Canadian companies that do business in the United States and U.S. individuals living in Canada may be affected by proposed U.S. tax reform.
The Ways and Means Committee of the U.S. House of Representatives released their tax reform bill on November 2, 2017 as the first step in enacting significant changes to the U.S. tax rules. The bill includes measures to reduce U.S. corporate tax rates to 20%, changes the taxation of depreciable assets and imposes a new territorial tax system, among other changes. In addition, the bill maintains the top U.S. personal tax rate of 39.6%, but increases the threshold for this rate to apply.
This bill was released as what is called a "Chairman's mark", which means it does not necessarily include the input and priorities of the full committee. Although the rules included in the bill will still be amended as they proceed through the U.S. legislative process, Canadian businesses that engage in cross-border business with the United States and U.S. individuals living in Canada may want to start to determine how the proposed tax reform may impact their business.
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