U.S. companies anxiously awaiting guidance on how hard they'll be hit by a new foreign levy in the tax overhaul will have to stay tuned for at least another two months.
The Internal Revenue Service proposed regulations on Thursday spanning 157 pages that provide some details on which assets are subject to the tax on GILTI, or global intangible low-tax income, and how to calculate it. But one of the most pressing questions—to what extent multinational companies can use foreign tax credits (FTC) and business expenses to offset the levy—remained unanswered.
“It's a very big deal that the FTC and expense allocation issues have been left out,” said Andrew Silverman, a Bloomberg Intelligence analyst who focuses on tax policy. The regulations are “not a great answer for companies who are essentially left in limbo.”
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