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Tax Bill Has ‘Opaque’ New Tax for Some Multinationals

  • Undefined ‘high returns’ would be subject to 10 percent levy
  • Measure aims to prevent companies’ shifting profit offshore
Bloomberg business news

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U.S. multinationals that derive or book substantial profits overseas might face a new tax on some of their future earnings going forward, under the House tax bill released Thursday.

The measure would apply a 10 percent tax rate on “high returns” that U.S. parents receive from foreign subsidiaries -- though it’s not clear what would constitute high returns. Ernst & Young said the new tax would fall on “potentially significant amounts of foreign income.”