Tax Policy and Reform

With the Tax Cuts and Jobs Act (TCJA) signed into law in December 2017, significant changes were made to the way U.S. multinational foreign profits are taxed. While Global Intangible Low Tax Income (GILTI) was introduced as an outbound anti-base erosion provision, it has not worked as envisioned

As a result, SIFMA supports final regulations that account for the unique concerns of financial services companies, results in the lowest possible effective tax rate on foreign earnings, mitigates the unintended consequences caused by interest expense allocation rules, and obtains reasonable treatment for US branches operating in foreign jurisdictions.

Similarly, in regards to the Base Erosion and Anti-abuse Tax (BEAT), SIFMA supports final regulations (or non-tax regulatory relief) that mitigates the impact of BEAT taxation of interest on inter-company debt, calculates the threshold tests for BEAT taxation (including the denominator) in a reasonable way, ensures workable anti-abuse rules, and creates a reasonable definition of qualified derivative payments and associated reporting requirements.

On tax-deductible interest, SIFMA supports final regulations that reflect Congressional intent and do not increase cross-border withholding requirements or impact controlled foreign corporations (CFCs).

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