The Tax Cuts and Jobs Act (TCJA) included a new tax-savings opportunity relevant to internationally active companies: a deduction under Section 250 for foreign-derived intangible income, commonly referred to as FDII. The FDII deduction applies in general to U.S. C corporations with sales of tangible personal property, sales or licenses of intangible property, or sales of services to non-U.S. customers and/or customers located outside the United States.
The Treasury Department and IRS have issued the proposed regulations on FDII, which provide further clarity on how taxpayers determine and compute the FDII benefit. Taxpayers now have valuable insight into what types of documentation and internal processes may be required to substantiate the FDII benefit. An understanding of the proposed regulations and available planning opportunities are critical in preparing taxpayers to take advantage of the tax savings with the FDII deduction.
At the conclusion of this session, participants will be able to:
- Calculate the FDII deduction and determine what income qualifies.
- Apply new insights provided by recent regulations issued on FDII, including documentation requirements and related party rules.
- Understand planning opportunities to maximize tax savings from FDII.
Presenters:
- Kellie Becker, international tax partner
- Irina Rangelova, international tax manager
- Ben Cote, international tax senior manager
