Post by unlawflcombatnt on Aug 20, 2007 15:51:55 GMT -6
from the Financial Times:
US tax bill set to hit multinationals
By Eoin Callan in Washington
8/19/07
"Multinational companies with US subsidiaries could face huge new tax bills under a law passing through the US Congress, diplomats and business groups have warned.
The new measure, known as the Doggett law after the Texas Democrat who proposed it, aims to prevent international companies avoiding US tax when they transfer funds from the US to parent groups via countries with favourable tax treaties, such as the UK and the Netherlands.
At present, companies with headquarters in countries that have no US tax treaty, such as Taiwan and Singapore, can avoid a 30 per cent tax on funds transferred from US subsidiaries by setting up a unit in countries with favourable treaties. Congressional Democrats say the legislation is focused on “tax haven hideaways”....
Under the legislation, Samsung, the South Korean conglomerate, for example, would not be eligible to make tax-free transfers from its US division to its UK financing unit. It pays a zero rate of tax on such transfers under an Anglo-American treaty, according to people familiar with the group’s structure.
Samsung’s US subsidiary would instead pay the 15 per cent tax rate that applies to Korean companies on transfers from the US....
The measure would potentially hit Japanese carmakers with big US operations....
Several international companies, including Panasonic, Unilever, Alcaltel-Lucent, Swiss Re and Allianz, are lobbying against the provision....
The provision, which has passed the House of Representatives, is to be debated in the Senate next month. It would cost foreign groups $7.5bn over 10 years, according to congressional estimates."
International companies??
It's going to hit American-owned multinationals that have hidden behind their alleged foreign residence, while freely accessing the American consumer market.
Now American investors in multinational Corporations are going to have to pay taxes on the money they've made by selling to American consumers.
Sounds like a completely fair policy to me. And a good policy as well.
US tax bill set to hit multinationals
By Eoin Callan in Washington
8/19/07
"Multinational companies with US subsidiaries could face huge new tax bills under a law passing through the US Congress, diplomats and business groups have warned.
The new measure, known as the Doggett law after the Texas Democrat who proposed it, aims to prevent international companies avoiding US tax when they transfer funds from the US to parent groups via countries with favourable tax treaties, such as the UK and the Netherlands.
At present, companies with headquarters in countries that have no US tax treaty, such as Taiwan and Singapore, can avoid a 30 per cent tax on funds transferred from US subsidiaries by setting up a unit in countries with favourable treaties. Congressional Democrats say the legislation is focused on “tax haven hideaways”....
Under the legislation, Samsung, the South Korean conglomerate, for example, would not be eligible to make tax-free transfers from its US division to its UK financing unit. It pays a zero rate of tax on such transfers under an Anglo-American treaty, according to people familiar with the group’s structure.
Samsung’s US subsidiary would instead pay the 15 per cent tax rate that applies to Korean companies on transfers from the US....
The measure would potentially hit Japanese carmakers with big US operations....
Several international companies, including Panasonic, Unilever, Alcaltel-Lucent, Swiss Re and Allianz, are lobbying against the provision....
The provision, which has passed the House of Representatives, is to be debated in the Senate next month. It would cost foreign groups $7.5bn over 10 years, according to congressional estimates."
International companies??
It's going to hit American-owned multinationals that have hidden behind their alleged foreign residence, while freely accessing the American consumer market.
Now American investors in multinational Corporations are going to have to pay taxes on the money they've made by selling to American consumers.
Sounds like a completely fair policy to me. And a good policy as well.