The Ways and Means Committee of the U.S. House of Representatives released its draft tax reform bill. The “Tax Cuts and Jobs Act of 2017” bill includes proposals for tax reform on how individuals and businesses are taxed, changes to the taxation of foreign income and foreign persons, modifications related to the foreign tax credit system and tax measures to prevent corporate base erosion.

The bill includes the following measures of relevance to companies and multinationals:

• A reduction to the US federal corporate tax rate from 35 percent to 20 percent
• A new regime for the tax deductibility of interest
• A ‘Excise Tax’ of 20 percent on payments related to non US parties
• Transition to a territorial tax system with an exemption from U.S. tax for certain foreign dividends
• Mandatory deemed repatriation of untaxed foreign earnings
• A new minimum tax on ‘High Return Profits’ from foreign subsidiaries
• A tax deduction for expenditure on capital assets (excluding real estate property)
• Limits to the use of losses

A section-by-section summary is also available from the Ways and Means Committee. Both the House of Representatives and the Senate must hold a vote on this tax reform Bill which means that it may be sometime before all or some aspects of this reform bill are enacted.