Tech, Drug Firms Face More Taxes if Income Shifting Limits Adopted

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President Obama's budget proposal to tax “excess returns” associated with transfers of intangible assets to offshore affiliates is likely to result in larger tax bills for the high-tech and pharmaceutical sectors, as well as other industries that get their money largely from intellectual property, analysts tell BNA. While the administration is vague on the details of the proposal, tax professionals say it is clearly intended to expand on other international tax efforts to prevent companies from shifting income to lower tax jurisdictions. Analysts say the proposal came as a surprise to many, but fits with the administration's previously declared goals of cracking down on the use of tax havens by multinational firms.