First Look: US IRS releases proposed FDII regulations

The US IRS on March 4 released proposed foreign-derived intangible income or FDII regulations. 

The FDII provisions, added in the 2017 Tax Cuts and Jobs Act, are designed to encourage companies to locate their intellectual property in the US. The new rules provide for reduced taxation of “deemed intangible income” attributable to sales of property or performance of services to foreign persons.

The proposed regulations provide guidance on the computation of the section 250 deduction and the determination of FDII. They also provide rules for the computation of FDII in the consolidated return context and rules for filing the Form 8993

MNE Tax expects to publish an in-depth look at these new regulations shortly.