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June 25, 2015
WASHINGTON, DC, June 25, 2015 — Covington partner Dirk Suringa testified yesterday before the U.S. House Ways and Means Subcommittee on Select Revenue Measures on the need to reform the proposed taxation of U.S. corporations’ earnings held abroad as a source of funding for the Highway Trust Fund.
Mr. Suringa’s testimony focused on two recent developments: the Organization for Economic Co-operation and Development’s Base Erosion and Profits Shifting (BEPS) Project, which has led to increased double taxation of U.S. companies operating abroad; and the recent proliferation of foreign research tax incentives called “patent boxes.”
“The combination of aggressive source taxation of U.S. multinationals with new tax incentives to relocate their research personnel abroad puts further pressure on the U.S. tax system and presents a compelling case for addressing at least some aspects of international tax reform now,” Mr. Suringa testified.
“The most effective way to address these challenges would be comprehensive U.S. tax reform, in which the U.S. brings its corporate income tax rate, as well as its approach to taxing foreign income, into closer conformity with that of its major trading partners,” he testified. “The adoption of an innovation-friendly exemption system for taxing foreign income, and the adoption of a U.S. innovation box, could be taken as first steps towards more comprehensive tax reform.”
Prior to Covington, Mr. Suringa served as attorney-advisor in the Office of International Tax Counsel in the U.S. Department of the Treasury.
Mr. Suringa’s testimony can be found here.