Fri, Jun 23, 2017
With the potential for comprehensive U.S. tax reform looming over multinationals' tax departments, many tax directors are being forced to make decisions under highly uncertain circumstances.
Tax reform proposals such as those outlined under the House GOP tax plan, or the Trump Administration’s Tax Plan Outline, would radically alter the corporate income tax base. Potential changes include reducing the corporate federal tax rate, imposing a "border adjustment" mechanism that strongly favors exports and penalizes imports, denying deductions for interest expense, and allowing immediate deductions for capital expense, among other changes.
Political influences are creating much uncertainty as to how much of the tax reform proposals would be incorporated into law, with new information from the media daily. Even if the current proposals do advance, it is unclear how transition rules would operate, what the implementation timeline would be, or how the mechanics would be defined.
Duff & Phelps performed a pulse survey on this topic to get real time feedback on how tax departments are handling this unique environment. We surveyed tax directors, tax counsels and CFOs, and received responses from a wide range of industries, including financial services, technology, consumer/retail and energy/mining. We asked pointed questions about what their companies were doing-or not doing-as a result of potential tax reform.
Important Findings from the 2017 U.S. Tax Reform Survey:
We hope you find this information useful. At Duff & Phelps, we are known for helping companies navigate through uncertainty. If you have any questions about how our teams can help you model the impact of potential tax reform scenarios, please contact our transfer pricing specialists.
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