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Thursday April 28, 03:16
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Tax break law leads to repatriation of funds
(by Dr.Goldfinger)
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The repatriation of funds allowed under a tax break law can turn into an issue among the countries as they are quite reasonable with the withdrawal of capitals and may postpone the repatriation until the second half of the year.
The American Jobs Creation Act passed last year says that the US companies that repatriate funds from abroad will pay an effective tax rate of 5.25% on them, while the standard corporate rate is 35%.
The law, adopted to create more jobs, is expected to encourage companies to invest within the US. Still, companies seem to hesitate whether the move could lead to any result.
Some companies have already repatriated their funds from abroad. Wolverine Tube Inc., of Huntsville, Ala., transferred $10.2 million from its Chinese subsidiary in February. Mattel Inc., El Segundo, Calif.-based toy maker, will repatriate this month about $2.4 billion, resulting in a tax liability of $180 million.
Some analysts predicted the total of repatriated funds to amount to $300 billion, promoting domestic investments and boosting jobs in the US.
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