Regulations pending OIRA review, section 250 deductions for foreign-derived intangible income and GILTI

OMB’s Office of Information and Regulatory Affairs (OIRA) has acknowledged receipt of proposed regulations from the Treasury Department as guidance under section 250 concerning the deductions for “foreign-derived intangible income” (FDII) and “global intangible low-taxed income” (GILTI).

The regulations are described on the OIRA website as follows:

• RIN: 1545-BO55: Section 250 regulations 

Regulations providing guidance regarding the deductions for foreign derived intangible income and global intangible low-taxed income.

Treasury regulations that are identified as “major” regulations are subject to review by OMB’s OIRA before issuance, pursuant to Executive Order 13771.

Background

The new U.S. tax law (Pub. L. No. 115-97, date of enactment December 22, 2017) allows a U.S. corporation a deduction equal to 37.5% of its “foreign-derived intangible income” (FDII). The deduction for FDII is limited when the “global intangible low-taxed income” (GILTI) inclusion (including the section 78 gross-up for foreign taxes attributable to the GILTI inclusion) and the FDII exceed the corporation’s taxable income, determined without regard to the GILTI and FDII deductions.

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