US Treasury Unveils Rules for One-Time Tax on Repatriated Profits From Overseas

WASHINGTON August 1 (Sputnik) - US companies that repatriate untaxed profits earned overseas will have eight years to pay-off a one-time 15.5 percent levy under the recently passed tax-reform legislation, according to regulations unveiled by the Department of the Treasury on Wednesday.

"The proposed rules address a one-time transition tax on post-1986, untaxed foreign earnings of specific foreign corporations owned by US shareholders," a press release announcing the regulations said. "Generally, the transition tax can be paid in installments over an eight-year period."

The Tax Cuts and Jobs Act treats these foreign earnings as repatriated and places a 15.5 percent tax on cash or cash equivalents, the release explained.

READ MORE: Trump: 'Globalist' Koch Brothers Want to Protect Firms Outside US From Taxes

An additional 8 percent tax will be imposed on the "remaining earnings," an undefined term that apparently refers to untaxed profits that a company chooses to keep outside the United States, according to the release.

Prior to the tax-reform law approved late last year, US companies held an estimated $4 trillion in overseas earnings in offshore accounts, presumably to avoid paying a 35 percent tax then in effect, according to published reports.