BDO USA: U.S. Treasury Issues Proposed Regulations to Final Foreign Tax Credit Regulations (November 2022)

Micheal Masciangelo and Tiffany Ippolito of BDO have published an article, “U.S. Treasury Issues Proposed Regulations to Final Foreign Tax Credit Regulations” published in BDO USA. The article begins as follows: 

The U.S. Department of the Treasury on November 18 released proposed foreign tax credit (FTC) regulations  that provide additional guidance on several key areas of the 2021 final FTC regulations, most notably the cost recovery requirement and the attribution requirement for royalty withholding tax. Both areas have created concern for taxpayers since the 2021 final FTC regulations were issued in December 2021. 

The 2022 proposed FTC regulations set forth two new safe harbor tests in an effort to reassure taxpayers that some of their foreign taxes should still be eligible for a U.S. FTC. (For prior coverage of the final FTC regulations and subsequent technical corrections, see BDO’s Aug. 2022 alert).

The 2022 proposed FTC regulations also remove the reattribution asset rule for allocating and apportioning foreign tax on a remittance in the case of disregarded property sales, and with respect to disregarded sales of inventory property.

To view the full article, click here: “U.S. Treasury Issues Proposed Regulations to Final Foreign Tax Credit Regulations

Posted by Melissa Zheng, Associate Editor, Wealth Strategies Journal. 

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