US Introduces New Anti Tax Haven Laws
The Democrats’ Texas MP Lloyd Doggett has reportedly introduced a new piece of anti-tax haven legislation into the US House of Representatives. The International Tax Competitiveness Act, contains many clauses which Doggett has previously included in similar pieces of legislation which didn’t make it to the statute book due to Republican resistance.
Doggett was one of the sponsors of the Stop Tax Haven Abuse Act. Although that law was not passed, much of it was incorporated in the Foreign Account Tax Compliance Act of 2009, which became law as part of the Hiring Incentives to Restore Employment (HIRE) Act, changing the system of withholding on payments made to non-US persons.
Key clauses of the new law would:
- tighten corporate residency rules to prevent corporations with a preponderance of US officers from basing themselves overseas;
- make it much more difficult for corporations to receive income from IP assets in foreign (low-tax) jurisdictions;
- repeal the 80% ‘active income’ provision;
- repeal the ‘boot-within-gain’ rule which allows favorable tax treatment of dividends paid during corporate reorganizations.
Previous attempts to pass such laws have met with fierce resistance from major business organizations and from Republicans in general.
It remains to be seen whether the new bill will meet with any more success than its predecessors.
Given the widespread use of Offshore centres by persons in high office (and those that fund them) and the fact that allegedly one third of the world wealth is owned by Offshore Trusts I somehow doubt this bill will be allowed to progress too far. Let’s wait and see…