IRS Details Meshing of Foreign Tax Credit, OECD Minimum Tax (3)

Certain kinds of foreign taxes imposed under the pending global minimum tax will generally be eligible for the US foreign tax credit—but much will depend on exactly what kinds of taxes and taxpayers are involved, according to the IRS.

The Internal Revenue Service and the Treasury Department issued long-awaited guidance (Notice 2023-80) on Monday on how the foreign tax credit and the new 15% global minimum tax will work together. The new tax, which is part of Pillar Two of the OECD’s 2021 global tax agreement, will be implemented by dozens of countries as soon as January.

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