'Orwellian' Offshore Tax Will Hit Some Firms Harder Than Others
- Despite its ‘intangible’ name, levy applies broadly to income
- Bain, other private equity partnerships said to face impact
The Winners and Losers in the Tax Overhaul Bill
The name that Republican tax writers gave to a new, multi billion-dollar business levy implies that it targets foreign earnings from “intangible” intellectual property -- hitting tech firms and drugmakers like Apple Inc. and Pfizer Inc.
But experts agree that the little-understood “global intangible low-taxed income” levy, or GILTI, will also apply to earnings that go far beyond patents, royalties and licensing, and could end up snaring many global firms that earn little such income. Private equity partnerships that aren’t publicly traded, including Bain Capital LP, stand to pay rates three times as high as corporate competitors’, tax lawyers say. Law and advertising firms with overseas offices may also be hit -- as will many U.S. companies that make “excess” profit from foreign plants, equipment and inventory.