Keep your tax compliance function healthy and up to date
The 2017 tax law, commonly called the Tax Cuts and Jobs Act (or TCJA), made many far-reaching changes that have a significant impact on businesses in terms of data gathering, reporting requirements, and tax return filings. The tax law includes new compliance and reporting rules that affect companies with cross-border operations or that engage in financial transactions with foreign entities.
New reporting requirements and potential compliance issues fall into several categories, including:
Foreign-derived intangible income (FDII) deductions: Under the new FDII rules, a deduction (and therefore a reduction in tax) may be available when goods or services are provided to foreign customers. Non-obvious flows that qualify for FDII may exist and should be identified.
Global intangible low-taxed income (GILTI) calculations: The subpart F rules of prior law were expanded so that additional (GILTI) income must be included by certain U.S. shareholders of controlled foreign corporations. The U.S. tax liability on these amounts may be higher than expected due to the interaction of foreign tax credit rues and the allocation of expenses such as interest.
State and local tax (SALT): The tax reform law has varying impact upon SALT calculations and return filings (e.g., whether states follow the federal 100 percent bonus depreciation rules).