Tax Directors Come to Grips with US Tax Reform and GILTI

May 1, 2018

Fenwick tax partners Jim Fuller and Larissa Neumann, along with associate Julia Ushakova-Stein, talked to TP Week about how multinational companies are reviewing their corporate structures after the Tax Cuts and Jobs Act.

Specifically, Fuller, Neumann and Ushakova-Stein discussed the review that both U.S. and foreign multinational companies are undergoing of their corporate structures to identify holding companies after U.S. tax reform.

Fuller told TP Week the use of holding company structures was not a “yes” or “no” question. “It’s one that depends on the particular facts involved,” he said. “If a particular holding company’s only purpose was to avoid U.S. tax under the previous rules, for example, to enable a freer flow of cash within the foreign corporate structure, perhaps that holding company could now be eliminated from the corporate structure.”

"However, a holding-company structure might reduce foreign withholding tax on dividends, which could now become costly non-creditable taxes in the US. Using a holding company for this purpose could have continuing benefits,” added Neumann and Ushakova-Stein. “A holding company structure also could be used to generate Subpart F income if that’s desirable as a part of the taxpayer’s foreign tax credit planning under the recent Tax Act.”


Don’t have an account yet?