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US tax reform enacted

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The US Tax Cuts and Jobs Act was signed by president Trump and became law on 22 December. The Act lowers the corporate income tax rate permanently from 35% to 21%, starting in 2018. Most individual income tax rates within the seven-bracket structure are also reduced, including the top marginal rate from 39.6% to 37%. The majority of the individual income tax changes are temporary, expiring on 31 December 2025. See

Other corporate tax changes include:

·         20% deduction of qualified business income from certain pass-through businesses until 31 December 2025;

·         net interest expense deductibility limited to 30% of EBITDA for four years, and 30% of earnings before interest and taxes thereafter;

·         deemed repatriation of currently deferred foreign profits, taxed at 15.5% for cash and cash-equivalent profits and 8% for reinvested foreign earnings;

·         move to a territorial system with base erosion rules; and

·         abolition of corporate alternative minimum tax.

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