U.S. Tax Bill May Inspire Cuts Globally, While Fueling Trade Tensions<br />The European Commission, which manages the European Union, objected to a tax break<br />that companies in the United States would get for so-called foreign-derived intangible income — money they make from selling property or services abroad.<br />Mr. Zhu did not offer details about the measures China might take, but they could include streamlining regulations<br />that foreign businesses face, or deferring certain taxes if money is reinvested locally, according to Andrew Choy, a tax partner for Greater China at EY.<br />“Companies know that when they send money to China, it’s basically a one-way gate,” said Christopher Balding,<br />an associate professor of finance at the Peking University HSBC School of Business in Shenzhen, China<br />“There will be pressure for a new round of lowering corporate taxes,” said Stefano Micossi,<br />the director general of Assonime, an Italian association of publicly listed companies.<br />The tax “may harmfully distort international financial markets,” a group of European<br />finance ministers wrote to officials in the United States last week.<br />“The commission will reflect on all possible measures<br />that may need to be taken if the bill enters into force as agreed today,” the commission said in a statement.<br />“The external impact of tax policy change in the world’s largest economy cannot be overlooked,” Mr. Zhu said, according to Xinhua.<br />The new rate — down to 21 percent, from 35 percent — takes the United States from the top of the global tax spectrum to the lower end.
