A Cloudy Forecast for SaaS Companies Claiming Foreign Tax Credits

calendar iconAugust 9, 2022

On January 4, 2022, the Internal Revenue Service and the U.S. Treasury Department issued final regulations that provided significant guidance on the determination of whether a foreign tax is eligible for the foreign tax credit (“FTC”). These new regulations substantially modified prior regulations issued under Code Sec. 901-905.2, which precludes certain foreign withholding taxes and other taxes that have historically been considered creditable from being claimed as an FTC. The new regulations apply to foreign taxes paid in tax years beginning on or after December 28, 2021.

The recent International Tax Journal article, authored by Cherry Bekaert’s Michael Cornett and William Hooker, both Directors in the firm’s International Tax practice, looks at the latest on foreign tax credits and how they impact the technology industry as a whole and specifically SaaS companies.

For questions about claiming Foreign Tax Credits or other international tax matters, contact your Cherry Bekaert advisor or Mike Cornett or Will Hooker.

This article is reprinted with the publisher’s permission from the International Tax Journal a bimonthly journal published by WOLTERS KLUWER. Copying or distribution without the publisher’s permission is prohibited. To subscribe to the International Tax Journal or other WOLTERS KLUWER Journals please call 800-449-8114 or visit