The US House of Representatives voted in favour of its tax reform Bill the ‘Tax Cuts and Jobs Act’ on 16 November. The Bill proposes reducing federal corporate income tax to 20% from 2018 and repealing the corporate alternative minimum tax from the same date.
The Bill as passed includes a participation exemption regime applicable to certain dividends while the controlled foreign company regime is expanded to target certain high-return offshore income. The anti-base erosion provisions include further limitations on net interest expense deductions and an ‘excise tax’ levied on deductible related party payments. The Bill also contains the expected transition tax that would impose a one-time tax on accumulated foreign earnings of US groups (14% on cash/cash equivalents and 7% on all other earnings).
The US Senate finance committee also passed its Bill on 16 November which the full Senate is expected to consider this...
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