Trump Also Proposes 15% Tax Rate For Pass-Through Entities, One Time Repatriation Tax & Switch To a Territorial Tax System

On April 26, 2017 we posted Trump Proposes 15% Corp. Tax Rate & Repeal of 3.8% Obama Tax where we discussed that 15 percent tax rate for corporations, cutting the top individual tax rate from 39.6% to 35%, reducing the number of rates from seven to three and the repeal of a 3.8 percent tax on net investment income are the top priorities in the Trump administration’s tax reform agenda, according to a plan released by the White House today April 26, 2017

On April 27, 2017 we posted Trump Proposes To Repeal Estate Tax, Alt Min Tax and 3.8% Obama Tax where we discussed that it also provides for repeal of:

1. the Estate Tax
2. the Alternative Minimum Tax along will
3. the 3.8 per cent Surtax on investment income (capital gains, interest and dividends) introduced by the Obama administration to fund the Affordable Care Act.

The president's plan also proposes in addition to slashing the top corporate tax rate to 15 percent from 35 percent the following: 

1. 15% Corporate Tax Rate For Pass-Through Businesses

The 15 percent corporate rate would also apply to profits of pass-through businesses, such as S Corporations and LLCs, whose profits currently flow through to individual taxpayers and are taxed at a current rate as high as 39.6 percent.   

2. One-Time Tax on Repatriated Overseas Profits 

A new, one-time tax on the repatriation of previously untaxed overseas profits at a to-be-determined rate, which might be as low as 10 percent or even 3.5 percent, as proposed by certain congressional leaders.  

3 . Conversion From a World Wide Tax System to Territorial Tax System

To convert from the current system of taxation on worldwide profits to a territorial-tax system in which foreign profits are not taxed until repatriated back to the US.

But also see our April /25/17 post Tax Reform Announcement Coming on April 24 but Tax Reform Is 'Impossible' This Year - So Where Does That Leave Tax Advisers?  where we discuss that there may not be enough time to get the tax bill passed in 2017. Warren Payne, a former House Ways and Means Committee policy director now with Mayer Brown LLP, believes that passing tax reform by August will be ‘‘impossible’’ this year. Rather, he suggested during a conference call March 16 that it is more likely to be addressed in early 2018. 

 

 

Have a Tax Problem?

 

Contact the Tax Lawyers at

Marini & Associates, P.A.

 

 for a FREE Tax Consultation Contact US at 

www.TaxAid.com or www.OVDPLaw.com

or Toll Free at 888-8TaxAid (888 882-9243).

 

  

Trump Proposes To Repeal Estate Tax, Alt Min Tax and 3.8% Obama Tax

On April 26, 2017 we posted Trump Proposes 15% Corp. Tax Rate & Repeal of 3.8% Obama Tax where we discussed a 15 percent tax rate for corporations, cutting the top individual tax rate from 39.6% to 35%, reducing the number of rates from seven to three and the repeal of a 3.8 percent tax on net investment income are the top priorities in the Trump administration’s tax reform agenda, according to a plan released by the White House today April 26, 2017.

Upon closer reading it also provides for repeal of the Estate Tax and the Alternative Minimum Tax along will the repeal of the 3.8 per cent Surtax on investment income (capital gains, interest and dividends) introduced by the Obama administration to fund the Affordable Care Act. This will return the top capital gains tax rate and dividend rate to 20 per cent.

But also see our April /25/17 post Tax Reform Announcement Coming on April 24 but Tax Reform Is 'Impossible' This Year - So Where Does That Leave Tax Advisers?  where we discuss that there may not be enough time to get the tax bill passed in 2017. Warren Payne, a former House Ways and Means Committee policy director now with Mayer Brown LLP, believes that passing tax reform by August will be ‘‘impossible’’ this year. Rather, he suggested during a conference call March 16 that it is more likely to be addressed in early 2018. 

 

Have a Tax Problem?

 

Contact the Tax Lawyers at

Marini & Associates, P.A.

 

 for a FREE Tax Consultation Contact US at 

www.TaxAid.com or www.OVDPLaw.com

or Toll Free at 888-8TaxAid (888 882-9243).

 

Trump Proposes 15% Corp. Tax Rate & Repeal of 3.8% Obama Tax

A 15 percent tax rate for corporations, cutting the top individual tax rate from 39.6% to 35%, reducing the number of rates from seven to three and the repeal of a 3.8 percent tax on net investment income are the top priorities in the Trump administration’s tax reform agenda, according to a plan released by the White House today April 26, 2017.

Treasury Secretary Steven Mnuchin and National Economic Director Gary Cohn confirmed rumors that President Donald Trump is sticking to priorities outlined during this election campaign to slash the current 35 percent corporate tax rate by 20 percentage points.

“We will have a massive tax cut for business and massive tax reform and simplification,” Mnuchin said. “The president is determined to unleash economic growth for businesses."

Another significant change that the White House is proposing is a shift to a territorial tax system under which income earned abroad would not be taxed within the U.S. Under the current worldwide system, U.S. corporations are required to pay taxes on all income, regardless of where it is earned.

Mnuchin and Cohn also reiterated Trump’s campaign wish list to allow for a Repatriation of Corporate Income Stored Overseas.

The standard deduction will be doubled to benefit the middle class. However, this benefit would be greatly diminished if it is accompanied by the elimination of certain personal tax exemptions as well, as it was in Trump’s tax package released on the campaign trail.

 

Trump’s plan is silent on the controversial border adjusted tax proposal floated by the House Republicans that is expected to raise approximately $1.2 trillion in revenue by disallowing deductions for import expenses. The BAT has been staunchly opposed by import-heavy retailers and Trump has waffled on the idea in the past few months, labeling it as too complicated.

Democrats are opposed to such significant tax cuts that they say will benefit the wealthiest at the expense of lower-income people, and so, any tax reform bill introduced in Congress will have to be revenue-neutral without raising deficits beyond a 10-year window so that it can satisfy a Senate rule allowing certain measures to pass with a bare majority.

Senate Democratic Leader Chuck Schumer, D-N.Y., said in a statement that Democrats will oppose any proposal from the president that gives massive tax breaks to “the very wealthy” while exploding the deficit.

The White House administration has said that the tax cuts would be paid for through economic growth, but the Tax Foundation, a nonpartisan, right-leaning think tank, has said that cutting the corporate income tax rate to 15 percent alone would reduce federal revenues by about $2 trillion over a decade and the economy would have to grow by an unrealistic 5 percent.

But also see our April /25/17 post Tax Reform Announcement Coming on April 24 but Tax Reform Is 'Impossible' This Year - So Where Does That Leave Tax Advisers?  where we discuss that there may not be enough time to get the tax bill passed in 2017. Warren Payne, a former House Ways and Means Committee policy director now with Mayer Brown LLP, believes that passing tax reform by August will be ‘‘impossible’’ this year. Rather, he suggested during a conference call March 16 that it is more likely to be addressed in early 2018. 

 

Have a Tax Problem?

 

Contact the Tax Lawyers at

Marini & Associates, P.A.

 

 for a FREE Tax Consultation Contact US at 

www.TaxAid.com or www.OVDPLaw.com

or Toll Free at 888-8TaxAid (888 882-9243).

 

Sources:

CNN

The New York Times

Law360








 

IRS Adds Belgium, Columbia & Portugal to Automatic Information Exchange List

Rev. Proc. 207-31 updates Rev. Proc. 2016-56 (published in December 2016) to adds 3 countries:

• Belgium,
• Colombia, and
• Portugal

to the Section 4 list of countries with which the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) have determined that it is appropriate to have an Automatic Exchange of information collected under §§ 1.6049-4(b)(5) and 1.6049-8(a).

Have a Tax Problem?

 

Contact the Tax Lawyers at

Marini & Associates, P.A.

 

 for a FREE Tax Consultation Contact US at 

www.TaxAid.com or www.OVDPLaw.com

or Toll Free at 888-8TaxAid (888 882-9243).

 

  

 

 

 

 

 

 

Tax Reform Announcement Coming on April 24 but Tax Reform Is 'Impossible' This Year - So Where Does That Leave Tax Advisers?

According to Reuters US President Donald Trump has revealed that he will make a major tax reform announcement this Wednesday, 26 April 2017.

We previously posted on March 24, 2017 Breaking News - Possibly No Tax Reform This Year! where we discussed that Donald Trump has proposed tax reforms that would:

• significantly reduce marginal tax rates for both individuals and businesses,
• increase standard deduction amounts to nearly four times current levels,
• limit or repeal some tax expenditures,
• repeal the individual and corporate alternative minimum taxes and the estate and gift taxes, and
• tax the profits of foreign subsidiaries of US companies in the year they are earned.  

So Where Does That Leave Tax Advisers?

 

____________________________________________

 

 

Fast-forward and now it appears that

Tax Reform Is 'Impossible' This Year."

 

Now according to Law360 Businesses that entered 2017 with a high degree of optimism for the prospects of tax reform are now feeling increasingly uncertain following President Donald Trump's latest decision to once again put tax reform on hold while going back to reworking health care policies.

All the talk of tax reform without any substantive action from the president, or even so much as an outline from the White House for tax policy proposals, has tempered the sanguine disposition that businesses had at the start of the year, experts say.

"There is a window in which tax reform can be taken up and that window will close once we get into the election season next year for midterm. I would expect that they have to get something done by the early part of next year or everything might start to get derailed," David Blair, an attorney and chair of Crowell & Moring LLP's tax group, said.
 

Months after Trump promised a phenomenal tax plan, the White House's direction on tax reform is wholly unclear, with mixed messages coming from administration officials. Trump himself has wavered on the centerpiece, and the most controversial part, of the House Republicans' blueprint for tax reform, to not tax exports, while disallowing deductions for import expenses. The proposal is commonly known as the Border Adjusted Tax. Trump has said that he simply does not like the word "adjustment" and equates it to America losing in the trade game.

He has also indicated that he prefers a straightforward tariff on imports at the border to a policy change embedded in the tax code.

Trump's comments have experts scratching their heads trying to figure out if the president merely has a branding issue with the BAT or if he has more substantial policy arguments against the BAT which would meet his goal to incentivize domestic manufacturing.

Trump could very well ultimately come out with a recalibrated version of the BAT proposal. Tax cuts and a plan to encourage businesses to repatriate their offshore earnings are among the other tax policy proposals he has remained firm on. However, the specifics of how he would achieve these goals are still unknown.

 

Have a Tax Problem?

 

Contact the Tax Lawyers at

Marini & Associates, P.A.

 

 for a FREE Tax Consultation Contact US at 

www.TaxAid.com or www.OVDPLaw.com

or Toll Free at 888-8TaxAid (888 882-9243).

 

 

Sources:

Law360

Reuters

Get Ready for The Cayman Islands Beneficial Ownership Register & Reporting Under CRS

We had previously posted on August 10, 2016, Cayman Islands FATCA Reporting of American Depositors is TODAY - Don't Wait Until it is TOO Late to Come Clean! where we discussed that August 10, 2016 was the deadline for Cayman Islands financial institutions to complete their notification and reporting of American Clients' accounts to the Cayman Tax Information Authority, under the US Foreign Account Tax Compliance Act (FATCA).
 

Users of Cayman Islands vehicles which fall within the scope of FATCA, as Reporting Financial Institutions (FFIs), which will include most Cayman funds, are reminded that they had until the previously extended deadline of August 10, 2016, to complete their notification and reporting to the Cayman Tax Information Authority.  

 

Now the Cayman Islands Government has adopted new Amended Regulations to ensure the effective implementation of the Common Reporting Standard (CRS) in the Cayman Islands, which requires reporting to the UK, which can then be shared with the US, by June 30, 2017. 

Notification Requirement

The Amended Regulations now provide that all Cayman Financial Institutions (CFIs), including Non-Reporting Financial Institutions, must file an information notice with the Cayman Islands Tax Information Authority (TIA), the deadline for which has been extended to June 30, 2017 or, if an entity becomes a CFI after that date, then on or before 30 April of the following year.

The information notice must provide certain required information, including the name and CRS classification of the entity, together with comprehensive details of the person authorized to be that entity's principal point of contact for CRS purposes. Any changes to the required information must be notified to the TIA and all notifications must be completed electronically.   

Criminal Liability for CRS Failures 

The Amended Regulations now include various offences and corresponding defenses. The offences include making false self-certifications, intentionally providing inaccurate information, tampering with (altering, destroying, mutilating, defacing, hiding or removing) information, or hindering the TIA from performing its functions concerning CRS.  

Where a CFI has committed an offence, the Amended Regulations also provide for the imputed criminal liability of the directors, managers, secretaries, trustees, general partner and other similar officers of that CFI. 

 

Do You Have Undeclared Income From 

a Grand Cayman Island Account, Entity or 

a Grand Cayman Island Mutual Fund?
 

 

 

Want to Know if the OVDP Program
is Right for You?

Contact the Tax Lawyers at 

Marini & Associates, P.A.  

 

for a FREE Tax Consultation

at: www.TaxAid.com or www.OVDPLaw.com

or Toll Free at 888-8TaxAid (888) 882-9243

Source:

Mourant Ozannes (PDF file)