US President Donald Trump’s tolls Audi in US courtsAnother of their laws can arise the American tax system.
Investing banks and law agencies have warned that this stage is just as important as the influence of duty on investors.
The “One Big Beautiful Bill Act”, which passed through the US House of Representatives last week, includes the most widespread changes in the tax treatment of foreign capital tax in the US under a provision called Section 899. The legislation should still be approved by the Senate.
“We see that this inscription is creating a scope of converting trade war into a capital war if the US administration wants,” said George Sarvelos, global head of Daichi Bank’s FX research on Thursday.
“Section 899 has added a note to Sarvelos customers in the” US Capital Markets in Law Arsmanship “, saying,” The US capital markets is clearly used to further increase the tax on foreign holdings of US assets. “
The Section 899 bill states that the “discrimination of foreign countries” – imposing tariffs such as digital service taxes that inadequate US companies.
For example, France has a 3% tax on income from online platforms, which primarily target large technology firms Google, Amazon, FACEFICKAnd Apple. Germany Reported to be considered being considered Similar tax is 10%.
What does the proposed tax do?
Under the new tax bill, the US will hit investors of such countries by increasing the tax on US revenue by 5 per cent per year, which takes up to 20%.
Emanuel CAU, the head of the European Equity Strategy of Barklace, suggested that the only passage of tax legislation would make dollar assets less valuable.
“In our view, this is a danger to US income companies, and the Payment Rule (UTPR), which has been implemented by the Digital Service Tax (DST) or the Taxation of the OECD, has been implemented in countries where the Payment Rule (UTPR) is implemented,” CAU said in a note on Friday.
He highlighted companies like London-listed Compass groupIt provides kitchen services to US schools, and Interface hotelsIt is likely to be affected by the proposed law, with at least 25 luxury hotels in the US.
“We have the opportunity to outflow of the capital if we pass through its current form through the S899 Senate,” he said.
The influence of the bill is not limited to European companies or individuals of those states.
The bill is “some US persons and business, government and other units significantly increases the tax rates that are applied to business, government and other units,” said Max Levine, head of the US tax firm, Max Levine Linklator.
This means that it can also be trapped by governments and central banks, which are great investors US Treasures. France and Germany, for example, had a combination 5 475 billion The value of US government bonds by March.
The proposed tax reduces the revenues of the US treasury to those investors, adding that “the actual yield of the US treasures drops about 100 bps”. “It is obvious that the adverse effect on the demand of USTs and the use of the US twin deficit at a time when it is more needed”.
“This is very bad,” said Beat Whitman, president of Porta Advisors based in Switzerland. “It’s bigger – it’s just a piece of the overall project and it is perfectly stable about this administration.”
“The final judge is not our opinions for this, it is a bond market,” Whitman added. “The US Bond Market is offering discounts of these developments, and in the last few weeks we have seen, if there is a safe haven, investors clearly prefer German bunds. “
There is also Australia’s largest pension fund with US investments Reported to be associated with a billSince Australia is managing the subsidy project of Medicines, it is opposed by large US CE companies.
Legal experts from Mayor Brown Legal Institute suggest that Trump can make “significant changes” in the bill while passing through the US Senate before he asserts in the law.
“Similarly, there may be questions whether the provisions of the proposal to override tax contracts can be included in the US Senate Tax Bill Edition,” said Mayor Brown’s experts.
