, Beeman said the exceptions are still being considered, but “we're holding off on what we might do there until we know where we're headed on base erosion.”
Under one of three options to limit revenue losses under the plan, low-taxed cross-border foreign income would be treated as Subpart F income. The committee is likely to take a more comprehensive look at Subpart F in general once it works out questions on the base erosion provisions, Beeman said.