Tax Tides of Change: How the US Presidential Election Will Reshape the Tax Landscape for Domestic Companies

Considering President-elect Donald Trump’s campaign pledge “Agenda 47” released during his election campaign and tax-related matters presented at various campaign sites, as well as various tax law amendments being promoted by the Republican Party, many changes are expected in tax policy.

The main tax policy directions are summarized below.

• Promoting economic growth through tax cuts and tax and regulation relief that favors the wealthy and corporations.
• Expected to ease corporate tax burden for companies in the U.S.
• There is uncertainty regarding the abolition of IRA, etc. due to necessary procedures and consideration of beneficiary region.
• In the case of domestic global companies with investment structures in North America or Central and South America through U.S. holding companies, there is concern about additional tax burden due to strengthened GILTI.
• For companies with an overseas export transaction structure through a U.S. base, the tax efficiency of the export structure needs to be reexamined due to the effect of FDII reduction.
• The possibility of trade disputes increases due to the nationalistic actions of ‘America First’.

For domestic companies entering the U.S. market, it is necessary to closely review changes in the U.S. tax system and analyze their impact in detail to build a wise strategy.