Deduction for Foreign-Derived Intangible Income and Global Intangible Low-Taxed Income; Correcting Amendment
| Citation | 85 FR 60909 |
| Record Number | 2020-19333 |
| Published date | 29 September 2020 |
| Section | Rules and Regulations |
| Court | Internal Revenue Service |
Federal Register, Volume 85 Issue 189 (Tuesday, September 29, 2020)
[Federal Register Volume 85, Number 189 (Tuesday, September 29, 2020)]
[Rules and Regulations]
[Pages 60909-60910]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-19333]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9901]
RIN 1545-BO55
Deduction for Foreign-Derived Intangible Income and Global
Intangible Low-Taxed Income; Correcting Amendment
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Correcting amendments.
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[[Page 60910]]
SUMMARY: This document contains corrections to Treasury Decision 9901,
which was published in the Federal Register on Wednesday, July 15,
2020. The Treasury Decision provided guidance regarding the deduction
for foreign derived intangible income (FDII) and global intangible low-
taxed income (GILTI).
DATES: These corrections are effective on September 29, 2020.
Applicability Date: For date of applicability, see Sec. 1.250-
1(b).
FOR FURTHER INFORMATION CONTACT: Brad McCormack at (202) 317-6911 and
Lorraine Rodriguez at (202) 317-6726; (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The final regulations (TD 9901) that are the subject of this
correction are issued under section 250 of the Internal Revenue Code.
Need for Correction
As published July 15, 2020 (85 FR 43042), the final regulations (TD
9901) contain errors that need to be corrected.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Correction of Publication
Accordingly, 26 CFR part 1 is corrected by making the following
correcting amendments:
PART 1--INCOME TAXES
0
Paragraph 1. The authority citation for part 1 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
0
Par. 2. Section 1.250-0 is amended by revising the entry for Sec.
1.250(b)-6 (d)(3)(ii) to read as follows:
Sec. 1.250-0 Table of contents.
* * * * *
Sec. 1.250(b)-6 Related party transactions.
* * * * *
(d) * * *
(3) * * *
(ii) Rules for allocating the benefits provided by and price paid
to the renderer of a related party service.
* * * * *
0
Par. 3. Section 1.250(b)-2 is amended by revising the second sentence
of paragraph (d)(4)(ii)(C) to read as follows:
Sec. 1.250(b)-2 Qualified business asset investment (QBAI).
* * * * *
(d) * * *
(4) * * *
(ii) * * *
(C) * * * Therefore, under paragraph (d)(3) of this section, DC's
dual use ratio with respect to the machine for the taxable year is 80
percent, which is DC's depreciation with respect to the machine that is
capitalized to inventory of Product A, the gross income or loss from
the sale of which is taken into account in determining DC's DEI for the
taxable year ($320x), divided by DC's depreciation with respect to the
machine that is capitalized to inventory, the gross income or loss from
the sale of which is taken into account in determining DC's income for
Year 1 ($400x). * * *
* * * * *
0
Par. 4. Section 1.250(b)-4 is amended by revising the paragraph heading
for paragraph(d)(2)(iv)(B)(13) to read as follows:
Sec. 1.250(b)-4 Foreign-derived deduction eligible income (FDDEI)
sales.
* * * * *
(d) * * *
(2) * * *
(iv) * * *
(B) * * *
(13) Example 13: License of intangible property used in research
and development of other intangible property--* * *
* * * * *
0
Par. 5. Section 1.250(b)-5 is amended by revising the second sentence
of paragraph (e)(2)(iii) to read as follows:
Sec. 1.250(b)-5 Foreign-derived deduction eligible income (FDDEI)
services.
* * * * *
(e) * * *
(2) * * *
(iii) * * * If it cannot be determined whether the location is
within or outside the United States (such as where the location of
access cannot be reliably determined using the location of the IP
address of the device used to receive the service), and the gross
receipts from all services with respect to the business recipient are
in the aggregate less than $50,000 for the renderer's taxable year, the
operations of the business recipient that benefit from the service
provided by the renderer are deemed to be located at the recipient's
billing address; otherwise, the operations of the business recipient
that benefit are deemed to be located in the United States. * * *
* * * * *
0
Par. 6. Section 1.250(b)-6 is amended by:
0
1. Revising the second sentence of paragraph (d)(4)(ii)(B)(2)(i).
0
2. Revising the third sentence of paragraph (d)(4)(ii)(C)(2)(i).
The revisions read as follows:
Sec. 1.250(b)-6 Related party transactions.
* * * * *
(d) * * *
(4) * * *
(ii) * * *
(B) * * *
(2) * * *
(i) * * * However, because 90 percent of R's operations that will
benefit from FC's service are located outside the United States under
paragraph (d)(3)(i) of this section, only 10 percent of the benefits of
FC's service are conferred on persons located within the United States.
* * *
* * * * *
(C) * * *
(2) * * *
(i) * * * Accordingly, because 10 percent of R's operations that
will benefit from FC's services are located within the United States,
persons located within the United States are treated as paying $10x
($100x x 0.10) for FC's services for purposes of applying the test in
paragraph (d)(2)(ii) of this section.
* * * * *
Sec. 1.1502-12 [Corrected]
0
Par. 7. On page 43112, in the third column, amendatory instruction 18
under Sec. 1.1502-12, is corrected to read as ``Redesignating newly
designated paragraphs (c)(7)(ii)(Q)(a) through (c) as paragraphs
(c)(7)(ii)(Q)(1) through (3)''.
Crystal Pemberton,
Senior Federal Register Liaison, Publications and Regulations Branch,
Legal Processing Division, Associate Chief Counsel, (Procedure and
Administration).
[FR Doc. 2020-19333 Filed 9-28-20; 8:45 am]
BILLING CODE 4830-01-P
