29 March 2016 United States removes foreign tax credit restrictions for Cuba Earlier this month, the IRS released new guidance (Revenue Ruling 2016-8) removing certain punitive tax measures from US taxpayers doing business in Cuba. Among the changes, US taxpayers will be permitted to credit income taxes paid in Cuba against their US income tax liability as a foreign tax credit (assuming these taxes otherwise meet the requirements for being creditable). The new rules apply to Cuban income taxes paid or accrued with respect to income attributable to the period after December 21, 2015. Although the changes will primarily affect the tax liability of companies in the short-term (due to continued US restrictions placed on US citizens and permanent residents with regard to activities in Cuba), individuals may also benefit from the new guidance. A Tax Alert prepared by Ernst & Young's Human Capital group, and attached below, provides additional details. Document ID: 2016-0579 |
