The final foreign tax credit regulations (T.D. 9882) addressing sections 861, 904, 905, and 960 are, in most respects, similar to what was proposed last year (REG-105600-18). However, taxpayers could still be inclined — perhaps more so — to consider using first-tier branches to reduce or eliminate BEAT or convert lost excess GILTI credits to excess branch basket credits.
In “U.S. Foreign Branch Basket Regulations: Taxpayer Considerations,” published in the latest issue of Tax Notes International, Brian Abbey, GTM’s Managing Director of International Tax Services, examines the mechanics of the U.S. foreign branch regulations as applied to the separate category of income.