United States: Awaiting enactment of tax reform - what actions to consider now

Dec 2017

The US Congress has made dramatic progress pursuing historic tax reform. A House and Senate conference committee resolved differences in the two versions of tax reform legislation and Congress passed a final bill (hereinafter the Bill) on December 20, 2017. The final Bill was signed and enacted into law when signed by President Trump on December 22, 2017. For a high-level summary of the final Bill provisions, please see the Global Mobility Insight.

Actions to consider now

Given the potentially very short window between enactment and the effective date of many provisions, companies with globally mobile workforces should consider what actions may be warranted now.

Employers with tax reimbursement or ‘equalisation’ type policies for globally mobile workforces should consider immediately whether and how their policies would apply under tax reform. They should identify areas of possible inconsistency or unintended results, and consider what changes to such policies may be appropriate given the enactment of the new tax law. Policy revisions can require approval from various stakeholders who will consider cost, fairness to employees, and process impact. Employers also should confirm whether revisions for employees currently covered under a tax reimbursement policy may be implemented immediately based on the specific terms contained within the policy or plan.

In addition to tax reimbursement policy modifications, consideration also should be given to other impactful actions that can be taken by employers as well as individuals. The cost and benefit of changes related to tax reform and planning opportunities will vary on a case-by-case basis, with cost/benefit recipients often depending on whether employees are held to a US or non-US hypothetical tax or no hypothetical tax at all.

Legislation has virtually immediate effect

The new law contains a lengthy list of changes. Many provisions represent a significant change from current law with virtually immediate effect. This Insight provides a practical guide of critical actions that employers with mobile workforces should consider based on the new final Bill.

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