IRS Issues Regs on Income Subject to a High Rate of Foreign Tax

 – July 20, 2020
IRS Issues Regs on Income Subject to a High Rate of Foreign Tax

The Department of the Treasury and the IRS today issued a final regulation addressing the treatment of income earned by certain foreign corporations that is subject to a high rate of foreign tax.

The final regulations allow taxpayers to exclude certain high-taxed income of a controlled foreign corporation from their Global Intangible Low Taxed Income (GILTI) computation on an elective basis.

Treasury and the IRS today also issued a proposed regulation regarding the high-tax exception with the GILTI high-tax exclusion. Treasury and the IRS welcome public comments.

Updates on the TCJA can be found on the Tax Reform page of IRS.gov.