The American Jobs Creation Act: International Tax Provisions
By Douglas A. Schaaf
The genesis of the American Jobs Creation Act of 2004 was the finding by the World Trade Organization that tax benefits provided to American corporations by the provisions in the Internal Revenue Code under the extraterritorial income exclusion constituted an illegal trade subsidy. The recent focus on the impact of the United States tax laws upon the international competitiveness of United States companies combined with the necessary repeal of the offending ETI Provisions, required Congress to examine many provisions of the United States tax laws in light of the multinational marketplace in which United States companies compete. This Congressional review produced the most significant changes in the United States tax laws governing multinational activities since the Tax Reform Act of 1986. In this alert, we summarize the major international tax provisions of the legislation.