United States of America: Provisions in the Tax Cuts and Jobs Act affecting international transactions

In December, 2017 the United States made a major overhaul in its tax law, with some provisions affecting the taxation of international transactions. The main thrust of the bill is to reduce the rates at which individuals and businesses are taxed and to simplify the rules of the tax system. One of the additional objectives of the bill’s authors and negotiators was to encourage the repatriation to the United States of profits currently held in foreign countries by U.S. multinational corporations. Or as described by the authors, the bill “[m]odernizes our international tax system so America’s global businesses will no longer be held back by an outdated ‘worldwide’ tax system that results in double taxation for many of our nation’s job creators” and “[p]revents American jobs, headquarters, and research from moving overseas by eliminating incentives that now reward companies for shifting jobs, profits, and manufacturing plants abroad.”