EY comments on US House tax reform bill
New York, 2 November 2017
Kate Barton, EY Americas Vice Chair of Tax Services, comments on today’s release of the House tax reform bill:
“The release of proposed House legislation today is a big step toward historic tax reform that significantly lowers the corporate tax rate and moves us toward a territorial system. By the time Thanksgiving comes around, let’s hope we’re giving thanks for passage of a tax reform bill that is designed to make the US more competitive in the fight for new investment and new jobs.
However, before anyone celebrates, every business must determine how the provisions in the draft will affect their tax bill and their current ways of doing business. For example, companies must model how much they will save in taxes with a lower tax rate versus how much more they will have to pay because of lost deductions. They will want to consider how much would they owe under a minimum tax on foreign earnings, how would the anti-base erosion provisions apply to their supply chains and capital structures, and what will they do differently if foreign earnings can be repatriated with no additional US tax? Though many will be thankful for today’s progress on tax reform, whether it is a happy new year will depend on a deep understanding of the specific effects of a very complicated reform package.”
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This news release has been issued by Ernst & Young LLP, a member firm of EY serving clients in the US.