U.S. Tax Reform- Can Canadian Tech Beat This?

Canadian tech companies are seeing opportunity as well as risk when it comes to the Trump Plan and the House Blueprint and how they propose to reduce the top corporate rate. Both Canadian companies and individuals doing business in the U.S for the tech industry are taking note of what may come in the U.S. tax reform.

The U.S has reduced corporate tax rates in hopes that this would boost the U.S competitive tax landscape. In return this is something that could offer opportunities for Canadian tech companies that are thinking about expanding to the U.S.

The U.S could either match the Canadian tax rate or even lower it. This then leaving Canadian businesses the chance to structure their tax planning to take advantage of this possible change.

Startup companies that have already been running may run into trouble if the U.S. tax reform does arrive in the future. Startup companies that have opened without the requisite tax planning may avoid tax repercussions at the beginning of their business. By the time the U.S. tax reform does arrive the company may have already created issues that will prove to be costly to clear up in the end. Startup companies do tend to lose money in the first few years in tax losses, and the U.S. tax reform could cause even more losses for these companies if it does arrive in the future.

In today’s world tech companies are known for their fast pace and how quickly things are able to change in terms of their operations and business model. However, changes in tax legislation do not necessarily move as quick as we’d like and move more at their own pace as it takes time for changes to happen.

The details of this proposed U.S. tax reform are still unclear and there is still uncertainty. At this point we are unsure of what will exactly happen.

If you would like to find out more about how your business could benefit from R&D Tax Credit, contact a Swanson Reed R&D Tax Advisor today.