Congress is out this week for Thanksgiving but congressional staff continue to work on tax reform legislation. Negotiation also are underway over sticking points between the House and Senate versions of the bill. Congress will reconvene during the week of November 27, when the Finance Committee tax reform bill is expected to be considered on the Senate floor. The tax reform proposal approved by the Finance Committee differ in key aspects from the House-approved bill. Once the House and Senate have approved tax reform bills, both chambers must reconcile differences between the two bills and then vote to pass a final bill which would then be signed into law by President Trump.
The enclosed summary outlines the comparison of the key elements of the House “Tax Cuts and Jobs Act’ (HR 1) and the Senate Finance Committee version. The proposals differ in key elements but the differences do not seem to be irreconcilable following latest talks in Washington DC.
House of Representatives
The House on November 16 voted 227 to 205 to pass the Tax Cuts and Jobs Act’ (HR 1), with 13 Republicans voting against the legislation. The bill proposes to lower business and individual tax rates, modernize US international rules, and simplify the tax law, with significant impact on numerous sectors of the economy. For more details on the House action and next steps in the tax reform process see our November 16 Tax Insight.
Senate Finance Committee
The Senate Finance Committee late on November 16 approved by a vote of 14 to 12 a Senate version of tax reform legislative. For more on the Finance Committee approved bill, see your November 17 Tax Insight.
International business tax reform proposals
Individual tax reform proposals
With House passage complete and Senate floor discussion coming up, the US tax reform makes strong headway. Despite the fact that Congress is on Thanksgiving recess, crucial negotiations and legislative write up are ongoing in the light of upcoming reconciliation process to find middle ground and compromise. Some provisions may still get smoothen out in the reconciliation and negotiation process. This conference is expected to be easier than the healthcare bill as the bills are dramatically similar. If the process continues without delay, a feasible timeline may be for House and Senate to resolve differences and vote to pass a final bill by end of November or early in December 2017 which would then be signed into law by President Trump still in December 2017 or early 2018. The question becomes the calendar with the upcoming Alabama Senator election and the holidays.
What you should do? Follow the debate on the final US tax proposal closely, know your facts and be prepared for change at some point. Stay tuned for the next blogs on US Tax Reform to follow shortly with more specific details for the impact on Swiss groups / US inbounds or what you need to consider for financial reporting. Also, stay tuned for our EMEA Webcast: “How US Tax Reform impacts European Multinationals” next Monday (27 November) from 4:00 pm until 5:00 pm (CET time).
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