The US developments are centered around the new regulations for BEAT and Foreign Tax Credit (FTC).
The new BEAT regulations include:
- Excludes non-recognition transactions re: Sec. 332, 351, 355, and 368
- Allows foregoing a deduction, albeit it will be for all US federal tax purposes
- Clarifies anti-abuse rules
The final FTC regulations include:
- Reducing previously taxed E&P baskets to 10, from 16
- Gross tested income is tiered up for purposes of allocating interest expense
- Foreign tax redeterminations are addressed
- Foreign branch rules are detailed
Additionally, Section 987 regulations are deferred by another year.
EY’s Global Tax Alert details the latest developments.