Repatriating Funds

Paper Summary:

The paper addresses the factors to consider when making the decision to repatriate funds from a foreign subsidiary, such as the direct/indirect U.S. and foreign tax rates, tax credits availability and the capacity to use repatriated funds. The paper discusses strategies to employ once the decision has been made to repatriate, including direct ownership to avoid taxes and borrowing from third parties. The paper explores the advantages and disadvantages of each strategy.

Outline:
Objective
Introduction
Repatriation Opportunities
Results of Repatriation of Funds
Issues Addressed By Multinational Corporations
Repatriation Concerns-CFO Research
Permitted Investments Under Section 965
Investments Not Permitted Under Section 965
Economic Growth Effects of Repatriation
Forecasted Growth By State
Rules Applicable to the Deduction
Sample Portfolio Strategies
Summary and Conclusion

From the Paper:

"Repatriation provides the U.S. companies an opportunity to move the foreign assets back to the U.S. without suffering tax consequences of any significant nature however, estimates are varied dependent on how much money that is represented. Estimates from the Joint Committee on Taxation has projected approximately $150 billion in repatriated income however the New-York based JP Morgan Chase has estimated the amount to be approximately $425 billion meaning that a gain from $8 billion to $22 billion in corporate income tax revenue would be gained by the U.S. Treasury."

Sample of Sources Used:

• Midsized Companies Can Save on Taxes by Repatriating Foreign Income (2005) Advantage September 2005 http://advantage.hanleywood.com.
• Rubino, Robert C. (2005) Leveraging the Earnings Repatriation Tax Incentive with an Asset-Based Loan. CapitalEyes. August 2005 Bank of American Online available at: http://www.bofabusinesscapital.com/resources/capeyes/a08-05-296.html
• Rogers, Celina (2005) Risk and Section 965 Repatriation CFO Research Services October 20, 2005. Online available at: http://www.cfo.com/printable/article.cfm/4486225/c_5541231?f=options.
• Repatriation of Offshore Funds American Jobs Creations Act 2004 IRC Section 965 (2005) Bridgebay Financials 17 March 2005 Online available at: http://www.bridgebay.com/BBFIArticles/NWAFPSeattle2004/AJCA2004.pdf
• Bezozo, Ken (2005) Truth of Consequences in the Repatriation Act" Forbes Online 5 February 2005. Online available at: http://www.forbes.com/business/2005/02/25/cx_kb_0225earnings.html

More papers on Repatriating Funds:

• Essay # 36645 : "Slavery and Repatriations"
• Analytical Essay # 121774 : "Starting a Business in Brazil"
• Term Paper # 96204 : "Country Risk and Strategic Planning"

APA Citation:

MLA Citation: