The ability to enter into new markets geographically can help drive top line revenue growth, or offer cost-cutting advantages in production and output. Companies expand internationally in one of two ways: organically or through M&A activity. International growth carries with it a number of added risks, the most prominent being currency. With the constant volatility in markets and geopolitical uncertainties in every geographic region (Trump, Brexit, North Korea, Venezuela riots), companies are struggling to centralize this risk.
The White House recently announced its initial tax plan, teasing the financial community with a short series of bullet points. Although there is much work to do to formalize the plan, including passing it through a gauntlet of approvals and negotiations in Congress, President Donald Trump’s plan is effectively music to the ears of CEOs, CFOs and corporate treasurers.
Here are the highlights for corporate treasury:
1) Reduction of the corporate tax rate to 15%
2) One-time tax on overseas earnings
Following the tumultuous U.S. election season in 2016, and to kick-off 2017, corporate accounting, tax and treasury teams have been busy planning ahead for the incoming administration led by Republican President Donald Trump, and the inevitable changes it will bring.