WASHINGTON: However they said the tax continued to be flawed and potentially damaging to expatriates who owned stakes in overseas businesses, and that they would continue to campaign for it to be eliminated.
As a result of the extension, which was announce yesterday, the first payment Transition Tax payment, for those American individuals who will be required to make it, will now be due on 15 June rather than 15 April.Transition Tax” was introduced by the Tax Cuts & Jobs Act 2017, which took effect on 1 January. It requires American citizens who own as little as 10% of an overseas business to pay a one-off levy on un-repatriated foreign earnings, set at 15.5% on cash and 8% for other assets. The tax was intended to target such large multi-national American companies as Google and Apple, which have recently been criticised for keeping the profits they’ve been making offshore out of the US government’s tax coffers.
There is still a lot of work to do, as the 17.5% Transition Tax continues to threaten overseas American business owners with bankruptcy,” Republicans Overseas’ vice chairman and chief executive for the Solomon Yue said, using a 2% higher figure for the likely cost of the transition tax for those who have to pay it than the government’s 15.5%, which reflects an independent assessment by a Canadian specialist in American expatriate tax matters.
The American Citizens Abroad said it was “grateful” that the Treasury and IRS had realised the difficulty taxpayers would have had in meeting a 15 April deadline, but noted that it had “asked not only for more time, but also requested a which would remove small taxpayers from the scope of the tax” altogether.