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在线翻译:
szdaily -> World Economy
Firms may dodge billions in US taxes through new loophole: experts
    2018-January-15  08:53    Shenzhen Daily

A LOOPHOLE in the new U.S. tax law could allow multinational corporations like Apple Inc. to avoid paying billions of dollars in taxes on profits stashed overseas, according to experts.

Stemming from a Republican overhaul of international business taxes, the loophole involves the tax rates — 15.5 percent or 8 percent — that companies must pay on US$ 2.6 trillion in profits they are holding abroad.

By manipulating their foreign cash positions, a determining factor under the new law, a U.S. multinational could potentially save money by shifting profits to the lower rate from the higher one, according to Stephen Shay, a senior lecturer at Harvard Law School.

“This is clearly the result of rushed legislation,” said Shay, formerly a top Treasury Department tax official.

The sweeping Republican tax law was President Donald Trump’s first major legislative triumph since he took office almost a year ago. Rushed through Congress and approved over the unanimous opposition of Democrats, it took effect this month, delivering tax cuts and tax code changes that large, U.S.-based multinationals had sought for years.

One of those changes was a one-time tax break on about US$ 2.6 trillion in profits that multinationals have socked away overseas in recent years under a “deferral” rule that let companies hold profits offshore tax-free, as long as the money was not brought into the United States, or repatriated.

To knock their taxes even lower, experts said, multinationals could have leeway to shift foreign earnings into the 8 percent tax bracket and out of the 15.5 percent bracket.

“Even before the legislation was unveiled in November, multinationals were planning to convert cash to non-cash assets, although it wasn’t entirely clear what would constitute cash for this purpose,” said Reuven Avi-Yonah, a leading tax expert at the University of Michigan Law School.

Shay said some multinationals could reduce their cash positions, and the amount of money subject to the higher rate, through legitimate distributions including dividend payments.

He estimated Apple could have as much as US$ 289 billion in foreign cash at the end of its current fiscal year on Sept. 30. Averaged across the last two tax years, the figure would be US$ 234 billion.

To avoid paying 15.5 percent on the higher of those two figures, he said, Apple could distribute some of its cash through dividends or other means. Reducing its 2018 position by US$ 55 billion to the lower, two-year average would save the company more than US$ 4 billion in taxes, according to Shay.(SD-Agencies)

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