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US Tax Reform: Potential Role of the APA Program

US tax reform finally occurred in 2017 with what was formerly referred to as the Tax Cuts and Jobs Act of 2017 (the Act). The headline from a corporate standpoint is reduction in the maximum rate from 35 percent to 21 percent beginning in 2018. In the international context, the Act: (i) embraces a territorial system as exists with most of its trading partners; (ii) seeks to protect the US tax base from perceived cross-border erosion; and (iii) enacts an incentive for certain economic investments in the United States at a globally attractive effective tax rate (13.125 percent). The purpose of this post is not to review the technical provisions of the Act, but to note that as each multinational enterprise (MNE) evaluates its impact on its effective tax rate strategy (both opportunities and hazards), an item to keep on the agenda may be “could a bilateral APA be of assistance?” While there is no material reference to advanced pricing agreement (APA) procedures...

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Analysis of Energy and Tax Proposals in the 2018 Budget Proposal

President Trump released his budget proposal for the 2018 FY on May 23, 2017, expanding on the budget blueprint he released in March. The budget proposal and blueprint reiterate the President’s tax reform proposals to lower the business tax rate and to eliminate special interest tax breaks. They also provide for significant changes in energy policy including: restarting the Yucca Mountain nuclear waste repository, reinstating collection of the Nuclear Waste Fund fee and eliminating DOE research and development programs. Read the full article.

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