Justin Davis and Jonathon Burrows discuss the US tax reform bill released by Chairman Kevin Brady.
After a number of delays, the United Stated (US) tax reform process is under way with the chairman of the House Ways and Means Committee, Kevin Brady today releasing a “Chairman’s mark” of a tax reform bill, titled the ‘Tax Cuts and Jobs Act’ (TCJA).
In addition to an array of measures targeted at providing tax cuts for middle-income families and reducing complexity for individuals, the key business and international tax reform measures in the TCJA include:
If enacted as proposed, a number of these measures are going to have material implications on the US operations of Australian multinational companies and the US investments of Australian institutional investors. In some circumstances, this may require restructuring of existing cross-border arrangements, revaluation of existing investments and re-evaluation of proposed investments.
While this is an important first step, the road to tax reform is still a long one and there is no guarantee to what extent the current version of TCJA will be reflected in the tax reform bill that will ultimately end up on the President’s desk. This bill will need to pass through the House Ways and Means Committee before being debated in the full House.
Concurrently the US Senate will also be releasing its own tax reform bill and it is not yet clear to what extent this will differ from Chairman Brady’s version released today. Ultimately both the House and Senate will need to pass identical versions of a bill before sending it to the President for his signature or veto.
Stay tuned for further industry specific insights for Australian multinationals and institutional investors in the coming days.