Influential US senator calls for territorial tax system, says US should consider patent box

US Senator Orrin Hatch, expected to be the next chairman of the Senate Finance Committee, released a report December 11 which calls for the US to adopt a territorial tax system and suggests that the US consider adopting a patent or innovation box.

The report, titled “Comprehensive Tax Reform for 2015 and Beyond” and prepared by Senate Finance Committee Republican Staff, also says that moving to a system of worldwide tax with no deferral would be bad tax policy as it would place US corporations at a competitive disadvantage, and discusses proposals to prevent corporate inversions.

The report also concludes that the US needs to rethink its practice of taxing nonresident US citizens.

 

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