We consider the recent US tax reform proposals in more detail.
Last week, we reported on the publication of the first draft of the ‘Tax Cuts and Jobs Act’, the legislative text to implement US Tax Reform. Due to take effect from 1 January 2018, these proposals signal the most substantial and wide ranging reform of the US tax code since 1986. The overall objective is to give tax cuts and to create jobs and will cost an estimated $1.5 trillion over 10 years. However the proposals also include measures to broaden the tax base, particularly for multinational groups. These proposals have generated a lot of interest on both sides of the Atlantic, and this article takes a look at some of the key areas of interest to UK businesses with US activities.
The key measures include:
These proposals are constantly moving. At the time of writing we are expecting the Senate to publish its bill proposal imminently; they may have done so by the time you read this. This will almost inevitably lead to further debate and may well change expectations as to the final form of the bill.
What should you be doing now?
The stated goal of Republican congressional leadership is for President Trump to sign the bill into law by 1 January 2018. The House and the Senate have set an aggressive schedule to try to meet this goal. If the reform stays on track it could be achieved but there are many pinch points which could push the process into 2018 or lead to the demise of the bill. We have produced a ‘Path to Tax Reform’ graphic which sets out the process the bill must now go through.
In the meantime, affected groups should start to go through the proposals to understand and model the potential impact on their business.
We will continue to publish updates in Tax Matters Digest as the reform progresses, so please check back for further updates. You can also keep up to date with the latest news from KPMG in the US at their dedicated Tax News Flash – Tax Reform page.
Webinar: UK insights into US tax reform
We will be holding a webinar to flesh out some of the key planks of the US tax reform package on Tuesday 14 November at 1pm. Click here for further details and to sign up.
For more information
For more information, please get in touch with either your usual KPMG contact or one of the named contacts below.
For further information please contact: