Thursday, July 9, 2020

IRS Issues Final Regulations on Deduction for FDII and GILTI.

On July 9, 2020 the Internal Revenue Service announced in IR-2020-147 that it issued final regulations that provide guidance on deductions for foreign-derived intangible income (FDII) and global intangible low-taxed income allowed to domestic corporations under the Internal Revenue Code.

These final regulations provide guidance on both the computation of the deductions available and the determination of FDII.

In addition, the guidance provides rules for the computation of FDII in the consolidated return context.

The guidance published today also finalizes the reporting rules requiring the filing of Form 8993, Section 250 Deduction for Foreign-Derived Intangible Income and Global Intangible Low-Taxed Income.

  • This document contains final regulations that provide guidance regarding the deduction for foreign-derived intangible income (FDII) and global intangible lowtaxed income (GILTI). 
  • This document also contains final regulations coordinating the deduction for FDII and GILTI with other provisions in the Internal Revenue Code. 
  • These regulations generally affect domestic corporations and individuals who elect to be subject to tax at corporate rates for purposes of inclusions under subpart F and GILTI.
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