New IRS Regulations of Cloud Transactions and Digital Content: Sourcing Rules, Lease vs. Services Tax Treatment
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Tax Law
- event Date
Tuesday, January 28, 2020
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.
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BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).
This CLE/CPE course will provide tax counsel and advisers a detailed analysis of the taxation of cloud transactions and digital content. The panel will discuss applicable IRS tax rules and recent regulations, sourcing of income rules and challenges, treatment of payment of services versus lease payments, treatment of fees for the right to use digital content, issues presented by the BEAT, GILTI and FDII rules, and other vital items impacting taxpayers engaging in cloud transactions and digital content.
Mr. Perryman is a senior manager in EY’s National Tax Department, based in San Francisco. He advises clients in many sectors on a range of corporate transactional matters including intellectual property alignment, transfer pricing, international restructurings, and mergers and acquisitions.
Ms. Tolbert is a Manager in EY’s National Tax ITS practice, based in San Francisco. She advises clients on international tax matters, including inbound and outbound planning, intellectual property alignment, global operating model restructuring, and intercompany transactions and arrangements. Ms. Tolbert’s work is primarily focused on the modern tax planning issues resulting from the rapidly changing global tax law landscape, particularly as it relates to intellectual property, digital disruption, and industry convergence.
On Aug. 9, 2019, the IRS released regulations addressing the classification of "cloud transactions" and "transactions involving digital content" under the source of income rules of the Internal Revenue Code. Tax professionals must understand critical issues regarding the tax treatment of cloud transactions and digital content to properly advise and implement planning techniques to minimize tax liability to taxpayers.
The IRS generally treats cloud transactions as payments for services as opposed to a lease of property. However, some transactions, such as digital downloads or content transfers, could be classified as a lease of property under some circumstances. Tax professionals must also grasp crucial factors in determining classification as services versus leases and the tax treatment of each category.
The regulations have significant implications on cross-border transactions, providing that the source of income from digital transactions as being the place where the download of the digital content occurred, potentially subjecting taxpayers to multijurisdictional tax obligations. Furthermore, taxpayers must also consider the impact of other federal tax provisions, such as the base erosion anti-abuse tax (BEAT) regime, the U.S. tax treatment under the "controlled foreign corporation" (CFC) regime, and the new foreign-derived intangible income (FDII) regime.
Listen as our panel discusses key provisions and challenges of the recent regulations on cloud transactions and digital content, IRS treatment of payment of services versus lease payments, unresolved issues stemming from BEAT, GILTI, and FDII rules, and other essential items impacting taxpayers engaging in cloud transactions and digital content.
- Recent IRS regulations and applicable tax rules
- Sourcing of income rules and challenges
- IRS treatment of payment of services, lease payments, and rights to use digital content
- Tax implications of BEAT, GILTI, and FDII rules in relation to cloud transactions and digital content
- Best practices for tax counsel and advisers to ensure tax compliance for cloud transactions and digital content
The panel will review these and other key issues:
- Recent IRS regulations covering the tax treatment of cloud transactions and transfers of digital content
- Lease vs. services treatment in cloud transactions
- Digital content transfers and the tax treatment of payments for the purchase of or the right to use software or other digital content
- Sourcing rules and pitfalls to avoid unnecessary tax liability
- Additional federal income tax implications; BEAT, treatment of CFCs, FDII
Learning Objectives
After completing this course, you will be able to:
- Recognize the impact of recent IRS regulations on the tax treatment of cloud transactions and transfers of digital content
- Understand IRS lease vs. services treatment in cloud transactions
- Identify critical issues in the tax treatment of payments for the purchase of or the right to use software or other digital content
- Recognize factors in the application of sourcing rules and pitfalls to avoid unnecessary tax liability
- Identify the tax implications of BEAT, GILTI, and FDII rules concerning cloud transactions and digital content
- Field of Study: Taxes
- Level of Knowledge: Intermediate
- Advance Preparation: None
- Teaching Method: Seminar/Lecture
- Delivery Method: Group-Internet (via computer)
- Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
- Prerequisite: Three years+ business or professional experience at mid-level within the organization, preparing complex tax forms and schedules. Specific knowledge and understanding of corporate and partnerships taxation, international taxation, deferred foreign-source income, earnings and profits, sales and use taxation; tax implications in the purchase and sale of assets.
Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.
Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).
