U.S. Business Coalition Pushes for Tax Overhaul After BEPS

By Alex M. Parker

Nov. 17 — Some of the most profitable technology firms in the U.S. have formed a coalition to push for an international tax overhaul in the wake of the OECD's completion of its Action Plan on Base Erosion and Profit Shifting (BEPS).

“The die has been cast, and the United States stands to lose major corporate investments and tax revenue unless Congress addresses international tax reform,” wrote Lisa Camooso Miller, spokeswoman for American Innovation Matters, in a released statement. “The United States needs a competitive tax code or we will fall behind.”

American Innovation Matters comprises several prominent U.S. companies, including Apple Inc., Intel Corp., Adobe Systems Inc., Boeing Co., Cisco Systems Inc., Facebook Inc. and McGraw Hill Financial Inc., according to the release.

Miller also noted the OECD's qualified endorsement of a patent or innovation box as part of the BEPS project, which requires that the reduced rate apply only if significant research and development associated with intangible assets occurred within the jurisdiction.

Income tax rates for a patent box typically range from 5 percent to 15 percent, compared with the statutory U.S. rate of 35 percent, according to Miller.

Many industry groups have begun to lobby Congress to pass a patent box, fueled in part by fears about job losses in the U.S. (24 Transfer Pricing Report 123, 6/11/15).

To contact the reporter on this story: Alex M. Parker in Washington at aparker@bna.com

To contact the editor responsible for this story: Molly Moses at mmoses@bna.com