Jim Higgins
Question:39 Mr. J. Higgins asked the Minister for Finance if he has had any further indication of US Treasury proposals to tax the profits of US companies based in this country; and if he will make a statement on the matter.
Written Answers. - US Treasury Proposals.
I understand that, as a general principle, income earned by a foreign corporation that is owned by a US parent company is not taxed by the United States tax authorities until it is repatriated to its US parent. This principle has, however, been restricted over the years by various measures intended to prevent to use of foreign corporation as a means to achieve unwarranted tax advantages. The proposals now being brought forward by the US authorities in relation to the taxation of certain US companies operating outside the US would apparently require US taxpayers holding a stake of more than 10 per cent in a US-controlled foreign corporation, where passive assets account for 25 per cent or more of the total asset value of the company, to pay US tax on a specified portion of the foreign corporation's current and accumulated earnings.
The Government are closely monitoring the progress of these proposals and are making their views on the matter known to the US authorities through the appropriate channels.