Tuesday, March 3, 2015

Recent Proposals on Taxing Offshore Earnings

Several recent proposals have been made for a one-time preferential corporate tax rate to encourage or, in some instances, force U.S. companies to pay tax on previously untaxed foreign income. These proposals may indicate that a legislative compromise among the proposals could be reached this year.

Under current law, U.S. multinational companies are subject to worldwide taxation but generally may receive credits for foreign taxes paid and may defer U.S. tax on active earnings of their foreign subsidiaries until these profits are paid as dividends to the U.S.