U.S. Tax Reform – International Provisions | Highlights for non-U.S. taxpayers

On December 22, 2017, the U.S. President signed into law new tax reform legislation called the “Tax Cuts and Jobs Act of 2017” (the “Tax Act”), launching the most far reaching reform of U.S. tax rules in over 30 years.  This Client Alert summarizes the key international provisions of the Tax Act that could significantly impact our cross border clients with U.S. inbound or outbound business.  We are closely analyzing the new legislation and, in the coming weeks, will be releasing detailed client alerts focusing on specific aspects of the international provisions that will impact European businesses with U.S. nexus, including investment and financing structures.

In a nutshell, the international provisions of the Tax Act:

• Subject all 10% U.S. shareholders of a foreign corporation to an immediate but reduced tax on the accumulated earnings of the foreign corporation through a one-time deemed repatriation of those earnings
   
• Permit tax free repatriations of future foreign profits of foreign corporations to their 10% corporate U.S. shareholders via  new participation exemption
   
• Expand the scope of the anti-deferral Subpart F regime, including a new category of currently taxed income called “global intangible low-taxed income”
   
• Introduce new anti-abuse provisions designed to prevent U.S. tax base erosion and income shifting to foreign affiliates.

Click on the file below to read the full Client Alert.