Skip to Main Content
 

David Rosenbloom Talks to Law360 on Proposed GILTI Regs' Anti-Abuse Rule Seen As Overly Broad

September 17, 2018, Law360

Proposed U.S. regulations for the global minimum tax on intangible income contain an anti-abuse provision that could allow the Internal Revenue Service to disregard the effects of certain offshore transactions even if there aren’t signs of tax avoidance, specialists say.

. . .

For example, the proposed regulations say that for the purposes of calculating deductions from a CFC’s income, the entity will be treated as if it were a domestic corporation. That’s not a particularly startling proposition, according to David Rosenbloom of Caplin & Drysdale, Chtd.

He noted that under the pre-TCJA regime for Subpart F, or non-deferred overseas income, the standard for deductibility at a CFC level was to treat it as if it were a domestic corporation.

“Since the statute is meant to parallel Subpart F, I would expect the same rule to apply,” he said.

Rosenbloom said he would have thought Treasury’s statement in the rules about deductions from CFC income would have determined the treatment of related provisions, including Internal Revenue Code Section 163(j) https://www.law360.com/images/lexis_advance/kb-icon-red.png, which limits the interest businesses can deduct annually. Yet the proposed regulations said Section 163(j) and other measures would be addressed in future guidance.

“If your principle is you follow what’s going on with the domestic corporation, I don’t see how you can reach a different result with respect to those new limitations on deductions for domestic corporations, but I guess we’ll see,” he said.

For the full article, please visit Law360’s website (subscription required).

Excerpt taken from the article “Proposed GILTI Regs' Anti-Abuse Rule Seen As Overly Broad” by Natalie Olivo for Law360.
 

________________________________________________

About Caplin & Drysdale
Having celebrated our 50th Anniversary in 2014, Caplin & Drysdale continues to be a leading provider of legal services to corporations, individuals, and nonprofits throughout the United States and around the world. We are also privileged to serve as legal advisors to accounting firms, financial institutions, law firms, and other professional services organizations.

The firm's reputation over the years has earned us the trust and respect of clients, industry peers, and government agencies. Moreover, clients rely on our broad knowledge of the law and our keen insights into their business concerns and personal interests. Our lawyers' strong tactical and problem-solving skills -- combined with substantial experience handling a variety of complex, high stakes, matters in a boutique environment -- make us one the nation's most distinctive law firms.

With offices in New York City and Washington, D.C., Caplin & Drysdale's core practice areas include:
For more information, please visit us at www.caplindrysdale.com.
Washington, DC Office:
One Thomas Circle NW
Suite 1100
Washington, DC 20005
202.862.5000
New York, NY Office:
600 Lexington Avenue
21st Floor
New York, NY 10022
212.379.6000

___________________________

Disclaimer
This communication does not provide legal advice, nor does it create an attorney-client relationship with you or any other reader. If you require legal guidance in any specific situation, you should engage a qualified lawyer for that purpose. Prior results do not guarantee a similar outcome.

Attorney Advertising
It is possible that under the laws, rules, or regulations of certain jurisdictions, this may be construed as an advertisement or solicitation.
© 2018 Caplin & Drysdale, Chartered
All Rights Reserved.

Related Professionals

Related Practice Area(s)