The chairman of the US Senate Finance Committee, Max Baucus (D) has published some proposals for reform of international aspects of the US tax code. There is lots to read here.
This six-page summary is a good place to start. It is probably better to stop before you get to the 85-page technical explanation from the staff of the Joint Committee on Taxation.
One could look for possible implications for Ireland through the references to foreign income, Subpart F, “check the box”, the “same country exemption”, the CFC “look-through rule”, inversions or section 482 (transfer pricing) and other provisions in the US tax code that we have heard about but don’t fully understand. However, there are lots of reasons why this set of proposals may not get very far. Trying to find a word of support in the statement from the chairman of the House Ways and Means Committee, Dave Camp (R) is one and the impending retirement of Baucus in 2014 is another. The point is simply that the debate is not standing still even if actual reform still appears to be a way off.
Here is a report from Bloomberg on the proposals.
4 replies on “Baucus Unveils Proposals for International Tax Reform”
The key issue for Ireland is the minimum foreign tax rate to avoid
companies retaining a tax incentive to shift activities or head offices to low tax locations. This is not new and has been proposed in the past by the Obama administration.
Given that the OECD is pushing for Ireland to apply the 12.5%, a US minimum rate above the Irish headline rate would be bad news.
Also on Thursday, the latest “Paying Taxes” report was published and Ireland along with the UAE and Saudi Arabia have the lowest total business taxes in the world.
Global taxes on labour overtake profit; Ireland among lowest for business taxes
The US authorities will have to be careful they don’t incentivise multinationals to move their HQ offshore.
The impressive Larry Summers comments on corporate taxes at about the 52 min of a recent 55 min Q&A at Harvard.
The rest is also interesting, which dovetails with his comments two weeks ago on stagnation, at the IMF research conference.
everything you ever wanted too-linked below,…ireland was specifically targeted regarding inversions,the last one,Endo was taking the p…
consider it a signpost,the rules will get changed,hopefully retroactively but unlikely.
cheat sheet,cliff notes-NYT deal book.
“Inversions, which occur when a U.S. company reincorporates abroad, have picked up lately as highly-taxed multinationals seek relief in low-tax jurisdictions like Ireland and the Netherlands.”