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.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
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The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
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