With the status of healthcare reform uncertain, Congress and President Trump may focus on major tax legislation soon. There are many proposals being discussed as part of U.S. corporate tax reform, including border adjustability, nondeductibility of net interest expense, immediate expensing of U.S. asset acquisitions, territorial taxation, and a reduced corporate tax rate.
Border adjustability, a proposal in the House Republican’s tax “Blueprint,” has particular currency for the life sciences industry. Although technical details have not yet been released, under such a provision, the U.S. tax base presumably would consist of business income received from, and business expenses paid to, other U.S. taxpayers. It presumably would exclude business income received from, and business expenses paid to, non-U.S. taxpayers.
Life sciences companies may need to consider assessing their business readiness for potential comprehensive U.S. tax reform and give careful thought to potential future investment locations and the implications for the supply chain.
Read a March 2017 report [PDF 4.0 MB] prepared by KPMG LLP: U.S. tax reform—Planning in uncertain times
© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.