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Daily Tax Report: International

IRS May Allow Audited Companies to Reduce Base Erosion Deductions

Jan. 14, 2020, 1:08 AM

Multinational companies being reviewed by the Internal Revenue Service may be able to reduce the amount of deductions they waive as they try not to get hit by a tax on their offshore payments, an agency official said.

Companies that meet a certain threshold of related-party payments offshore have to pay a base-erosion and profit shifting tax that was introduced in the 2017 tax law.

Under proposed rules for the base erosion and anti-abuse tax (REG-112607-19), released December 2019, companies can opt out of all or part of their tax deductions on their original returns, in an amended...

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