Attention FAE Customers:
Please be aware that NASBA credits are awarded based on whether the events are webcast or in-person, as well as on the number of CPE credits.
Please check the event registration page to see if NASBA credits are being awarded for the programs you select.

IRS to Propose New Rules for Foreign Tax Credit

S.J. Steinhardt
Published Date:
Dec 12, 2023

The U.S. Department of the Treasury and the IRS have issued a notice of their intention to issue proposed regulations regarding application of the foreign tax credit and related rules and the dual consolidated loss rules to certain types of taxes described in the Global Anti-Base Erosion (GloBE) Model Rules, Accounting Today reported.

The GloBE Model Rules are meant to ensure that large multinational enterprises pay a minimum level of tax on the income arising in each of the jurisdictions where they operate. They provide for a coordinated system of taxation that imposes a top-up tax on profits arising in a jurisdiction whenever the effective tax rate, determined on a jurisdictional basis, is below the minimum rate.

These rules are a part of the Pillar Two section of the Organization for Economic Cooperation and Development (OECD) and G20 BEPS Project for addressing the tax challenges arising from the digitalization of the economy.

The notice also extends the period for the temporary relief laid out in Notice 2023-55 in determining whether a foreign tax is eligible for a foreign tax credit under the relevant sections of the Internal Revenue Code, and it addresses the application of the temporary relief with respect to partnerships and their partners.

Some jurisdictions have enacted, and others have proposed, legislation to implement the new rules for fiscal years beginning on or after Dec. 31, 2023, and for the undertaxed payments rule, for fiscal years beginning on or after Dec. 31, 2024, Accounting Today reported. The new notice doesn't provide much guidance regarding the undertaxed payments rule, as the Treasury Department and the IRS are continuing to analyze issues related to it and plan to issue further guidance.

To learn more about international tax issues, attend the Foundation for Accounting Education’s International Taxation Conference on Jan. 23.

Click here to see more of the latest news from the NYSSCPA.