This is the first course in a two-part series that covers the principal 2017 Tax Cuts and Jobs Act changes affecting US-based businesses operating internationally.  The 2017 Act drastically changed the tax rules applicable to US companies operating offshore. Those changes include the implementation of new regimes including the new “territorial” system, GILTI (global intangible low-taxed income), FDII (foreign-derived intangible income), elimination of the indirect deemed paid foreign tax credit, “anti-hybrid” limitations, and the BEAT (base erosion anti-abuse tax).  Existing regimes, such as the subpart F controlled foreign corporation rules and the PFIC passive foreign investment company) provisions, were largely left intact.

There are numerous ambiguities in the 2017 Act, and the new provisions often don’t mesh well with each other and with the pre-2017 Act provisions.  IRS and Treasury have been working to address outstanding issues through regulations and other guidance, but legislative action will be necessary to address many of the outstanding problems.  Thus, US-based international businesses and their management and finance organizations face an uncertain climate that is likely to persist for several years.

This course focuses on the conditions that led to enactment of the 2017 Act through a historical framework, with particular regard to the tensions inherent in cross border tax systems.  That framework can be helpful in anticipating how current uncertainties are likely to be addressed, and what future changes might be implemented by the United States and other taxing jurisdictions.  It explores the concerns that led to the 2017 Act, and legislative objectives that the Act was intended to address. It then analyzes systemic changes made by the Act, including modifications to the foreign tax credit system and introduction of the participation exemption dividends received deduction.  Its companion course analyzes new regimes instituted by the 2017 Act, including GILTI, FDII, the Beat, the expanded business interest deduction limitation of Section 163(j), the Section 267A anti-hybrid rules, and the transition tax on previously deferred earnings and profits.

While tax professionals will find the technical aspects of these courses helpful in navigating the new 2017 tax act rules, these courses are sufficiently broad to be useful to other finance and accounting executives and managers that have responsibility for or are otherwise interested in tax.

Course Key Concepts: Tax, International Tax, Tax Cuts and Jobs Act, GILTI, FDII, BEAT, Foreign Tax Credit, Anti-hybrid, Business Interest, Subpart F, Controlled Foreign Corporation