In exchange for that, put simply, companies got to pay practically zero U.S. tax on their foreign subsidiaries’ profits going forward as part of the shift from a global corporate tax system to a territorial one.
The Tax Cuts and Jobs Act brought clarity for some companies earning foreign income and new layers of complexity for others. With new IRS guidance for 2019, it’s smart to take a long view. Learn more via Industry Today.
The headline-grabbing change brought about by the Tax Cuts and Jobs Act enacted at the end of 2017 was easy enough to grasp. The idea was that by offering U.S. companies a one-off, reduced tax rate of 15.5%, C corporations would have an incentive to bring home the more than $2 trillion in untaxed profits accumulated abroad. The offshore stash would otherwise have been taxed at 35% upon repatriation.