Overview
Law360 quoted George Callas in a March 12 article titled "Difference Between Sales, Services Could Cause FDII Problems." The article discusses how US companies claiming a deduction on foreign-derived intangible income (FDII) need to untangle complex transactions to document sales and services under the proposed FDII regulations.
Callas notes that these types of transactions, which are "more complicated than just widget making," always vex policymakers trying to write administrable tax laws. "It sounds like a very facts-and-circumstances-based standard, which can lead to disagreements and controversy with the IRS," he says. "We'll have to see if there's a way to draw the line a little brighter without making it too blunt an instrument."
The full article can be read at Law360 (subscription required).