The Strategist

US business repatriated nearly $1 trln after Trump's tax reform


09/23/2019 - 12:09



Since the tax reform came into force in early 2018, companies have repatriated about $ 1 trillion of foreign profit. This is stated in the message of the US Department of Commerce.



GoSimpleTax via flickr
GoSimpleTax via flickr
In the second quarter of 2019, $ 88.3 billion of corporate profit received abroad were returned to their homeland.

US President Donald Trump, while promoting the reform, said, without mentioning sources, that such measures would help return over $ 4 trillion to the country. Investment banks and analysts estimated the total amount of funds of American companies stored on foreign accounts in the range from $ 1.5 trillion to $ 2.5 trillion.

According to the Ministry of Commerce, the rate of return of funds from abroad is steadily decreasing: in the first quarter, the volume of repatriated funds amounted to $ 96 billion, in the fourth quarter of last year it was $ 146.6 billion.

American companies have avoided repatriation for years so as not to pay high taxes. In order to solve this problem, as part of a change in the tax system at the end of 2017, the lump-sum tax on repatriation was reduced from 35% to 15.5% for cash and 8% for non-cash or illiquid assets.

In 2017, before the tax changes came into force, the volume of repatriations amounted to $ 155 billion for the whole year.

source: cnn.com