The United States House Ways and Means Committee has released a 429-page "Tax Cuts and Job Act of 2017" bill. The bill seeks to lower the business and individual tax rates, modernise US international tax rules and simplify the tax law with significant impact on numerous sectors of the economy.
Key areas that may be of interest to non-US based multinational entities include:
- new 20% excise tax on on certain payments (including royalties and cost of good sold) from domestic corporations to related foreign corporations;
- net business interest expense deductions capped at 30% of a business' adjusted taxable income and subject to a global net interest test;
- new limitations on tax treaty benefits;
- reduced business tax rate of 20% and altered how pass-through income is taxed; and
- ability to immediately write off the cost of qualified property (not including structures) acquired and placed in service after September 27, 2017 and before January 1, 2023.
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