Dear AMCHAM members,

On December 22, 2017, U.S. President Donald Trump signed the Tax Cuts and Jobs Act (“Trump Tax Reform”). The new law brings in sweeping changes to how the U.S. taxes international operations. One of the biggest changes is the adoption of a modified territorial tax system, which generally exempts dividends paid by foreign subsidiaries from U.S. taxation, and correspondingly, disallows tax credits for foreign taxes incurred with respect to any such dividends. Additional changes include provisions targeted to encourage investments back into the U.S., limit the benefit of deductible payments to foreign related parties, and limit the deductibility of hybrid payments. It is clear that the Trump Tax Reform will have a major impact on U.S. MNCs operating abroad as well as the U.S. operations of foreign MNCs.

Moreover, with recent changes in Korean tax, for first time in history, the Korean corporate tax rate (27.5%) will be higher than the U.S. corporate tax rate (21%).

So, what does this all mean? U.S. MNCs will clearly be incentivized to re-organize their value chains in a tax optimal manner, including potentially re-structuring the operations of Korean subsidiaries. Given the size and importance of the U.S. market, foreign MNCs will also need to carefully consider the profile of their U.S. subsidiaries.

This breakfast tax seminar will highlight some of the key international tax law changes under Trump Tax Reform.  Dave Sohn will provide a quick overview of the relevant provisions, then, he will moderate a panel discussion by members of law and accounting firms, who will provide additional insights on how their U.S. and Korean clients are dealing with the recent tax law changes that have occurred both in Korea and the United States. We encourage you to register for what we anticipate will be a very informative breakfast meeting.

Sincerely,

AMCHAM Taxation Committee Co-Chairs
Henry An, Jay Shim and Sim Seo