“President Donald Trump had initially called for a top rate around 10 percent for companies’ offshore profits, but as GOP lawmakers searched for revenue to offset the cost of other tax cuts, one of the sources they settled on was multinationals’ offshore cash,” Browning reports. “Under the GOP tax plan that’s headed for votes in the House and Senate next week, earnings that companies hold offshore as cash and cash equivalents would be taxed at 15.5 percent. Income invested in less-liquid assets — including plants and equipment — would be taxed at 8 percent. Both taxes would be mandatory, not optional.”
Browning reports, “Under current law, companies can defer paying U.S. income taxes on their foreign earnings at the corporate rate of 35 percent until they return, or ‘repatriate,’ them to the U.S. The deferral provision has led companies to stockpile those earnings overseas.”
Read more in the full article here.
MacDailyNews Take: Expect investment in plants and equipment, obviously.
As we wrote yesterday, “We’d bet large multinationals would take a bit of a hit on repatriation in exchange for finally moving to a territorial system.”
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