IRS Finalizes Derivative Payment Rules for Base Erosion Tax (3)

The IRS on Wednesday finalized rules on how certain derivative payments are determined and reported under the US base erosion tax.

The regulations (TD 10041, RIN 1545-BR20) aren’t dissimilar from the proposed regulations released by the agency in January. They detail the treatment of “qualified derivative payments,” or QDPs, with respect to securities and lending transactions that are made from US companies to foreign-related entities.

Pat Brown, co-leader of PwC’s Washington National Tax Office, said that “not much has changed” between the proposed regulations and the final rules. The final regulations, however, provide clarity ...