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With much publicity, the Senate passed an amended version of its Finance Committee’s version of the Tax Cuts and Jobs Act over the weekend. Corporations now face a challenge: where to find the resources to react. Expect a scramble around year-end planning and preparing for provisions.
Alvarez and Marsal, Taxand USA, highlights the notable corporate amendments since the Senate Finance Committee version was first released; although the amendments are few in number, their impact may be significant.
Next step: The House-Senate Conference Committee is expected to begin its process of reconciling their respective bills this week. Republican Party leadership intends and appears to be on track to deliver a bill to the President for signature before year-end.
Discover more: Corporate hustle – senate passes tax reform
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With higher chance of enactment and minimal likelihood for major revisions to the corporate provisions, we strongly recommend companies undertake proactive measures in anticipation of passage prior to year-end. Immediate action items should include year-end planning, year-end calculations and determining ways to maximise the advantages of tax reform. In doing so, companies should anticipate that the corporate rate might not drop until 2019, but most of the other major provisions (notably the toll charge) could be effective in a matter of weeks. Anticipate year-end needs, schedule the cash-flow impacts, and determine potential structuring alternatives in order to optimise post-reform tax positions.