U.S. companies that had been unsure of how to calculate a new tax on profits they've stashed offshore now have official answers.
The IRS proposed regulations governing the so-called repatriation tax on Wednesday, detailing which corporate taxpayers are subject to the tax, which assets are on the hook, and how to pay in installments. The proposed regulations also specify strategies the IRS would target for multinationals that tried to reduce their offshore tax bills in anticipation of the new law. Some of the proposals reflect guidance the IRS had given to corporate taxpayers in press releases earlier this year.
President Donald Trump's tax overhaul requires U.S.-based companies to pay tax on the estimated $3 trillion they've stashed abroad since 1986. The new rules set a one-time rate of 15.5 percent on cash and 8 percent on non-cash or illiquid assets. Payments can be made over eight years. Previously, companies had to pay the old 35 percent corporate rate, but only if they brought the money back to the United States.
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