Tax readiness: A fresh look at stewardship expenses

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July 2019

Overview

The comprehensive federal tax reform legislation enacted in late 2017 (the Act) and subsequently issued guidance significantly affect the ability of taxpayers to claim foreign tax credits (FTCs). The ability to claim FTCs is closely tied to how certain expenses—including selling, general and administrative (SG&A) and stewardship—are allocated and apportioned among different categories of income. Similar rules may also affect foreign-derived intangible income (FDII) benefits.

On July 24, 2019, PwC hosted a webcast featuring specialists who discussed these issues. Download the Insight below to get the detail from those discussions.

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PwC's Chris Desmond highlights the key takeaways from July's Tax Readiness webcast

The takeaway

For most companies, calculation of stewardship expenses is an important consideration because of GILTI, FDII and the ability to claim FTCs in general. 

When determining the amount of stewardship expenses, interviews are inherently more accurate than surveys or apportionment. Overall, companies should take an integrated approach that identifies the appropriate amount of stewardship expenses and provides more accurate expense allocations for FTC and FDII purposes.

Finally, companies should be mindful of the interactivity of tax code provisions and of consistency in positions taken. 

Contact us

Michael Urse

Partner, International Tax Services, PwC US

Christopher Desmond

Partner, Value Chain Transformation Co-leader, PwC US

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