The Internal Revenue Service provided additional information Tuesday to help corporate taxpayers deal with the new section 965 transition tax for repatriating foreign profits under the tax law that Congress passed in December.
The name that Republican tax writers gave to a new, multibillion-dollar business levy implies that it targets foreign earnings from “intangible” intellectual property—hitting tech firms and drugmakers like Apple Inc. and Pfizer Inc.
Republican lawmakers said they wanted to simplify the tax code so you could file your return on a postcard. It turns out the new tax law will be anything but simple for many affluent Americans, who are now inundating their accountants for advice.
One of the last-minute, late-night changes Senate Republicans made to their tax-overhaul plan may mean higher taxes for corporations, including technology firms, than the bill’s drafters intended, experts say.
Senate Republicans tucked some multibillion-dollar tax increases for corporations into the 515-page tax bill they released this week—spring-loaded hikes that would begin after 2024 if the economy doesn’t grow as fast as GOP lawmakers have promised.
U.S. companies that make billions of dollars from patents and other intellectual property held offshore would be eligible for a special 12.5 percent tax rate on those earnings under the Senate tax plan.
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