Annual reviews are now being discussed, with employees wondering what technical goals and objectives lie ahead.
Most importantly, the art of leadership skills and training should be a required attribute on everyone’s agenda. There are books for self-learning, and also real-time training can be conducted via leading small cross-functional meetings, being a champion on projects for coordination, and team activities
Leadership and developing leadership skills, in addition to requisite technical abilities, are what will make the difference for everyone.
As a further update to the US Tax Act, SEC has provided a 1-year window to provide a reasonable estimate with continual true-ups for a 1-year period to finalize the complex tax accounting effects. Note that APB 23 is still alive, which has prompted several questions on its application against the background of the deemed repatriation transition tax.
The Act will significantly change earnings disclosures in the near future and the US debt market where debt may be more expensive due to interest limitations.
EY’s update provides details and relevant links for reference.
McDermott Will & Emery highlights the state tax effects of the deemed repatriation and GILTI tax; some of which may not may be intuitive. The deemed repatriation income is included under Sec. 951(a), whereas the GILTI inclusion is includable under new Sec. 951A.
The concept of special deductions also is highlighted for further analysis.
Note, as different technical details of this bill are further reviewed, the SIT aspect becomes even more complex with timing issues by states not uniform from the federal changes.
The deemed repatriation inclusion will be includable in 2017 US federal income tax returns for calendar-year taxpayers, whereas most provisions will take effect in 2018 or later.
The House and Senate conferees agreed at the end of last week on a reconciliation bill to be forwarded this week for a final vote, and then signature (i.e. “enactment”) by President Trump. An excellent summary of some key corporate provisions is included by McDermott, Will & Emery, and the actual text of the bill is linked for reference.
The complexity is abundant for year-end public company reporting, especially by US MNE’s, including a complex calculation of the accumulated foreign earnings upon which the one-time transition tax will apply.
It is not too soon to begin a discussion with auditors re: expected deliverables, especially concerning the practical aspects of the calculations that will be involved for year-end and the first quarter of 2018.
It is both a challenging and exciting time to be an international tax practitioner/advisor, as this is a revolutionary change in the history of US tax reform for all.
The Council of the European Union (ECOFIN) has published its list of uncooperative tax jurisdictions, numbering 17:
American Samoa, Bahrain, Barbados, Grenada, Guam, Korea (Republic of), Macao SAR, Marshall Islands, Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Trinidad and Tobago, Tunisia and the United Arab Emirates
The listing criteria are focused on three main categories: tax transparency, fair taxation and implementation of anti-BEPS measures.
There are potential counter-measures that could be employed by other jurisdictions, and there is the possibility of other countries aligning such countries on a comparable list. This list will be reviewed annually, thereby expanding or diminishing accordingly.
EY’s Global Tax Alert provides historical context for development of this list.
Amid the last-minute penciled-in amendments and heated discussions, the Senate Bill was narrowly passed by a vote of 51-49, with the text referenced herein.
The bill now moves to a reconciliation phase between the House and Senate, with such bill potentially forwarded to the President for signature before Christmas.
Several amendments were passed, including a phase-out of the corporate property expensing provision after 2022, reinstatement of corporate AMT and an increase of the deemed repatriation tax for accumulated foreign earnings (thereby achieving greater tax revenues for passage).
The 479-page bill is still incredibly complex, in effect layering upon the present US tax rules in many areas, and the final reconciliation stage will produce additional changes. However, it is expected that the Senate’s provisions will largely remain in place as the votes are more critical for passage and major shifts in an already contentious bill may point to possible defeat of the bill, which President Trump is not willing to accept.
Next stage after passage: A review, starting now, of earnings and profits, etc. that will drive the relevant tax accounting adjustments required for year-end closing of the books for calendar-year taxpayers due to “enactment” of the bill prior to Dec. 31st.