FOREIGN POLICY/TAXES/TRUMP AS PRESIDENT: “Foreign companies operating in the U.S. could face major changes in their tax bills under an overhaul being planned by Republicans. Those could include new surtaxes or limits on how much the companies can deduct on certain expenses such as rent, royalties and interest on debt.
The changes would be meant to address an imbalance. Because U.S. corporate tax rates are higher than they are in many other countries, foreign companies have an incentive to book big expenses in the U.S. so that more of their global profits get taxed at low rates back home. A drop in the U.S. corporate tax rate will address part of that imbalance, but not all of it, so other steps, such as a surtax for foreign companies with headquarters or operations in the U.S., could be imposed to level the playing field.
Lawmakers haven’t announced details of any plans, but the Senate Finance Committee sent a strong signal this month by inviting some of the sharpest critics of foreign companies’ tax maneuvers to pitch ideas at one of the final hearings before a bill is released.”
-Richard Rubin, “Changes in Store for Foreign Companies’ Tax Treatment in U.S.,” The Wall Street Journal online, Oct. 19, 2017 05:30am