Multinationals Derive Huge Benefits From Shifting R&D Abroad

Elvera Bartels

When the Tax Minimize and Jobs Act (TCJA) was signed into law by President Trump in December 2017, its steep reduction of the U.S. company tax amount from 35% to 21% resolved what was greatly deemed the principal factor in companies’ shifting investments and gains overseas — particularly, the disparity amongst the U.S. tax amount and the a lot decreased rates prevailing in some other nations. In a selection of public community forums, American multinationals had before been strongly upbraided for accounting maneuvers that shifted to low-tax overseas venues money derived from exploration and advancement (R&D) at home.

New exploration in a main accounting journal phone calls into dilemma just how productive the TCJA tax reduce may turn out to be in stemming the outflow.

A study in the present challenge of The Accounting Overview finds that even before the law’s enactment overseas gains of U.S.-based multinationals were not boosted

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