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Obama proposes tax on foreign income held overseas by MNCs

Obama proposes tax on foreign income held overseas by MNCs
Global
5 Feb 2015

Published in Tax Journal, 5 February 2015

'The attack on MNCs’ by Obama ‘ignores the crux of the issue’. ‘In many ways the US is lacking self-awareness and is avoiding a major policy issue by failing to recognise that its tax competitiveness is significantly lagging behind other major global economies. It is imperative for the US to enter the wider debate around the need for broad based tax reform. This would include a significant reform of its corporate tax system, which is rife with “tax preferences” which should be eliminated or at least reduced, allowing for a lower corporate tax rate without a reduction in government revenues. A lower corporate tax rate would be the most efficient and effective inducement for the repatriation of foreign corporate earnings. But such a tax reform debate would also include consideration of a European-style value added tax or VAT, widely regarded as the least harmful and distortive of taxes.’

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Taxand's Take

Multinationals and large corporations within the USA should keep abreast of proposed tax changes from the Obama administration.

Taxand's Take Author

Tim Wach
Global Managing Director
Global

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