The Payment of Taxes in the USA. The payment of taxes is annual, but an advance quarterly payment is often required based on the estimated revenue for the current year.
Information, forms for the tax return and publications of the American tax authorities can be obtained from the Internal Revenue Service (in short “IRS”) also by written request to the following addresses:
For the Eastern United States and overseas countries: Eastern Area Distribution Center, P.O. Box 85074, Richmond, VA 23261-5074;
For the central part of the United States: Central Area Distribution Center, P.O. Box 8903, Bloomington, IL 61702-8903;
Finally, for the Western United States: Western Area Distribution Center, Rancho Cordova, CA 95743-0001.
Taxation in the united states: conclusions
In the more than 500 pages of the tax reform text, significant and complex changes have been introduced to the U.S. tax system, with profound repercussions both internally and internationally.
American companies are certainly benefited by obtaining a significant cut in the taxes they pay.
Attracting Foreign Investments
However, this is only a small part of the reform. The other major implication is the U.S.’s ability to attract international investment and capital.
Do you think that there are over 3 trillion dollars abroad which could partly go back to the United States.
Some of them to be invested in the United States taking advantage of the next five years of immediate deductibility of investment expenses or to be distributed as dividends to the owners of shares.
Such a massive transfer of capital may have a negative effect on some European banks. However, I don’t think there is anything to fear for Italian banks because deposits of this money are not usually located in Italy.
Return of production activities in the USA
A more worrying effect, on the other hand, concerns the choices of the location of productive investments. Trump’s manoeuvre is clearly destined for the return of manufacturing activities to the United States.
Some investments could be induced to return to America (again, thanks to the immediate deductibility of investment expenses and the lower corporate tax).
But also some European companies could be induced to locate the head office in the United States also because those that today already had branches there and that perhaps tried to avoid paying taxes in America by transferring goods and services will have a more difficult life from today.
For this reason, a response from Europe on the level of taxation of business profits and the deductibility of investment expenses would be appropriate (and expected).