Latest news with #corporatetax
New York Times
7 hours ago
- Business
- New York Times
This Loophole Buried in Trump's Bill Is Anything but Beautiful
It is hard to think of a less coherent pair of policies: President Trump's tax policy encourages the very offshoring that his tariffs are intended to stop. Take the more than $600 billion pharmaceutical industry. Over the past few months, Mr. Trump and his associates have repeatedly criticized companies' moves to offshore much drug making, particularly to Ireland. 'We can't be beholden and rely upon foreign countries for fundamental things that we need,' Commerce Secretary Howard Lutnick said on April 13. But the tax incentives in Mr. Trump's 2017 tax and spending package helped generate this problem in the first place — a problem that would continue under the Republican bill under consideration. Mr. Trump's Tax Cuts and Jobs Act created a loophole that made it far more profitable for the pharmaceutical giants, including Eli Lilly, Pfizer, Johnson and Johnson and Merck, to manufacture some of their most profitable drugs in Ireland. Unsurprisingly, that is what happened, with America's imports of pharmaceuticals soaring to $250 billion in 2024, way up from $110 billion back in 2016. American firms now report earning about $350 billion in profits annually in the world's major centers of corporate tax avoidance, which include Ireland, Luxembourg, Singapore and a handful of others. And while the major drug companies have mastered the art of taking advantage of the loopholes created by the 2017 law, semiconductor equipment producers and other Big Tech companies use the same special tax break. Fortunately, it isn't too late to make sensible changes that would raise revenue and get rid of this strange incentive. Republicans tend to blame Ireland's lower corporate tax rate for the proliferation of corporate tax avoidance, but the real incentive comes from this obscure corner of our tax code. It offers a far-lower 10.5 percent tax rate for global profits if a global firm moves the profits from its intellectual property offshore. The tax rate for domestic profits, in contrast, is 21 percent. The tax break was created by Republicans who were searching for a compromise that would stop companies from moving their headquarters overseas without fully ending tax competition and the associated pressure on U.S. corporate tax rates. Want all of The Times? Subscribe.
CBC
a day ago
- Business
- CBC
Deficit to be $4.3B smaller than predicted, but spending plans remain obscure: budget report
Social Sharing The Parliamentary Budget Officer (PBO) says the deficit will be smaller than predicted but the Liberal government's lack of clarity on fiscal planning has left Yves Giroux's office unable to determine if the government's spending plans are sustainable. The Economic and Fiscal Monitor released by Giroux's office Thursday morning says that the deficit for 2024-25 will be $46 billion — $4.3 billion lower than it had predicted during the election and $2.3 billion lower than was estimated in the fall economic statement. "The revision to our estimated deficit reflects a $5.2-billion increase in our estimate for revenues in 2024-25, somewhat offset by a $1-billion increase in our estimate for expenses," the report said. The PBO said that while it predicted the Canadian economy would only grow by 1.8 per cent in the fourth quarter of 2024 and 1.6 per cent in the first three months of the year, real gross domestic product actually grew at an annualized rate of 2.1 per cent and 2.2 per cent. The report said the improved fiscal position of the federal government can be explained by stronger than expected corporate income tax revenues and the money collected from Canada's counter-tariffs on U.S. goods. Improved growth in the first three months of the year, Giroux's office said, can be partly explained by companies rushing to buy inventory before tariffs were imposed. The PBO is predicting that real GDP growth in the second quarter of 2025 will likely remain flat, with an expected decline in exports acting as a drag on the economy. "Business investment is also expected to remain subdued due to elevated uncertainty," the report said. Fiscal sustainability During the election campaign, Prime Minister Mark Carney announced his plan to separate "operational spending" — the day-to-day running of government programs and departments — from "capital spending," which is anything that builds an asset the government holds. The Liberal platform pledged that it would cut the growth of government spending from nine to two per cent by eliminating waste, duplication and deploying technology to balance operational spending by 2028. But the PBO says the Liberal government has complicated its ability to track that fiscal anchor by not fully explaining how it will define operating and capital spending. "Hence the PBO is unable to assess whether the Government's recent fiscal policy initiatives presented in Parliament … are consistent with achieving its new fiscal objective," the report said. Because of the lack of clarity, the government's spending plans could be fiscally unsustainable, Giroux's office said. "Parliamentarians may wish to seek additional clarity regarding how the government plans to measure its fiscal anchor and how it will ensure federal finances remain sustainable.
Zawya
3 days ago
- Business
- Zawya
Unregistered taxpayers urged to utilise late registration penalty waiver initiative: FTA
ABU DHABI: A new workshop hosted recently in Abu Dhabi by the Federal Tax Authority (FTA) saw the participation of around 940 business representatives and stakeholders, as the FTA continues to reiterate its call to unregistered corporate taxpayers to expedite the submission of their corporate tax registration applications. The workshop series is part of the FTA's ongoing campaign to educate and enable businesses to benefit from the Cabinet Decision to exempt corporate taxpayers and certain categories of exempt persons required to register with FTA from administrative fines – typically resulting from the late submission of a registration application, within the stipulated legal period. The Abu Dhabi workshop – one of many in-person events being held across the UAE – also defined the rules for determining income subject to corporate tax and clarified the requirements and procedures for compliance with the Corporate Tax Law. In addition to in-person seminars, the FTA is also organising various remote video conference events. During the workshop, the Authority further confirmed that – in order to benefit from the exemption initiative – corporate taxpayers (or exempt persons required to register) who have registered for the tax must file their tax returns (or annual declarations) within a period not exceeding seven (7) months from the end of the registrant's first tax period, in order to be exempt from the penalty. The FTA further clarified that the exemption only applies to the taxpayer registrant's first tax period (or an exempted person required to register), whether the due date of the first tax return (or first annual declaration) is before or after the start of the new decision's implementation. During the workshop, FTA experts provided an in-depth explanation on key aspects of corporate tax, including how to determine and calculate income subject to corporate tax, understanding tax liabilities, and adhering to accounting standards for tax purposes. Other topics touched on included the preparation of financial statements based on the taxpayer's applicable accounting standards, the accrual basis of accounting, and the recognition of income when earned and expenses when incurred. Additionally, FTA experts discussed the definitions of financial assets and liabilities, methods of accounting for equity under IFRS, and the application of cost accounting standards. A demonstration on the registration procedures through EmaraTax, the digital tax services platform, was also provided, as well as the criteria for identifying taxable persons, the applicable rates and tax periods, the mechanism for applying the provisions of the Corporate Tax Law and its associated decisions, and the requirements for compliance with the law. At the conclusion of the workshop, FTA personnel conducted a Q&A session with the workshop participants. The current phase of the campaign, which began in 2023 and is running across the UAE, addresses various tax topics to introduce the legislation, requirements and procedures for corporate tax compliance. These awareness programmes are designed and orientated to suit each of the main categories concerned, utilising the latest relevant technologies to ensure easy access to information for taxpayers. The Authority emphasised that the corporate tax awareness campaign is a key component of its comprehensive engagement strategy, aimed at ensuring seamless corporate tax compliance and supporting taxpayers in meeting their tax obligations. The campaign also intends to foster voluntary compliance, built upon a robust procedural and legislative framework that aligns with global best practices. The FTA urged taxpayers to familiarise themselves with the Corporate Tax Law, Executive Decisions, and Guides available on the FTA's website.
Arabian Business
3 days ago
- Business
- Arabian Business
UAE offers Corporate Tax fine waiver — but deadline looms
The Federal Tax Authority (FTA) is urging corporate taxpayers across the UAE to register for corporate tax and file returns within the legal deadline to avoid administrative penalties, under a limited-time waiver introduced by Cabinet Decision. The waiver applies to both taxable entities and exempt persons required to register, provided they submit their corporate tax registration and file their first tax return or annual declaration within seven months from the end of their first tax period. The FTA clarified that the exemption from late registration fines only applies to the first tax period, regardless of whether the due date falls before or after the decision came into effect. UAE Corporate Tax The Authority emphasised that this grace period offers businesses a valuable opportunity to ensure full compliance without incurring fines — but warned that delays beyond the 7-month deadline will trigger penalties under the UAE's Corporate Tax Law. Key waiver conditions: Entities must register for corporate tax through the FTA's EmaraTax platform First tax return or declaration must be filed within seven months from the end of the entity's first tax period Applies to both taxable businesses and exempt persons required to register The waiver campaign forms part of the FTA's wider drive to support businesses in meeting their tax obligations, while building a culture of voluntary compliance in line with international best practices. Campaign outreach includes: Nationwide in-person and online workshops to educate businesses Clarifications on taxable income, accounting standards, compliance rules, and registration processes In one such workshop recently held in Abu Dhabi, 940 business representatives attended to better understand the implications of the Corporate Tax Law and the conditions tied to the penalty exemption. FTA experts explained how to determine and calculate taxable income, comply with accounting standards, and register via the EmaraTax digital platform. A Q&A session followed, addressing specific concerns from participants. The Authority concluded by urging businesses in the UAE to review the Corporate Tax Law, Executive Decisions, and user guides available on the FTA's website to ensure they make full use of the exemption and avoid unnecessary financial penalties.
Bloomberg
3 days ago
- Business
- Bloomberg
Oil Industry Gets $1 Billion Tax Tweak in GOP's Senate Bill
Senate Republicans included a tax break estimated to be worth more than $1 billion for oil and gas producers in their version of President Donald Trump's sprawling fiscal package. The provision would allow energy companies subject to a 15% corporate alternative minimum tax to deduct certain drilling costs when calculating their taxable income. Companies including ConocoPhillips, Ovintiv Inc. and Civitas Resources, Inc. lobbied in favor of it.
