US Tax Readiness: The dividend received deduction regulations
US Treasury and the IRS on June 14, 2019, released temporary regulations aimed at preserving the “structure of the statutory scheme” on taxation of foreign earnings, including Section 965 toll charge, subpart F, global intangible low-taxed income (GILTI), and Section 245A dividends received deduction (DRD), as enacted by the 2017 tax reform act.
Taxpayers should review the impact of the regulations for financial reporting purposes for the period ending on June 30, considering the dates the regulations were finalized and that the rules are already effective.
If considering the sale of foreign subsidiaries, taxpayers should evaluate whether the Temporary Regulations (specifically, the ER rules) have a tax impact on such deals.
