Treasury Eases Minimum-Tax Burdens on U.S. Multinationals
By Kate Davidson and Richard Rubin
WASHINGTON -- U.S.-based multinationals will be less exposed to
certain U.S. taxes after the Treasury Department issued new rules
implementing two major pieces of the 2017 tax law.
The regulations, unveiled on Monday, will help ease the burden
of two separate minimum taxes that were designed to put a floor
under corporate tax collections.
Senior Treasury officials said rules largely finalize
regulations proposed late last year, while also addressing U.S.
multinational firms' concerns.
One minimum tax affected by the regulations is the Global
Intangible Low-Taxed Income Tax, or GILTI, which was projected to
raise $112 billion over a decade.
The rule includes a provision that would allow companies to
treat certain assets as 50% exempt for expense allocation purposes
under GILTI, a senior Treasury official said.
Treasury officials also proposed more generous rules for
calculating the foreign tax credit, including changes to the
allocation and apportionment of research and experimental tax
deductions. The Treasury official said the change will generally
allow those subject to the GILTI tax to increase their use of
foreign tax credits.
The second minimum tax is known as the Base Erosion and
Anti-Abuse Tax, or BEAT. Congress wrote the BEAT to make it harder
for companies to load up their U.S. operations with deductions and
push profits to related entities abroad.
Write to Kate Davidson at email@example.com and Richard
Rubin at firstname.lastname@example.org
(END) Dow Jones Newswires
December 02, 2019 17:22 ET (22:22 GMT)
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