IRS Limits Foreign Tax Credits Companies Can Claim in Rules (3)

Final rules that limit how multinationals claim foreign tax credits will be challenging for companies that hoped the IRS would target the rule at abusive transactions.

The rules (T.D. 9895), released Friday, prevent companies from benefiting from extra write-offs following certain asset acquisitions that are eligible for tax benefits under U.S. law but not abroad. The rules are largely adopted from the temporary (T.D. 9800) and proposed (REG-129128-14) version of the rules, which have been in effect since December 2016.

U.S. companies acquiring foreign entities were previously able to structure mergers and acquisitions ...