Obama might back territorial tax system, business chief says

WASHINGTON Thu Jan 31, 2013 1:31pm EST

WASHINGTON Jan 31 (Reuters) - The president of a group of more than 200 CEOs said on Thursday that President Barack Obama had told the business community last month he might back a territorial tax system, which would exempt offshore profits from taxation.

Corporate America is pushing for the United States to move to such a regime, which they say would make domestic business more competitive.

John Engler, president of the Business Roundtable, said that in meetings with Obama during a year-end budget standoff between the White House and Congress, the president left the impression he was moving in that direction.

"A favorable impression was left," Engler said in a briefing with reporters on Thursday.

A territorial system would exempt most domestic companies' offshore profits from U.S. tax. That contrasts with the worldwide system now in place, whereby all offshore profits are taxed when they are brought back into the United States.

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