In December 2017, Congress enacted Section 250 as part of the 2017 Tax Cuts and Job Act, which includes the FDII rules. Under those rules, US corporations that (i) sell property to non-US persons for non-US use and/or (ii) perform services that benefit a service recipient’s foreign operations may be entitled to claim a deduction that reduces the corporate tax rate on applicable profits from 21% to 13.125%. The proposed regulations were finally released by the IRS on March 6, 2019.
The new export tax incentive reflected in the FDII regime is “platformed” on two previous tax incentives: (i) the FSC/DISC regime and (ii) Section 199. We have spent the past two decades working closely with the largest inbound and outbound corporate clients to optimize tax benefits under these incentives. We have reviewed the FDII regulations in great detail, including the opportunities associated with “FDII Services,” and are very well-positioned to optimize FDII benefits. Our approach to benefit optimization involves a clientspecific analysis of qualifying and non-qualifying activities, revenue and expenses, resulting in a data set that facilitates the FDII computation. We also leverage our expertise applying the Section 861 expense allocation and apportionment rules, bearing in mind that Section 861 may impact foreign tax credits, GILTI, and other aspects of our client’s overall tax position.
Simply put, with the release of the FDII regulations combined with ABGi’s extensive experience in maximizing DISC and section 199 incentives, ABGi is better positioned than any other tax consulting company to assist you with this new and incredibly beneficial tax incentive – especially now that Section 199 is gone going forward.
Our services range from strategic planning or one day tutorials to large-scale studies for multinational companies. We have strong collaborative relationships with our international colleagues. This allows us to act as a global preferred provider for our multinational clients interested in reducing their global effective tax rate through multi-jurisdictional tax incentives.
ABGi is an international consulting firm specializing in tax incentives for research and innovation, with a strong cohesive operational base encompassing Brazil, United States, United Kingdom, and France. Our multidisciplinary science, engineering, accounting, and tax teams are comprised of seasoned professionals, all of whom have many years of corporate experience (Big 4) and research tax credits advisory work. ABGi has, for more than 30 years, provided high value added consulting services to a wide range of clients, backed by practical industry specific experience. Our quest is to deliver the highest quality service based on a strong commitment to integrity and transparency.