US tax reform

With the passage of the historic revisions to the US federal tax system, companies are faced with significant challenges and potential opportunities to optimize their business operations within the US as well as internationally. Our team of tax professionals stands ready to help you navigate the impact of various technical provisions in the new Tax Cut and Jobs Act.

Now that the Tax Act has passed both houses of Congress (and is awaiting the signature of the President), it is vital for businesses to be informed and assess how the new rules may impact them. The central question to be resolved is how and when US businesses will need to change or modify the way they do business, both in the short term and the long term. For certain provisions under the new tax rules, the opportunity to effectuate change with minimal tax may be a small window of opportunity.

It is clear, that many US companies will enjoy a reduction in the headline federal tax rate to 21 percent. It is less clear how to (1) manage the changes and the impact of reduced deductions, lost credits, state taxation, and compensation adjustments; (2) optimize global business models for efficient future tax positions; and (3) address the entire arena of international business and foreign taxation within a reasonable time frame to remain competitive in this new environment.

Among the many issues faced by diverse functional areas within US companies is uncertainty around the impact of the changes on financial statements, tax filings, accounting systems and treasury processes, among others. Businesses would be well advised to assess these impacts, as soon as possible, and have in place plans which are flexible enough to respond to not only the Tax Act itself, but the numerous regulations and technical corrections anticipated as a product of this legislative process.

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