KPMG report: Accounting for income taxes considerations for foreign tax credits following Notice 2023-55
A KPMG report discusses accounting for income taxes considerations of Notice 2023-55 under U.S. generally accepted accounting principles.
Accounting for income taxes considerations for FTC following Notice 2023-55
The IRS recently issued a notice that allows an optional deferral of the effective date of the foreign tax credit final regulations published on January 4, 2022.
Background
On July 21, 2023, the IRS released an advance version of Notice 2023-55 [PDF 62 KB] announcing temporary relief for taxpayers determining whether a foreign tax is eligible for a foreign tax credit under sections 901 and 903. Read TaxNewsFlash
For foreign taxes paid during tax years 2022 and 2023, taxpayers may apply:
- Former section 1.901-2(a) and (b), before it was amended by Treasury Decision 9959 (the 2022 foreign tax credit final regulations), but subject to a modification to the non-confiscatory gross basis tax rule as described in the notice
- Existing section 1.903-1 without the attribution requirement
Read a July 2023 report [PDF 672 KB] prepared by KPMG LLP: What’s News in Tax: Accounting for Income Taxes Considerations for Foreign Tax Credits Following Notice 2023-55, which discusses accounting for income taxes considerations of the notice under U.S. generally accepted accounting principles (“US GAAP”).
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