Foreign Taxpayers and the CARES Act: NOL Carrybacks, PPP Loans, Permanent Establishment, FTCs

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A


Conducted on Tuesday, June 2, 2020

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will address the benefits available for foreign taxpayers under the CARES Act and the caveats of implementing this relief. Our international tax experts will explain the unique considerations of applying this relief to foreign individual and business taxpayers.

Description

The CARES Act provides significant relief to both domestic and foreign taxpayers. The COVID-19 virus and the aid provided has many unanticipated consequences for multinational taxpayers.

The virus left taxpayers stranded in countries other than their tax home. Taxpayers stranded here or abroad may unavoidably meet residency tests in the countries they were visiting. The risk of inadvertently establishing a permanent establishment is another consequence. This could result if a taxpayer uses physical space to generate significant income in a country other than the primary tax home.

NOL relief, including the suspension of the 80% limitation, and the allowance of a five-year carryback, was welcomed by all taxpayers. NOL carrybacks where taxpayers elected under 965(h) to make their repatriation payments in eight installments are trickier. Taxpayers cannot use carrybacks to offset their transition tax liability. Even more perplexing could be the interaction of these carrybacks with foreign tax credits, Section 250 deductions, and BEAT. Understanding the caveats of this NOL relief is critical for tax professionals advising foreign taxpayers.

Listen as our panel of international experts details the provisions of current economic relief and its effect on foreign taxpayers. Our panel will discuss NOL carryback relief, permanent establishment, foreign owners of U.S. entities and loan relief, and unexpected outcomes and considerations of the CARES Act for global taxpayers.

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Outline

  1. Relief applicable to foreign and domestic taxpayers
  2. Deadline relief
  3. Foreign entities and loan relief
  4. NOL carrybacks
  5. 163(j) interest limitation changes
  6. Residency tests
  7. Permanent establishment
  8. Other issues for foreign taxpayers

Benefits

The panel will review these and other critical considerations:

  • How do specific countries determine residency?
  • Which taxpayers might be affected by permanent establishment (PE) rules?
  • What relief, if any, is anticipated for residency and PE status?
  • When it may be best to forego an NOL carryback
  • What caveats are there for carrybacks of NOLs with foreign tax credits?
  • How does 163(j) relief impact foreign taxpayers?

Faculty

Dawley, Kyle
Kyle Dawley, J.D., CPA

Principal, Global Tax Services
CliftonLarsonAllen

Mr. Dawley has spent a vast majority of his career focusing on the international tax needs of multinational businesses...  |  Read More

McCormick, Patrick
Patrick J. McCormick, J.D., LL.M.

Partner
Culhane Meadows Haughian & Walsh

Mr. McCormick specializes in the areas of international taxation, tax compliance, and offshore reporting...  |  Read More

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