The new tax law, passed by Congress and signed by President Trump before the end of last year, has set off a bonanza in investments, acquisitions and operations extensions for companies as we go further into the new year. The slashing of the corporate tax rate from 35 percent to 21 percent, in other words a 14 percent cut, will be enormously beneficial for U.S. business over the long run. As has been well publicized, Apple has decided to bring $252 billion of its assets held overseas back to the United States, while companies like Verizon, more quietly, are planning to use the new law to pay down their debts, donate to charity and give stock to employees.
There will be new, unforeseen levels of profits and opportunities to make them. The Wall Street Journal noted that companies in the S&P 500 stand to see profits rise by 7-8 percent as a result of the law. At the same time, its long-term impact on investment and the economy generally remains unclear. And any new tax law, even a massive tax cut, will send business scrambling. Amendments to statements in light of new tax policy must be made within the first quarter of the year that it becomes law. Essentially, businesses now have less than two months to catch up. For those businesses, like Apple, that want to repatriate their cash, this means having to go through 30 years of statements (since the last major tax law) to provide investors with a number for their savings in the next earnings report.
The policy will affect entities of all sizes. Many businesses are considering how to restructure so they can make the most of the potential advantages the law now allows them. This post is to highlight the most significant of these advantages - for entities of any size.
-
Repatriation of Assets
-
Discount on Acquisitions
-
New Opportunities to Invest
Conclusion
The new tax law presents tremendous new opportunities for any firm located in the United States. However, these opportunities are limited, and even ephemeral. It allows huge savings to be applied to the bottom line or to new investments. But this is a one-time gain. The new tax rate becomes the new normal, with further growth not tied to the federal government's largesse. It is essential in the next few months that all firms assess the ways in which they can benefit from the new tax policy and begin to restructure their operations and assets accordingly. This doesn't require you to reinvent the wheel. Diligent's entity management software, part of our Governance Cloud, offers a number of elegant, effective and affordable solutions to assist with the restructuring process for firms of any size. We're ready to help you through this transition period in any way we can. Please call or email us to discuss our solutions.What is the Governance Cloud?
Board directors are obligated to perform a host of varied duties and responsibilities. Diligent developed a suite of governance tools to help them fulfill their responsibilities accurately and efficiently. The Governance Cloud ecosystem of products includes:- Diligent Boards
- Director and officer questionnaires (pre-filled forms)
- Board evaluations
- Resolutions and voting
- Diligent Messenger
- Diligent Minutes
- Insights (curated content and videos) (beta)
- Entity Management
Media Highlights
Environmental, social and governance (ESG) issues have become more complex and multifaceted than ever before. At the same time, ESG continues to ascend on board and leadership agendas.
In this buyer’s guide, we explore what a market-leading ESG solution should look like and highlight the key areas organisations should be prioritising as they embark on their search.