Multinationals Face an Irrevocable Decision Under the New Section §163j Proposed Regulations

Since the 2017 tax act enacted the new §163(j) limitation on interest deductions, multinationals have been asking whether the limitation applies to controlled foreign corporations (CFCs).

1. Proposed regulations released November 26, 2018, would answer that question in the affirmative.

2. But other questions remain. The biggest decisions now for multinationals are

(i) whether to elect into early application of the proposed regulations, starting in 2018, and

(ii) whether to make the irrevocable election (CFC Group Election) to apply §163(j) to CFCs under modified rules: rules that are generally more favorable, but also far more complex.

Read the full Bloomberg Tax article to learn more.

Reproduced with permission from Copyright 2019 The Bureau of National Affairs, Inc. (800-372-1033)