United States: The Largest Tax Reform In 30 Years

On December 20, 2017, Congress passed the bill informally known as the "Tax Cuts and Jobs Act", and on December 22, 2017, the president signed it into law as Public Law 115-97 (the "Tax Reform Act" or the "Act"). The final version of the law is based mostly on the previous Senate bill, but has many significant modifications. This Stroock Special Bulletin discusses certain significant provisions in the Tax Reform Act, and how they may impact individuals and businesses starting in 2018.

Individual Taxation

For individual taxpayers the Act provides numerous changes. The tax rates are generally lowered, the bracket thresholds are increased (see the chart below), and the highest marginal tax rate is lowered to 37%. The "marriage penalty" is greatly reduced by doubling all of the tax brackets (except for the highest tax bracket) for married taxpayers who file joint returns. The standard deduction is expanded to $12,000 for single individuals, and $24,000 for married taxpayers filing joint returns. The child credit is expanded to $2000 per qualifying child and begins to phase out at a higher income rate of $200,000 ($400,000 for married taxpayers filing jointly) for years 2018 through 2025.

Bracket

Single Individuals

Married Filing Jointly

10%

$0 - $9,525

$0 - $19,050

12%

$9,526 -

$38,700

$19,050 -

$77,400

22%

$38,701 -

$82,500

$77,401 -

$165,000

24%

$82,501 -

$157,500

$165,001 -

$315,000

32%

$157,501 -

$200,000

$315,001 -

$400,000

35%

$200,001 -

$500,000

$400,001 -

$600,000

37%

Over $500,000

Over $600,000

For individuals, the Tax Reform Act keeps the alternative minimum tax ("AMT") in place, but increases the exemption amount for years 2018 through 2025. The exemption increases to $70,300 for single taxpayers (up from $54,300 in 2017), and to $109,400 for married taxpayers filing jointly (up from $84,500 in 2017). Also, the income thresholds at which this AMT exemption begins to phase out are increased to $500,000 for single taxpayers (up from $120,700 in 2017) and $1 million for married joint filers (up from $160,900 in 2017). The AMT exemptions and  phase out thresholds will adjust annually for inflation (using the chained CPI-U index).

Previously, "529 plans" allowed taxpayers to set aside money that would grow, tax-free, for their children's college education. The Tax Reform Act expands the availability of 529 plans to elementary and secondary school education. This expansion will provide a particular benefit to residents of certain states, such as New York, which provide a state income tax deduction for contributions to 529 plans.

The previous House and the Senate versions of the bills would have limited the ability for individuals to exclude gains from the sale of a primary residence. The final version of the Tax Reform Act leaves the law with respect to sales of primary residences unchanged, allowing married taxpayers filing jointly to exclude a full $500,000 (single taxpayers, $250,000) of gain from the sale of a primary residence every two years.

There are, however, some big flies in this tax cut ointment. Personal exemptions ($4050 per person in 2017) are eliminated, and the deduction for state and local income, sales, and property taxes is limited to $10,000 for taxpayers that itemize (married taxpayers that file jointly are probably limited to the same $10,000 as single individuals, although this is not entirely clear). All miscellaneous itemized and many itemized deductions are repealed. The mortgage interest deduction is limited to interest on up to $750,000 of mortgage debt incurred after December 15, 2017 (but the mortgage debt incurred on or before December 15, 2017 remains subject to the higher $1,000,000 limit, and mortgage debt refinanced after December 15, 2017 continues to be deductible to the extent that the replaced debt was deductible). The home equity interest deduction is repealed, even for pre-existing loans. The Act also does not repeal the 3.8% tax on net investment income or the 0.9% additional Medicare tax.

Almost all of the individual tax changes in the Tax Reform Act are scheduled to sunset after 2025. However, the change to inflation adjustments to a "chained CPI-U" is made permanent. Accordingly, if the provisions of the Tax Reform Act are permitted to sunset, not only would tax rates revert to pre-2018 levels, but the bracket thresholds and the exemption amounts would be significantly lower than they would have been in 2026 under the current law, resulting in a potentially very significant tax increase in 2026.

Pass-Through Business Income Taxation

Pass-Through Income Deduction

The Tax Reform Act allows individuals (and trusts and estates) to deduct 20% (a reduction from the 23% in the Senate bill) of "qualified business income" from partnerships, S corporations, and sole proprietorships (the "Pass-through deduction"). The term "qualified business income" means the net amount of items of income, gain, deduction, and loss with respect to any qualified trade or business of the taxpayer, determined in a manner analogous to that used to determine if income is effectively connected with the conduct of a trade or business within the United States. The deduction (which cannot exceed the taxpayer's taxable income) is computed by adding together the income and losses from all of the taxpayer's qualified businesses, and the deduction is available even to taxpayers that take a standard deduction. If there is a net loss with respect to all "qualified business income" for a particular year, such loss is carried over into the next year, to be used to reduce the pass-through income deductions in the next year.

For an individual in the top marginal tax bracket of 37%, this deduction would yield an effective federal tax rate of approximately 29.6% on qualified business income. As described below, however, there are numerous limitations on this deduction that are based on the taxpayer's income, and an individual in the top three tax bracket may not fully benefit from this deduction.

Certain Types of Income Specifically are Excluded

Certain types of income are specifically excluded from being treated as qualified business income. Capital gains or losses, dividends, interest (unless properly allocable to a trade or business), and certain other types of income are all excluded.

Additionally, (A) reasonable compensation payments, (B) any guaranteed payments for services, or (C) any payments for services to partners not acting in their capacity as partners (to the extent described in future regulations) are not included in qualified business income. One can expect that these limitations will create additional incentives to try to reclassify employees as self-employed independent contractors, to reclassify guaranteed payments as profits interests, and to minimize the reasonable compensation payments.

Limitation on Income From Specified Service Businesses

This limitation is imposed on income from certain specified service businesses, which include businesses that perform services in the fields of health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, brokerage services, investing and investment management, trading, or dealing with securities, partnership interests, or commodities, and any trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its employees or owners. Additionally, the trade or business of performing services as an employee is specifically excluded. Many, if not most, pass-through businesses will fall into this category.

The final bill specifically exempts engineering and architecture firms from this limitation, and added to the limitation businesses where the principal asset is the reputation or skill of their owners.

The Pass-through deduction for owners of these personal service businesses is phased out when the owner's taxable income (from all sources and not just from the personal service business) exceeds $157,500 for single taxpayers ($315,000 for married taxpayers who file jointly) and is completely eliminated when the taxable income reaches $207,500 for single taxpayers ($415,000 for married taxpayers who file jointly).

Limitation Based on the W-2 Wages and Capital of a Qualified Trade or Business

The second limitation is based on the W-2 wages and capital of a qualified trade or business. In general, the Pass-through deduction with respect to income from a qualified trade or business cannot exceed 50% of the W-2 wages paid with respect to that trade or business. In contrast to the previous versions of the bill, the Tax Reform Act adds a second test based on a combination of W-2 wages and capital invested, which is designed to benefit capital intensive businesses that do not pay a lot of wages (i.e., real estate investments). Under the Tax Reform Act, the limitation is the greater of (a) 50% of the W-2 wages paid with respect to the qualified trade or business, or (b) the sum of 25% of the W-2 wages with respect to the qualified trade or business plus 2.5% of the unadjusted basis, immediately after acquisition, of all qualified property.

For example, a married taxpayer with income exceeding $600,000 has a 15% interest in a partnership conducting real estate business. The partnership buys a piece of commercial real estate for $10,000,000 and places it in service in 2018. The partnership has no employees in 2018, and earns $500,000 of qualified business income in 2018, with $75,000 of such income allocated to the taxpayer. The W-2 wage limitation on the taxpayer in 2018 is the allocable share (15%) of the greater of (a) 50% of W-2 wages ($0), or (b) the sum of 25% of W-2 wages ($0) plus 2.5% of the unadjusted basis of the real estate immediately after its acquisition ($250,000). The amount of the W-2 wage and capital limitation on the taxpayer's deduction is $37,500 (15% of $250,000). The allocable share of the qualified business income is $75,000, and the amount of the 20% Pass-through deduction is $15,000.

Because the limitation ($37,500) is greater than the deduction ($15,000), the full $15,000 is deductible from the income. As a result, the taxpayer will report only $60,000 of income from this partnership, which will be subject to tax at 37% rate, which results in an effective rate of 29.6%. If this business is also a "specified service business," then the entire deduction would be disallowed because the taxpayer's income exceeds the threshold of $415,000.

The definition of "qualified property" becomes very important for this purpose. Qualified property means tangible property that is subject to allowance for depreciation under Section 167, and (a) which is held by, and available for use in, the qualified trade or business at the close of the taxable year, (b) which is used at any point during the taxable year in the production of qualified business income, and (c) the depreciation period for which has not ended before the close of the taxable year. For this purpose, the depreciation period is measured from the date the taxpayer placed the property into service and is the longer of (x) 10 years, or (y) the depreciation period under Section 168 (without regard to Section 168(g)). There are a lot of unanswered questions in the legislative text, which will need to be resolved by Treasury Regulations, including: (i) application of the limitation for a short taxable year, (ii) application where the taxpayer acquires or disposes of the business during the year, (iii) application to acquisitions of property from related parties, sale-leaseback or other transactions with potential to manipulate the basis of the property, and (iv) application to property acquired in like-kind exchanges or involuntary conversions.

The limitation based on W-2 wages and capital does not apply to owners with taxable income (from all sources and not just from the business) that does not exceed $157,500 for single taxpayers ($315,000 for married taxpayers who file jointly). This limitation in phased in for taxpayers with incomes between $157,500 and $207,500 for single taxpayers (between $315,000 and $415,000 for married taxpayers who file jointly), and the limitation applies fully for taxpayers with incomes exceeding $207,500 for single taxpayers ($415,000 for married taxpayers who file jointly).

One should keep in mind that just because the limitation applies, it does not mean that the deduction will be limited, because the limitation amount may be greater than 20% of the qualified business income.

The following table summarizes the application of these limitations. Taxpayer's Taxable Income

Specified Service Business Limitation

W-2/Capital Limitation

Income less than $157,000 ($315,000 if married)

Full deduction is allowed, subject to other limitations.

Full deduction is allowed, subject to other limitations.

Income between $157,500 and $207,500 (between $315,000 and $415,000 if married)

Partial deduction is allowed

Deduction is allowed, but is reduced to the extent it exceeds the partial W- 2/Capital limitation.

Income in excess of $207,500 ($415,000 if married)

No deduction is allowed

Deduction is allowed, but is reduced to the extent it exceeds the full W-2/Capital limitation.


master limited partnerships or REITs. For example, dividends from a REIT with no W-2 wages will still be eligible for the Pass-through deduction regardless of the income of the taxpayer. One can expect that this treatment may create an additional incentive to organize investments in the form of a REIT or a publicly traded partnership.

Withholding Tax on Dispositions by Foreign Partners

The Tax Reform Act effectively codifies the holding of the controversial Revenue Ruling 91-32. In that ruling the IRS stated that a foreign partner's gain from the sale or disposition of an interest in a partnership is treated as effectively connected income (usually subject to U.S. taxation) to the extent that the gain is attributable to partnership assets that would have generated effectively connected income if sold by the partnership. The Tax Reform Act adds a new provision in Section 864(c)(8) which effectively restates and codifies the position of the Revenue Ruling 91-32.

The U.S. tax on the foreign partner's disposition of partnership interest is enforced by a new withholding requirement imposed by the new Section 1446(f). The transferee of a partnership interest is now required to withhold 10% of the amount realized on the disposition if the gain on such disposition would be treated as effectively connected under the new Section 864(c). Moreover, if the transferee fails to withhold, the partnership itself is required to withhold the required withholding amount (plus applicable interest) from distributions to the transferee partner.

As a result of these provisions, transferees of partnership interests should request an affidavit of non-foreign status from the transferor. The partnership agreements should include provisions to protect the partnership and the other partners from the risk that some partners may inadvertently fail to comply with their new withholding responsibility.

Partnership Technical Termination

The Tax Reform Act repeals the "technical termination" rule which previously treated partnerships as terminating if within a 12-month period there is a sale or exchange of 50% or more of the total interest in the partnership's capital and profits.

Treatment of Carried Interests

The Tax Reform Act does not change the general treatment of carried interests under current law, but imposes a longer three-year holding period for capital gain treatment. This provision is expected to have a lesser impact on real estate and private equity funds, than on hedge or short-term hold funds. A separate Stroock bulletin will discuss certain issues relating to carried interests after the Tax Reform Act.

Excess Business Losses

Under the Tax Reform Act, for taxable years starting after December 31, 2017 and before January 1, 2026, excess business losses (i.e., the excess of (i) aggregate deductions, over (ii) gross income and gain from trades or businesses of a taxpayer plus $250,000 for single taxpayers or $500,000 for married taxpayers who file jointly) are not deductible or available to offset non-business income, including passive activity income. Excess business losses may instead be carried forward as an NOL.

Corporate Taxation – 21% in 2018

The Tax Reform Act reduces the top marginal corporate rate from 35% to 21% for tax years beginning after December 31, 2017. The corporate AMT is repealed and the AMT credit will offset regular tax liability for any tax year. For taxable years beginning after 2017 but before 2022, the AMT credit is refundable in an amount equal to 50% of the excess of the minimum tax credit for the taxable year over the amount of credit allowed for the year against regular tax liability. In the case of a taxable year beginning in 2021 the AMT credit is refundable in an amount equal to 100%.

International Taxation

Participation Exemption and Repatriation Tax for Existing E&P

The Tax Reform Act shifts the U.S. corporate tax system closer to a territorial system by providing a participation exemption for foreign-sourced dividends paid by a foreign shareholder to a 10% U.S. shareholder which held the foreign corporation's stock for at least 365 days. This exemption, however, is unavailable for hybrid dividends (dividends that are deductible in the country of the paying company) and requires a stock holding period of at least 365 days during the 731-day period beginning on the date that is 365 days before the date on which the share becomes ex-dividend with respect to the dividend.

In order to transition to the "participation exemption" system of taxation, the Tax Reform Act provides for a one-time tax on all unrepatriated and previously untaxed earnings and profits of specified foreign corporations at the rate of approximately 15.5% for cash and other liquid assets and approximately 8% for reinvested earnings. For this purpose, the term "specified foreign corporation" includes (i) any controlled foreign corporation ("CFC") that is not also a passive foreign investment company ("PFIC") and (ii) any foreign corporation with respect to which one or more domestic corporations owns, directly, indirectly, or by certain attribution rules, at least 10% of the vote. The tax on unrepatriated income may be paid in installments of 8% of the amount of tax for the first 5 years, 15% in the sixth year, 20% in the seventh year, and the remaining 25% in the eighth year.

Foreign Tax Credits

The Tax Reform Act repeals the indirect foreign tax credit for dividends received from a foreign corporation, retains the indirect foreign tax credit for Subpart F inclusions, and sources income from the sale of inventory based on where production of the inventory occurs.

Modifications of CFC and Subpart F Provisions

Notwithstanding the general territoriality rule, the Tax Reform Act will tax a U.S. shareholder's share of a CFC's "global intangible low-taxed income," or "GILTI," at a 10.5% rate. GILTI is active income in excess of an implied return of 10% of the CFC's adjusted basis in tangible depreciable property used to generate the active income. In addition, a special deduction applies to the intangible income of a U.S. corporation derived in connection with foreign sales or foreign use (effectively a "patent box"), which reduces the effective U.S. federal corporate income tax rate on such income to approximately 13.125%. The Act also exempts a CFC from recognizing gain on the distribution of intangible property to a U.S. shareholder that is a corporation if made by the CFC before the last day of the third tax year of the CFC beginning after December 31, 2017.

The Tax Reform Act also makes a very slight, but very important change to the definition of "U.S. Shareholder" for purposes of the application of Subpart F provisions. Under the new definition, "U.S. Shareholder" is a person who owns at least 10% of the vote or value of the foreign corporation, as opposed to the previous rule that required at least 10% of the vote. Another significant change is that certain stock owned by foreign persons may now be attributed to a U.S. person for purposes of making the U.S. person a "U.S. Shareholder" for CFC purposes. Many existing corporate structures will have to be reexamined and modified in light of these changes.

Base Erosion

A new Base Erosion and Anti-Abuse Tax ("BEAT") tax imposes a "base erosion minimum tax." For purposes of this minimum tax, taxpayers are required to (i) calculate 10% (5% for tax years starting in 2018, and 12.5% for tax years starting after 2025) of their taxable income after adding back deductions for deductible payments to foreign affiliates and a portion of any net operating loss carryforwards and (ii) calculate the taxpayer's tax liability reduced by any tax credits claimed by the taxpayer (other than the R&D credit and certain provisions of the business tax credit, including 80% of the investment tax credit and production tax credit for renewable energy). If (i) is greater than (ii), the taxpayer must pay the difference as a tax. The base erosion minimum tax applies to domestic corporations that have annual gross receipts in excess of $500 million (for the three prior tax years) and that have a "base erosion percentage" of at least 3% or higher (2% for financial group member) for the taxable year.

Insurance Provisions

The Act has special rules relating to the computation of life insurance reserves for tax purposes, the apportionment of the dividends received deduction ("DRD") between life insurance companies and their policyholders, and the amortization of specified policy acquisition expenses (the so-called DAC tax). It generally follows the Senate version of the bill, with very slight numerical adjustments. Under the Act, the life reserves generally would be 92.81% of the statutory reserves (with a special rule for the interest rate used to discount them) and the difference for old contracts between the new reserve and the old reserve would be taken into income (or deducted) ratably over 8 years; the portion of the DRD allocated to life companies would be 70% of the total; and the DAC tax would be increased by lengthening the amortization period from 10 to 15 years and by increasing the amount subject to amortization from 1.75% of annuity premiums to 2.09% and from 7.7% to 9.2% in the case of life contracts (with a different rate for group life contracts). The BEAT provisions also affect reinsurance with foreign affiliates, though a Senate colloquy indicates that at least with "modco" and "funds withheld" arrangements, the minimum tax addback is computed on a net basis.

Taxation of Energy Projects

The Act does not directly change any tax credits or other incentives for the energy industry. However, it makes subtle changes that will indirectly and significantly affect the energy industry. The "base erosion minimum tax" described above may adversely affect the renewable energy industry. For taxpayers such as large multi-national banks, which historically have claimed a significant amount of the renewable energy tax credits, the inability to use tax credits to fully offset the tax liability under the base erosion minimum tax will make the tax credits significantly less valuable for such taxpayers. In effect, this could operate as a partial clawback of the tax savings associated with the investment and production tax credits, including for tax credits for already completed projects. Moreover, the ability to use these tax credits to offset tax liability under the BEAT tax sunsets after 2025.

Under the Tax Reform Act, owners of master limited partnerships ("MLPs") that are publicly traded partnerships (not treated as corporations) will benefit from reduced tax rates with respect to their share of the MLP's income because of the Pass-through deduction described above. The final version of the Act allows this deduction without regard to the W-2 wages limitation, ensuring that the passive investors in MLPs gain the full benefit of the reduced Pass-through deduction.

Tax Exempt Organizations

The final version of The Tax Reform Act does not include the previous proposals to subject state and local entities (including state pensions plans) to the rules governing Unrelated Business Taxable Income ("UBTI"), which would have subjected such entities to a tax on income derived from a trade or business that is not substantially related to such entity's tax exempt purpose.

Previously, private universities were not subject to the tax that private foundations paid on their investment income. The Tax Reform Act imposes a 1.4% excise tax on the "net investment income" of a private institution of higher education if the institution has at least 500 students more than 50% of which are located in the United States and  the aggregate fair market value of the institution's assets (other than assets used directly in carrying out its educational purpose) is at least $500,000 per student.

Previously, tax-exempt organizations could net their losses from one UBTI generating trade or business against gains from another unrelated trade or business and pay tax only on the net gains. The Tax Reform Act requires a tax-exempt organization to calculate UBTI separately for each trade or business in which it has an interest and does not allow such netting. However, losses generated before January 1, 2018 will be grandfathered and may reduce gains in subsequent years.

Other Significant Business Taxation Changes

  • The deduction for net business interest expense is limited to 30% of the taxable income (subject to certain adjustments).
  • Corporate net operating losses carryforwards incurred after 2017 cannot be used to offset more than 80% of the taxable income for the year.
  • There are new accelerated depreciation rules for businesses.
  • The timing of tax income recognition for certain accrual method taxpayers is accelerated.

Conclusion

Stroock tax attorneys have been closely monitoring the development of the Tax Reform Act, which is the single most significant change to the federal tax laws since 1986. Most individuals, pass-through businesses, and corporations will need to take these changes into account, but the Tax Reform Act creates many unresolved issues that will need to be addressed by subsequent legislation or by administrative regulations. We are available to discuss any questions you may have regarding this Tax Reform Act and its effect on your tax planning.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Seyfarth Shaw LLP
Duane Morris LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Seyfarth Shaw LLP
Duane Morris LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions