A Tax Reversal

Our friends at Seward & Kissel have brought to our attention a proposed devastating change in the tax law that de facto would treat all foreign shipping companies operating out of the U.S. as U.S. taxpayers. The proposal, introduced by Senator Levin, appears in the bill entitled “Stop Tax Haven Abuse Act” (S. 506). Historically, companies have been taxed as domestic or foreign based upon where the company was formed. With this proposal, we would revert to the British system of taxation based upon where the company is managed and controlled.

“Section 103 of the Levin Bill (“Section 103″) would tax foreign corporations as though they were United States domestic corporations if:

(1) either (a) they have aggregate gross assets of $50 million or more

This is only an excerpt of A Tax Reversal

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