On November 18, 2022, the Treasury Department published Foreign Tax Credit guidance aimed to clarify royalty withholding tax and cost recovery areas.

The measures would give companies a way to make sure their foreign royalty withholding taxes can continue to qualify for the credit. The rule also would make clear that a country’s restrictions on whether taxpayers can recover their costs don’t necessarily prevent their taxes there from being eligible for the credit.

This complimentary OnPoint – a summary of ready-to-use presentation slides —explains the key proposals and what you need to know.

Topics include:

• Clarifications to the cost recovery requirement
• New cost recovery safe harbor
• Source-based attribution rule for royalties
• Foreign tax credit for foreign royalty withholding taxes

Download your copy to understand the impacts to your business.