Journal Article

The Impact of the 2017 Tax Cuts and Jobs Act on U.S. Multinationals' Intangible Assets

Abstract: This article investigates the impact of the 2017 Tax Cuts and Jobs Act (TCJA) on the intangibles of U.S. multinationals. We develop a theoretical model that incorporates key provisions of the TCJA—Global Intangible Low-Taxed Income (GILTI) and Foreign-Derived Intangible Income (FDII)—and derive testable implications for changes in licensing and patent transfer patterns. Using data on international royalty flows and patent assignments, we test the model’s predictions. Our findings suggest that the TCJA may have impacted profit-shifting strategies through intangibles, aligning with our model’s predictions.

JEL Classification: F12; O33; O41; O47;

https://doi.org/10.20955/r.2025.04

Bibliographic Information

Provider: Federal Reserve Bank of St. Louis

Part of Series: Review

Publication Date: 2025-03-21

Volume: 107

Issue: 4

Pages: 1-16