Category Taxation in North America

US IT Industry Oppose New International Taxation Rules

July 28, 2009 Taxation in USA  No comments

In an open letter, addressed to leaders of the US Congress, the IT industry is voicing their concern regarding the Obama administration’s international tax reforms, specifically in regards to “deferral”.

Under current US International taxation rules there are provisions for the “deferral” of international earnings on worldwide American companies. As it stands with the current rules, the active foreign income earned by a US based company is not taxed until it has been paid to the parent company. Typically this happens in the form of dividends from the foreign operation. This system allows for the US parent company to defer their taxation on earning.

Opponents of this system maintain that this has no effect beyond “shipping” US jobs overseas and allowing US companies to effectively ...

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