Trump, Trade Wars and Corporate Tax Reform: What should Danish companies be aware of?

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Trump, Trade Wars and Corporate Tax Reform: What should Danish companies be aware of?

Date: 28 Feb 2017, 8:30 - 11:00

Host: PwC, Strandvejen 44, Hellerup

What types of tax issues should Danish companies doing business in US be aware of, based on the first few weeks of Trump’s administration?DABF Corporate Tax event at PwC

Trump has talked about leading a major overhaul of the US corporate tax code. At the same time, he’s talked about increasing import taxes on foreign goods. Could this new situation create a need for Danish companies to reconsider their US strategies?  Will it make more sense to establish, for example, manufacturing operations in US rather than rely on exporting to the US, facing high tariffs?

Meanwhile, the issue of the European Commission attacks on governments using low taxes to attract companies (“state aid”) continues. Apple is only one of the companies being fined. What are the most recent developments in this area?

At this event, we enjoyed an engaging discussion with experts from both PwC and Bech Bruun.

Jørgen Juul Andersen, Partner and Head of Value Chain Transformation (VCT), PwC, painted a picture of the trends he is seeing, which imply that Danish companies need to start thinking in a totally new way, because the tax reforms the US will likely implement, including the BAT Border Alignment Tax, will be very hard on businesses trading with, getting royalties, licensing or providing services to the US.

Jørgen outlined primary features of the reform proposals, and gave us detailed comparisons of current law, Obama’s era (Camp 2014 tax reform act (H.R. 1), the Republican goals (House GOP 2016 tax reform ‘Blueprint’) and President Trump’s campaign proposals for corporate tax rates, border adjustments, cost recovery, business interest expense, domestic production, R&D, capital gain taxes and much more.

US Presidential and Congressional Tax Reform proposal features

He mentioned that past advice to Danish companies might have been to produce in say, China, and import to the US, many signs are pointing to advantages for producing in the US. He lined up a hypothetical example of border adjustable tax impact on exports vs imports, before and after the likely reform, and urged companies to begin to rethink their strategies already, to be prepared for different scenarios.

He segued into the next section about State Aid (government support for foreign companies), by talking about how these reforms could make the US a tax haven at 15%, on the level of Ireland, Hong Kong and possibly Hungary.  He talked about the tsunami of cash that would pour into US if these reforms happen, and the impact on the US and indeed the global economy.

Anders Oreby Hansen, Partner, Bech-Bruun, led the session on State Aid after the break, and gave the main message that with BEPS, State Aid crack down, and Trump’s reforms, companies will see the end of the Transfer Pricing world and the need to rethink their strategies.

State aid and taxation in a nutshell Bech BruunFundamental takeaways Bech_Bruun

Danish companies should continue to monitor developments and pending investigations in this area, and should expect their transfer pricing documentation and diligence requirements to change.

Presentations have been sent to participants; if you couldn’t attend, are a member and would like a copy, just let us know at business@dabf.dk!

Agenda

8:30
Registration, light breakfast, networking

8:55
Welcome
Einar Dyrhauge, Executive Director, Danish-American Business Forum

9:00
Trump and taxes
Jørgen Juul Andersen, Partner and Head of Value Chain Transformation (VCT) , PwC

10:00
Coffee break and networking

10:15
Legal or illegal state aid?
Anders Oreby Hansen, Partner, Bech-Bruun

10:45
Q&A, Wrap-up

 

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