International briefing for March 2017

While the Budget made headlines here in the UK there was little new of note announced from an international tax perspective to distract our attention away from ongoing concerns around Brexit and US tax reform. On the latter it was fascinating to see the terms of a commercial bond issue at the end of February specifically drafted to take account of the current uncertainty around the tax treatment of interest expense. The debt financing in question contained a clause allowing the issuer to redeem the bonds should its tax deductions on the interest payments be eliminated.

This uncertainty mainly arises from the Republican Party’s Blueprint on tax reform released in June 2016 from which President Trump’s campaign tax plan borrowed heavily. One of the proposals in the Blueprint is for the full elimination of net interest expense...