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Daily Tax Report: International

Companies Selling IP Get Narrow Win in Export Tax Break Rules

July 13, 2020, 8:45 AM

Companies that produce goods or provide services overseas using certain U.S.-based intangible property can now more easily claim a tax perk aimed at drawing manufacturing operations back to the U.S.

Final IRS rules (T.D. 9901), released July 9, introduced a new rule that makes it easier for U.S.-based companies selling certain IP overseas to claim the 50% foreign-derived intangible income (FDII) deduction, under tax code Section 250.

The IRS said that certain types of IP transactions don’t have to undergo the typically onerous process for verifying that the final product is being used abroad. The guidance...

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