The US IRS on December 2 issued comprehensive final and temporary regulations addressing the foreign tax credit.
The new regs finalize a portion of proposed regulations published on December 7, 2018. These regulations are needed to clarify many changes made to the foreign tax credit arising from the 2017 Tax Cuts and Jobs Act (TCJA) overhaul of the US international tax system.
The IRS said that the basic structure of the proposed regs was retained though revisions were made.
The IRS also finalized proposed regulations on overall foreign losses that were published on June 25, 2012, and portions of proposed regulations published November 7, 2007, relating to a US taxpayer’s obligation to notify the IRS of a foreign tax redetermination.
Further, proposed guidance [REG-105495-19] was issued that also relates to TCJA changes to the foreign tax credit. This guidance covers the allocation and apportionment of deductions and foreign taxes, the definition of financial services income, foreign tax redeterminations under section 905(c), the disallowance of certain foreign tax credits under Section 965(g), and the application of the foreign tax credit limitation to consolidated groups.
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