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Obama tax clampdown

US President Barack Obama may face a political battle to close a tax loophole that allows American multinationals based here to avoid paying taxes on overseas profits.

Mr Obama wants to impose a one-off 14pc tax on US profits stashed overseas as well as a 19pc tax on any future profits as they are earned.

At present, those earnings are supposed to be taxed at a 35pc rate, but many companies avoid that through the loophole that defers taxation on active income that is not brought into the US.