Global menu

Our global pages

Close
Print Friendly and PDF

US Tax Reform

On December 22, 2017, the Tax Cuts and Jobs Act (the TCJA) was signed into law. The TCJA, the most substantial overhaul of the US Internal Revenue Code since 1986, is far-reaching and significantly changes how the US taxes domestic and multinational businesses.

The TCJA reduced the US corporate tax rate from 35% to 21%. In consideration of the reduced US corporate tax rate, the TCJA adopted measures intended broaden the US tax base. The US adopted new limitations on the ability to deduct interest expense and adopted a new base erosion and anti-abuse tax (BEAT), which is effectively an alternative minimum tax for certain large corporations that is calculated by adding back certain deductible payments made to related parties.

Key challenges

The TCJA transitions the US towards a territorial system, imposing a transition tax on previously untaxed earnings of non-US subsidiary and adopting a limited participation exemption for dividends received by such subsidiaries. However, the quasi-territorial nature of the system is illustrated by the adoption of a new tax on global intangible low-taxed income (GILTI) of non-US subsidiaries and its corollary, the new deduction for foreign derived intangible income (FDII) of US corporations.

The changes enacted by the TCJA are significant and it is imperative that multinationals consider the impact on their existing structures and future decisions.

Navigating the changes

The Eversheds Sutherland tax team is here to help you understand and navigate the changes wrought by the TCJA.

Resources icon
Resources 		Our people icon
Our People 		Subscribe to our e-briefings icon
Subscribe to our e-briefings

Contact us

Robert S. Chase II, Partner

Choose a country

Select a country to see local services

Print Friendly and PDF

© Eversheds Sutherland 2023. All rights reserved. Eversheds Sutherland is a global provider of legal and other services operating through various separate and distinct legal entities.

Eversheds Sutherland is the name and brand under which the members of Eversheds Sutherland Limited (Eversheds Sutherland (International) LLP and Eversheds Sutherland (US) LLP) and their respective controlled, managed and affiliated firms and the members of Eversheds Sutherland (Europe) Limited (each an "Eversheds Sutherland Entity" and together the "Eversheds Sutherland Entities") provide legal or other services to clients around the world. Eversheds Sutherland Entities are constituted and regulated in accordance with relevant local regulatory and legal requirements and operate in accordance with their locally registered names. The use of the name Eversheds Sutherland, is for description purposes only and does not imply that the Eversheds Sutherland Entities are in a partnership or are part of a global LLP. The responsibility for the provision of services to the client is defined in the terms of engagement between the instructed firm and the client.