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‘A Mess': Companies Scramble to Sort Out Foreign Tax Credit Regs

April 18, 2022, 8:45 AM

Companies have been complaining about new foreign tax credit rules ever since the Treasury Department issued them in December. Now the complaints are about to start hitting home.

The rules narrow the kinds of foreign taxes that companies can credit against their U.S. tax bills. As a result, tax practitioners and corporate advocates say, companies are struggling with determining which foreign taxes are and aren’t eligible for the credit. Some taxes that have long qualified, like foreign withholding taxes, may no longer be eligible.

Moreover, Treasury put the complex new rules into effect quickly, forcing companies to scramble ...