US Tax Reform and International Tax Developments

February 28, 2018

Fenwick tax partner Larissa Neumann chaired a panel looking at tax reform and international tax developments at the 46th Annual Conference of the USA Branch of the International Fiscal Association. 

Neumann pointed out that the international provisions in the new Tax Cuts and Jobs Act, P.L.115-97, may not encourage companies to repatriate their offshore intellectual property, according to a Law360 article covering the conference​. The foreign-derived intangible income (FDII) provision grants a reduced rate for certain foreign derived income.

Neumann cited uncertainty around the provision, what is considered foreign use and the fact that the rates are scheduled to go up as key issues. Some critics, according to Law360, have claimed the provision is essentially a subsidy for exports, potentially violating World Trade Organization rules.

“I think for most people, it doesn’t create a big incentive to restructure in order to take advantage of FDII,” Neumann said.

The full article is available on Law360 (subscription required).​