The tax bill that passed the US Senate over the weekend aims to make the US more business friendly and to reclaim its economic influence from China, international accounting firm PricewaterhouseCoopers (PwC) Taiwan said yesterday.
The bill seeks to cut the US corporate tax rate to 20 percent from 35 percent and requires foreign firms to file comprehensive financial statements of affiliated units abroad, among other changes, PwC Taiwan managing director Wendy Chiu (邱文敏) said.
“The tax code changes demand quick response measures as the bill may become law before Christmas,” Chiu said.
The filing requirement is currently limited to foreign companies in the US and their related subsidiaries, but that would be extended to parent firms and parallel entities, Chiu said.
That means Hon Hai Precision Industry Co (鴻海精密), a major assembler of Apple Inc’s iPhones, would have to file financial statements of all its affiliates in Taiwan, China and elsewhere, Chiu said.
Hon Hai chairman Terry Gou (郭台銘) has promised US President Donald Trump the firm would set up a new flat-panel plant in Wisconsin that is to provide screens for a wide range of applications, such as TVs, self-driving cars, aviation and office automation systems, as well as education, entertainment and healthcare applications.
Formosa Plastics Group (台塑集團), the nation’s largest industrial conglomerate with investments in the US, is also likely to be subjected to the same requirement, PwC Taiwan said.
The requirement would allow the US ready access to the financial records of corporations on its soil and overseas, giving it more clout in competing with China for global economic leadership, Chiu said.
Filing costs would increase.
The bill further proposes axing inheritance taxes and raising the taxable threshold to US$10 million from US$560,000.
Inheritances in the US are subjected to a tax rate of between 18 and 40 percent.
The tax cut would be the biggest in 31 years, but US lawmakers need more negotiations to iron out their differences, Chiu said.
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