In the News

Asking for a word on foreign tax credits

Bernie Becker, POLITICO

Washington, DC, May 2, 2022
FIRST LOOK: A bipartisan group of 10 House tax writers is urging the Treasury Department to be more open to business concerns about final foreign tax credit regulations released late last year.

The 10 lawmakers told Treasury Secretary Janet Yellen that they appreciated that foreign tax credits, in which companies can get a tax break for income taxes paid to other countries, are a particularly dense subject. But they added that they were concerned that the final FTC rules could lead to American businesses being double-taxed and discourage “investment by U.S. companies in emerging markets where we need to stay competitive with China.”

With that in mind, the tax writers asked Yellen to keep discussing the matter with the business community and “to be particularly mindful of how these changes could negatively impact U.S. companies’ competitiveness abroad” in a letter sent Friday and obtained by Pro Tax.

Businesses have already pointed out a range of potential problems with the final FTC regulations, saying they could make life particularly difficult for companies operating in countries with which the U.S. doesn’t have a tax treaty. In Friday’s letter, the bipartisan group of tax writers also asked for more comprehensive IRS guidance for applying the FTC rules and for Treasury to consider offering companies safe harbors in certain situations.

Reps. Brad Schneider (D-Ill.) and Kevin Hern (R-Okla.) led the letter to Yellen. Reps. Jodey Arrington (R-Texas), Ron Estes (R-Kan.), Drew Ferguson (R-Ga.), Ron Kind (D-Wis.), Stephanie Murphy (D-Fla.), Jimmy Panetta (D-Calif.) and Jackie Walorski (R-Ind.) also signed on, as did Del. Stacey Plaskett (D-U.S. Virgin Islands).