House Ways and Means Committee Chairman Kevin Brady (R-TX) released a listening session framework for “Tax Reform 2.0.” This framework launches the listening sessions that will occur with lawmakers and constituents back home as Ways and Means Republicans work to make our new pro-growth tax code even stronger for our families and Main Street businesses.
Upon releasing this framework, Chairman Brady said:
“Every day, businesses wake up and ask themselves ‘how do we become more competitive, innovative, and better?’ That practice has always been foreign to Washington—that ends now. With this framework, we are taking the first step to change the culture in Washington D.C. where tax reform only happens once a generation. We plan to work off this framework to build on the growing successes of the Tax Cuts and Jobs Act and ensure this energized economy continues moving forward.”
The listening session framework is attached for reference:
Click to access tax_reform_2.0_house_gop_listening_session_framework_.pdf
President Trump has announced his simplistic intentions re: tax reform, and the timing is critical although lacking in substantive detail.
Apart from a lower rate (still undecided what that will be), the notion of territoriality is reinforced, in addition to the one-time tax on foreign earnings. The one-time tax is an important part of any legislation, as it will be used to drive the necessary revenues, apart from other provisions, for ultimate passage.
Most importantly, there is a renewed effort by the legislators to undertake discussions with business leaders to better understand the complexity of new legislation and its overall impact on US and global trade. The proposed import / export actions have reinforced a necessity to understand the widespread impact on different industries and the future economic growth limitations.
Realizing there are many moving parts now on Capitol Hill, it is imperative to call attention to those actions that will impact, positively or negatively, a corporation’s future ability to drive economic growth and new jobs.
Click to access 2017G_01993-171Gbl_US%20President%20Trumps%20tax%20plan%20calls%20for%2015%20percent%20business%20rate%20-%20territorial%20tax%20system.pdf
The US House and Senate have paved the way for the President’s signature on a bill that extends important international tax topics:
- Subpart F active financing exception – permanent extension
- 5-year extension of the CFC look-through rule (through 2019)
A summary of the bill is provided in EY’s Global Tax Alert:
Click to access 2015G_CM6082_Report%20on%20recent%20US%20international%20tax%20developments%20-%2018%20December%202015.pdf
Separately, the US has also indicated that regulations should be forthcoming before year-end for the country-by-country (CbC) reporting rules, which is good news for many.
These rules should provide some international tax certainty for US-based companies, notwithstanding the absence of significant reform for the worldwide tax system.