FDII shades clearer: the final Section 250 regulations
Doug McHoney (PwC's US International Tax Services (ITS) Leader) and Ninee Dewar (a Partner in PwC's Washington National Tax Services (WNTS) ITS practice) discuss the recently-released Foreign Derived Intangible Income (FDII) final regulations under Section 250. Doug and Ninee discuss: the background of the Section 250 deduction and how the deduction interplays with both FDII and Global Intangible Low-Taxed Income (GILTI); how the final regulations compare to the March 2019 proposed regulations under Section 250, including various changes to the documentation rules and loss transactions; Ninee's advice for taxpayers to meet the substantiation requirement; the background of the 'ordering rule' and how the rule helps coordinate Sections 250, 163(j), and 172(a); the importance of remembering that the Section 250 deduction is a taxable-income deduction (particularly in light of recent changes to the Net Operating Loss rules); how the final regulations treat electronically-supplied services and advertising services; how the final regulations treat related-party sales; and various important effective dates and applicability dates for the final and proposed regulations.
FDII shades clearer: the final Section 250 regulations