Barnes Dennig Transfer Pricing After Tax Reform and COVID-19 120920 - BD | Page 33
WHAT SHOULD MULTINATIONALS CONSIDER ? OUTBOUND
For profitable companies : Lower tax rates incentivize U . S . investments
• New US R & D activities = higher royalty rates
• New / Upgraded US plant = higher goods prices Tax benefit – additional U . S . tax , lower foreign tax
• Larger deductions at subsidiaries
Under CARES Act - for loss-making companies :
• Could additional carryback NOLs generate cash ?
• Potential for refunds at a 35 % rate ?