Sourcing sorcery: New inbound taxation regs

Doug McHoney (PwC's US International Tax Services Leader) and Nils Cousin (International Tax Director in PwC's Washington National Tax Services practice) discuss the intricacies of income sourcing and the recently proposed Section 863(b) and 865 regulations. Among other topics they discuss: the background on sourcing rules and why these rules are so important; the general statutory framework for sales of personal property under Section 865; background on how Section 863(b) affects both 'inbound' and 'outbound' taxation; how the 2017 tax act amended Section 863(b)'s allocation rules; how treaties affect sourcing determinations; how the proposed regulations affect both US-based and foreign-based multinationals; and, finally, how and why taxpayers may elect to rely on the proposed regulations.