Companies Lose Tax Deduction in Broad Proposed IRS Regulations

Multinational companies subject to the global minimum tax won’t have the ability to deduct up to hundreds of millions of dollars in losses if the US Treasury finalizes regulations it proposed Tuesday.

Tax practitioners hoped Treasury would make a whole or partial exception for losses used in global minimum tax calculations. But instead, they found the proposed regulations to be too broad and to characterize the minimum tax in a way they say unnecessarily restricts companies’ abilities to elect deductions in the United States.

The proposed regulations dictate how existing US rules meant to limit multinational companies’ ability to ...