Monday, August 15, 2011

How Companies Would Gain From a U.S. Tax Amnesty on Repatriated Funds

Under the present IRS Code, Puerto Rico is considered a foreign jurisdiction, thus we would not qualify for this policy if it is implanted. If this policy is adopted, Puerto Rico will lose it's barganing power to negotiate a Satehood Admission Act for Puerto Rico with the support of the CFC's. MJ 
"This topic generates passions on both sides of the aisle. Those for a tax amnesty on repatriated funds argue it will generate billions in additional corporate tax revenue, fund pension plans, raise wages, create jobs, invest in new plants and equipment, and benefit shareholders. Those against argue there was no evidence that the 2004 repatriation legislation increased U.S. investment or jobs.Regardless of which side of the argument one sides with there is no doubt about the potential benefits to both the company and shareholders.
Currently, there is over $1 trillion earned by American businesses, which has been taxed once, sitting overseas. According to recent SEC filings the combined amount of cash and investments held by foreign subsidiaries for Apple (AAPL) and Microsoft (MSFT) exceeded $90 billion as of the quarter ending June 30. This amount could exceed $100 billion by the end of the next quarter.There is bipartisan support building for a repatriation holiday in some form. Given the state of the economy we feel there is a good chance a tax amnesty, or a reduced tax rate, is a possibility; benefiting the companies mentioned in this article."