MEMA Webinar Addresses Recent Tax Reform Changes

Date: February 1, 2018

MEMA Industry News

Following the recent passage of tax reform by Congress, MEMA provided members of AASA, HDMA, MERA and OESA with a webinar review of changes to tax laws and the impact on vehicle suppliers on Jan. 29.
More than 100 division members signed up for the webinar, and the presentation was led by Kortney Wallace of KPMG. She addressed key points in the Reform Act:

  • Reduction in the corporate rate to 21 percent and repeal of the Corporate Alternative Minimum Tax (AMT)
  • Expensing for investments in depreciable property
  • Limits on Net Operating losses (NOL)
  • Mandatory Repatriation
  • Global Intangible Low Taxed Income (GILTI)
  • Foreign Subsidiary Taxation and Foreign Derived Intangible Income (FDII)
  • Base-Erosion Anti-Abuse Tax (BEAT)

Key observations from KPMG included:

  • Taxpayers with nominal amounts of U.S. taxable income may likely be subject to BEAT.
  • Use of tax credits may ultimately result in BEAT liability.
  • Payments for engineering services made to foreign subsidiaries may need to be restructured.
  • Apportionment of expenses may result in tax liability relating to GILTI inclusion for the majority of taxpayers (effectively current taxation on foreign earnings).
  • Application of foreign tax credit to taxpayers with large overall foreign losses produce surprising results.

The presentation was followed discussion and by a Q&A session. Future webinars are planned to address other congressional or regulatory actions impacting suppliers: watch for more details on the MEMA website.


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