The Resource Deduction for FDII

Deduction for FDII

Deduction for FDII
Deduction for FDII
The Tax Act added Code Sec. 250 which provides a lower tax rate for income derived from outside the United States by a domestic corporation. The amount of foreign income less a routine return on depreciable tangible property is described as foreign-derived intangible income (FDII) and is subject to an effective tax rate of 13.125% (rather than 21%). The lower tax rate is provided via a deduction of 37.5% of FDII. The U.S. tax on foreign source income that qualifies for the FDII deduction can be reduced with foreign tax credits. FDII provides an important benefit to domestic corporations that sell property to foreign customers, provide services to foreign customers, or license intangible property to foreign parties. The transactions can be with related foreign persons subject to certain limitations. Arrangements involving domestic intermediaries may need to be restructured to obtain FDII benefits
Citation source
In: International tax journal. - Riverwoods. - Vol. 44 (2018), no. 2 (March-April) ; p. 3-4, 52
Yoder, L.D
Geographic coverage
North America
Language note
  • FDII
  • intangibles
  • foreign source income
  • foreign tax credit
Deduction for FDII

Library Locations

    • IBFD Library AmsterdamBorrow it
      Rietlandpark 301, Amsterdam, 1019 DW, NL
      52.3736660 4.9336932
Processing Feedback ...