TAG Tax - Global Perspectives Call (U.S. Tax Update and Romania / Moldova Overview)
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TAG Tax “Global Perspectives” February 8, 2017
Transcript of TAG Tax - Global Perspectives Call (U.S. Tax Update and Romania / Moldova Overview)
TAG Tax “Global Perspectives” February 8, 2017
I. TAG Alliances Update
II. US Tax Update
III. Romania and Moldova
IV. Get Involved in TAG Tax
Agenda
Chris Cervellera Executive Director
Newest Members
Nigeria (TAGLaw)
Northern Italy (TIAG) South Florida (TIAG)
Cyprus (TIAG)
Spring International Conference
Early Bird Discount Expires March 3
Get Connected on LinkedIn
Today’s Speakers
Anna K. Derewenda Williams Mullen
(North Carolina & Virginia, USA) TAGLaw
Bogdan Nastase Group Expert Consulting
Romania TIAG
ABOUT WILLIAMS MULLEN
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WILLIAMS MULLEN FOCUS
FOCUSED PRACTICES > Corporate and M&A > Finance & Real Estate > Health Care > Immigration > International > Intellectual Property > Labor & Employment > Litigation > VA and NC State Government
Relations
TAX SPECIALTIES > Corporate Tax > Employee Benefits &
Executive Compensation > Estate Planning: Private
Client & Fiduciary Services > Historic Tax Credits > International Tax > Tax Exempt Organizations > Tax Controversy > VA & NC State & Local Tax
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WILLIAMS MULLEN TAX RESOURCES
CORPORATE TAX
STATE & LOCAL TAX
J. Conrad Garcia Chair Tax Section 804.420.6910 [email protected]
Jenny H. Connors Partner Corporate Tax 804.420.6582 [email protected]
Anna K. Derewenda Partner International 804.420.6094 [email protected]
Stephanie Lipinski-Galland Partner, VA State Tax 202.327.5094 [email protected]
Charles B. Neely, Jr. Partner, NC State Tax 919.981.4007 [email protected]
Kyle H. Wingfield Associate, VA State Tax 804.420.6445 [email protected]
Nancy S. Rendleman Partner, NC State Tax 919.302.5629 [email protected]
Eugene W. Chianelli. Jr. Partner, NC State Tax 919.981.4091 [email protected]
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TAX RESOURCES
PRIVATE CLIENT & FIDUCIARY SERVICES
Christine N. Piersall Chair Private Client & Fiduciary Services 757.629.0703 [email protected]
Farhad Aghdami Partner Private Client & Fiduciary Services 804.420.6440 [email protected]
David D. Addison Partner Private Client & Fiduciary Services 804.420.6483 [email protected]
Adam Farnsworth Associate Private Client & Fiduciary Services 804.420.6047 [email protected]
Fielding L. Williams, Jr. Partner Private Client & Fiduciary Services 804.420.6410 [email protected]
Michelle Lee Harris Associate Private Client & Fiduciary Services 757.629.0708 [email protected]
James P. Head Partner Private Client & Fiduciary Services 703.760.5231 [email protected]
Daniel J. Durst Partner Private Client & Fiduciary Services 804.420.6465 [email protected]
M.R. Litman Associate Private Client & Fiduciary Services 804.420.6210 [email protected]
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TAX RESOURCES
EMPLOYEE BENEFITS & EXECUTIVE COMPENSATION Marc Purintun
Chair Employee Benefits & Executive Compensation 804.420.6310 [email protected]
Nona K. Massengill Partner Employee Benefits & Executive Compensation 804.420.6569 [email protected]
Brydon M. DeWitt Partner Employee Benefits & Executive Compensation 804.420.6917 [email protected]
Elinor H. Clendenin Partner Employee Benefits & Executive Compensation 804.420.6469 [email protected]
Robert B. Hamlett Associate Employee Benefits & Executive Compensation 804.420.6910 [email protected]
Marie D. Yascko-Rosado Associate Employee Benefits & Executive Compensation 804.420.6418 [email protected]
UNITED STATES TAX UPDATE
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Tax Reform
> House Ways and Means Committee Chairman Kevin Brady (R-TX) and Senate Majority Leader Mitch McConnell (R-KY) have expressed a desire to take up tax reform in early 2017 during the next session of Congress.
> In June 2016, the House Republicans released a number of tax reform proposals called, “A Better Way – Our Vision for a Confident America”.
> Tax Reform proposals made by Trump during his election campaign were borrowed from the Republican, “A Better Way” blueprint. Proposals include changes to individual and business income tax calculations and deductions and the estate tax.
> Brady and McConnell will take the blueprint to Congress in collaboration with Trump in early 2017.
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Tax Reform: Business tax (GOP)
> The House Republican’s “A Better Way” plan introduced corporate tax provisions to:
– Rebuild IRS to be more “streamline”. – Shift to a territorial tax system, simplify international tax rules by eliminating
subpart F rules, and move towards a consumption-based tax (VAT?). • Deemed repatriation of foreign earnings (3.5% tax payable over 8 years/
8.75% if held in cash or cash equivalents.) – Reduce the corporate tax rate to 20%. – Allow full deduction for business investments (Tangible & Intangible (not
land)). – Allow interest expenses deductions only to offset interest income, with net
interest expense carry forward. – Allow NOLs to be carried forward indefinitely and increased by an interest
factor while eliminating NOL carrybacks. – Eliminate AMT.
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Tax Reform: Business tax (Trump)
> The Business Tax Rate would decrease from 35% to 15%. > Corporate AMT would be eliminated. > Deemed repatriation of corporate profits held offshore at a
one-time tax rate of 10%. > Corporate Tax Expenditures would be eliminated.
– Exception for R&D Credit > U.S. Manufacturing Firms may elect to expense capital
investment. – Would lose ability to deduct corporate interest expense.
> On-site childcare annual cap would be increased to $500,000 per year (from $150,000), and recapture period would be reduced to 5 years (from 10 years).
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Tax Reform: Individual Income Tax (Trump)
> Trump has proposed the following tax rate schedule for Married-Joint filers compared to the current schedule.
* Trump numbers in Bold
Income Proposed Tax Rate
2016 Tax Rate
$0 to $18,550 10%
$18,551 to $75,300 15%
Less than $75,000
12%
$75,301 to $151,900 25%
More than $75,000 but less than $225,000
25%
$151,901 to $231,450
28%
More than $225,000
33%
$231,451 to $413, 350 33%
$413,351 to $466,950 35%
$466,951 or more 39.6%
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Tax Reform: Individual Income Tax (Trump)
> Brackets for single filers would be half of the Married-Joint tax schedule. * Trump numbers in Bold
>
Income Proposed Tax Rate
2016 Tax Rate
Up to $9,275 10%
$9,276 to $37,650 15%
Less than $37,500 12% $37,651 to $91,150 25%
More than $37,500 but less than $112,500
25%
$91,151 to $190,150 28%
More than $112,500 33%
$190,151 to $413,350 33%
$413,351 to $415,050 35%
$415,051 or more 39.6%
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Tax Reform: Individual Income Tax (GOP)
> The House Republican’s “A Better Way” plan introduced individual tax provisions to:
– Reduce the top rate to 33% and reduce number of tax brackets, to 12%, 25%, and 33%.
– Limit rate applicable to income from sole proprietorships and pass-through entities to 25% bracket .
– Create reduced and progressive rates on capital gains, dividends and interest income. (6%, 12.5%, and 16.5%) After allowing a 50% deduction for such income
– Eliminate AMT. – Create a larger standard deduction and child and dependent tax credit by
consolidating existing family tax benefits. (Standard Deduction $24,000 MFJ; Child Care Credit $1,500).
• Eliminate all other itemized deductions except charitable and mortgage deductions.
– Repeal estate and GST tax.
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Tax Reform: Individual Income Tax (Trump)
> President-elect Trump’s Individual Income Tax Plan includes:
– Capital Gains Structure (maximum rate of 20%) would be maintained.
– Carried interest would be taxed as ordinary income. – The ACA 3.8% tax on investment income would be
repealed as a result of the ACA’s repeal.
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Tax Reform: Individual Income Tax (Trump)
> Standard Deduction: – for MFJ would increase to $30,000. – for SF would be $15,000.
> Head of Household Status would be eliminated. > Personal Exemptions would be eliminated. > Itemized Deductions would be capped:
– at $200,000 for MFJ, and – $100,000 for SF.
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Tax Reform: Individual Income Tax (Trump)
> Child care and Elder Care Rules: – Above-the-line deduction for children <13, capped at state
average for age of child, and for eldercare for a dependent. – Through the EITC, rebates for childcare expenses for low-
income taxpayers equal to 7.65% of remaining eligible childcare expenses, subject to a cap. (Available to MFJ earning $62,400, and $31,200 for SF, or less.
– Dependent Care Savings Accounts (DCSA) for specific individuals, including unborn children. Annual contributions limited to $2,000/year. Government would provide 50% match on parental contributions up to $1,000 per/year.
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Tax Reform: Individual Income Tax (Trump)
> The Estate Tax would be repealed, but capital gains on property held until death and valued over $10 million would be subject to tax, with an exemption for small businesses and family farms. > Contributions of appreciated assets into private
charities established by the decedent or his/her relatives would be disallowed.
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Please note: This presentation contains general, condensed summaries of actual legal matters, statutes and opinions for information purposes. It is not meant to be and should not be construed as legal advice. Individuals with particular needs on specific issues should retain the services of competent counsel.
Contact Information
AnnaDerewenda(804)420-6904
TAG Tax “Global Perspectives” February 8, 2017
