Taxes

Taxation in the United States of America: Guide

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Taxation in the United States of America: Guide. The tax system in the United States of America for individuals and companies. Overall report to understand US taxation between worldwide and territorial taxation.

The United States tax regime revolves around federal, state and local taxation. Despite what it may seem at first glance, the taxation system in the United States is one of the most favourable in the world (leaving aside tax havens) for businesses. The transition, which took place in 2018, from the “worldwide” taxation system to a “territorial” taxation system has influenced the country’s economic growth, attracting foreign companies to relocate locally.

As anticipated, state taxes and those of some municipalities must therefore be added to federal taxes. Generally, any natural or legal person who produces sells goods or services or is a member of a Partnership, or Limited Liability Company is subject to the tax jurisdiction of the United States.

When we talk about the tax system in the United States we must refer to the tax reform, Tax Cuts and Jobs Act (“TCJA”), strongly supported by President Donald Trump and the Republican party.

This tax reform came into effect on December 22, 2017, and has radically changed the taxation system in the United States of America. Among the main changes: lowering of corporate income tax, doubling the deductible on inheritance tax, and finally, the modification of the tax brackets.

This is an integral modification of the American tax system, with a reduction in taxes never made before.

Taxation in the United States: Introduction

In this report, I have decided to analyze the tax regime of taxation of individuals and companies after the Trump reform. It is, as you can understand, an unprecedented tax reform. The United States, in fact, has always been the first country in the world to support the worldwide taxation principle. The principle according to which income must be subject to taxation in the country of tax residence, regardless of where it is received.

This is a principle that is a direct reflection of personal income taxation. The principle that is derogated for the benefit of a territorial type regime.

So let’s see the main elements of the reform of the US tax system in the next articles.

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