In the international transactions accounts, income on equity, or earnings, of foreign affiliates of U.S. multinational enterprises consists of a portion that is repatriated to the parent company in the United States in the form of dividends and a portion that is reinvested in foreign affiliates. In response to the 2017 Tax Cuts and Jobs Act, which generally eliminated taxes on repatriated earnings, some U.S. multinational enterprises have repatriated accumulated prior earnings of their foreign affiliates. When the repatriation of dividends exceeds current-period earnings, negative values are recorded for reinvested earnings (see chart below). The reinvested earnings are also reflected in the net acquisition of direct investment assets in the financial account. For more information, see “How does the 2017 Tax Cuts and Jobs Act affect BEA’s business income statistics?” and “How are the international transactions accounts affected by an increase in direct investment dividend receipts?”
The chart is based on data presented in Table 4.2. U.S. International Transactions in Primary Income on Direct Investment, lines 2–4.