ARTICLE · 10 JANUARY 2023

Tax Implications Of Recent Federal Legislation For Technology Companies

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Tax Implications of Recent Federal Legislation for Technology Companies, Douglas Sayuk, Practical Tax Strategies January 2023 Issue. Copyright 2023 Thomson Reuters/Tax & Accounting

The tax landscape for technology companies has shifted dramatically over the past five years. Beginning with the 2017 Tax Cuts and Jobs Act ("TCJA"), U.S. tax policy has taken a notable shift toward incentivizing domestic commercial activity. This was accomplished in part through a dramatic reduction in the U.S. corporate tax rate to 21%, establishing an effective global minimum tax via the global intangible low-taxed income (GILTI) regime, eliminating some tax deductions on outbound transfer pricing payments via the base erosion and anti-abuse tax (BEAT), and incentivizing export sales through taxing foreign derived intangible income (FDII) at an effective reduced rate.

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