by Ariful | Oct 2, 2026 | USA Accounting
TITLE: Texas Marketplace Fee Tax: What Sellers Must Do Before the Rule Changes
Texas is preparing to remove marketplace and platform fees from its taxable data processing services rules. This could reduce compliance costs for sellers using Amazon, eBay, Etsy and other online platforms.
However, the Texas marketplace fee tax has not ended yet.
On 30 September 2026, Texas Comptroller Don Huffines signed an executive order directing his agency to amend Rule 3.330. The proposed amendment must still be filed with the Texas Secretary of State, published in the Texas Register and opened for a 30-day public comment period.
Until the amended rule is formally adopted and becomes effective, you must continue using the current tax treatment.
The Texas update could remove tax from marketplace fees
The proposed change targets platform fees paid by sellers for services such as:
- Marketplace referrals.
- Product listing and storage.
- Advertising.
- Fulfilment.
- Transaction processing.
- Analytics and related platform services.
These services can involve the computerised entry, retrieval, search, compilation, manipulation or storage of data. That is why Texas has treated some marketplace provider services as taxable data processing services under Rule 3.330.
The change would affect sellers using platforms such as Amazon, eBay and Etsy. It may also cover similar fees paid through marketplace channels connected to Shopify and other ecommerce systems.
The Texas Comptroller described the existing treatment as a hidden double tax. The customer may pay sales tax on the underlying goods, while the seller also pays tax on the platform fee connected with the same transaction.
Understand the current data processing services tax
The previous Comptroller amended Rule 3.330 with changes applying from 1 October 2025. Under that approach, marketplace provider services could fall within the definition of taxable data processing services where the platform stores listings, maintains transaction records or compiles seller analytics.
Texas provides a statutory 20% exemption for data processing services. As a result, tax has generally applied to 80% of the relevant marketplace fee, rather than the full fee.
For example, if an eligible platform fee is $1,000, the taxable base may be $800 before applying the applicable state and local tax rates.
Your exact treatment can depend on the fee type, platform contract, customer location, registration status and whether the platform or seller handles the tax calculation. Keep the supporting records for each conclusion.
Do not stop collecting or self-assessing tax early
The executive order starts a rulemaking process. It does not itself amend Rule 3.330.
The proposed amendment must pass several stages:
- The Texas Comptroller prepares the proposed rule text.
- The proposal is filed with the Texas Secretary of State.
- The proposal is published in the Texas Register.
- A 30-day public comment period begins.
- The agency reviews comments and may revise the proposal.
- The amended rule is formally adopted.
- The effective date is confirmed.
This means you should not stop collecting, self-assessing or remitting tax on marketplace fees simply because the executive order has been signed.
Do not amend prior returns. Do not reclaim tax. Do not change your accounting software rules based only on the announcement.
Wait for the final rule and its effective date.
Check whether your business is affected
This update matters if you operate through a Texas-registered entity or have Texas-related sales tax obligations and pay marketplace fees.
It may be relevant to:
- Amazon sellers with Texas customers.
- Amazon FBA foreign sellers using a US fulfilment structure.
- Sellers operating through a US LLC.
- eBay and Etsy merchants.
- Shopify merchants using marketplace channels.
- Digital businesses reselling services through platforms.
- International companies selling into the United States.
- Businesses using third-party fulfilment or platform advertising services.
The change may also matter to businesses that do not have a physical presence in Texas but have registration or economic nexus obligations there.
A marketplace facilitator may collect sales tax on the sale of goods. That does not automatically resolve your other tax responsibilities. Marketplace facilitator rules generally do not cover your federal income tax, Form 5472 filing obligations, or tax on platform fees.
Complete this Texas compliance checklist now
Use the current rules until the amended rule takes effect.
1. Keep your existing tax treatment unchanged
Continue applying your current process to marketplace fees. This helps you avoid underpayments, incorrect returns and possible interest or penalties.
If your platform charges tax on eligible fees, record that tax separately. If you self-assess use tax, continue doing so under your existing process.
2. Build a marketplace fee schedule
Pull a report covering fees paid from October 2025 onwards.
Include:
- Platform name.
- Fee category.
- Invoice date.
- Settlement period.
- Texas taxable amount.
- Tax charged or self-assessed.
- Return period reported.
- Supporting invoice or settlement report.
This gives you a clear audit trail if the final rule changes future treatment.
3. Preserve platform records
Keep platform fee invoices, settlement statements, advertising invoices, fulfilment reports and transaction records.
Do not rely only on a bank statement. Bank statements show payment but may not explain what service the platform provided or how the fee was calculated.
Good records will help you support the original treatment and identify any future adjustment opportunity if the final rule permits one.
4. Monitor the Texas Register
The 30-day comment period will begin after the proposed amendment is published. It does not necessarily begin on the date of the executive order.
Monitor the Texas Comptroller’s official news releases and the Texas Register.
Record:
- Publication date.
- Comment deadline.
- Proposed wording.
- Effective date.
- Any transition or retroactive provisions.
- Final adoption notice.
5. Do not reclaim tax based on the order alone
The executive order does not confirm that previously paid tax can be refunded. It also does not establish that the final amendment will apply retrospectively.
Wait for the final rule before considering amended returns, credits or refund claims.
Watch these other US changes from 1 October 2026
Texas is the main development, but international sellers should review several other US compliance items.
Washington, D.C.: verify the sales tax rate before changing systems
A planned increase in the general District of Columbia sales and use tax rate requires careful checking. The latest notice from the D.C. Office of Tax and Revenue states that the general rate remains 6% through 30 September 2027, with the 7% rate postpo
by Ariful | Oct 1, 2026 | Australia Updates
TITLE: Australia’s October 2026 Compliance Changes: Card Surcharges, ATO Payments, Tax Transparency and Foreign Resident CGT
Australia’s October Compliance Changes at a Glance
Australia enters October with several important compliance changes for ecommerce sellers, digital businesses, employers and international groups.
From today, card surcharges are no longer permitted across major card networks. The ATO will stop accepting credit card payments after 30 November. New foreign resident capital gains tax rules also begin, while the latest Corporate Tax Transparency Report shows stronger compliance among large businesses.
Use this checklist to understand what your Australian business needs to do next.
Remove card surcharges before they create payment disputes
From 1 October 2026, eftpos, Mastercard and Visa have introduced no-surcharge rules covering credit, debit and prepaid card payments. American Express and UnionPay have also removed surcharging, while PayPal’s rule begins on 5 October 2026.
The Reserve Bank of Australia estimates that Australians could save approximately $1.6 billion each year, largely through the removal of hidden payment surcharges.
The rules apply when a fee is added specifically because a customer chooses to pay by card. They do not automatically prohibit:
- Weekend surcharges.
- Public holiday surcharges.
- Booking fees.
- Service fees.
- Fees that apply regardless of the payment method.
However, your pricing must remain clear and accurate. The ACCC card surcharge guidance explains that the ACCC does not enforce card network rules. Enforcement of those network rules sits with the relevant card networks and payment service providers. The ACCC continues to enforce misleading pricing and excessive-surcharge rules for payment methods that remain covered by its guidance.
Complete this payment-system checklist today
- Remove card surcharge settings from physical terminals.
- Check online checkout settings in Shopify and WooCommerce.
- Review payment configurations connected to Amazon, eBay, TikTok Shop and Etsy.
- Confirm the change with your payment service provider.
- Update customer-facing price displays and checkout wording.
- Reconcile merchant fees as payment-processing expenses rather than separate card-surcharge income.
- Review your pricing model so card acceptance costs are reflected in overall prices where appropriate.
You do not necessarily have to absorb every cost. Businesses can reflect payment costs in their general pricing instead of adding a separate card fee. Some small businesses may also encourage cash, PayID or bank transfer payments, provided pricing remains transparent and customers are not misled.
The RBA’s official FAQ confirms that a card payment made on or after 1 October may not be surcharged, even if the invoice was issued earlier.
Prepare your cash flow before the ATO credit card cut-off
The ATO will stop accepting credit card payments after 30 November 2026.
The ATO says it is not appropriate for credit card merchant fees to be passed to the community. Only approximately 2.3% of tax payments were made by credit card during 2024–25, but more than 60% of those payments came from privately owned and wealthy groups, public companies and multinational businesses.
This change matters if your business uses a credit card to manage GST, BAS, income tax, PAYG withholding or payment-plan instalments.
Protect your payment plan
If you have a payment plan connected to a credit card or a direct debit arrangement linked to a credit card, update the payment method before the next instalment due after 30 November.
Review the ATO’s guidance on:
Build the replacement payment method into your cash-flow forecast now. This will help you avoid a failed instalment, payment-plan disruption or unnecessary contact with the ATO in December.
Taxpayers who need help can contact the ATO on 13 11 42 during business hours or speak with their registered tax professional.
Treat the Corporate Tax Transparency Report as a compliance signal
The ATO published its 2024–25 Corporate Tax Transparency Report today. It covers 4,299 corporate entities that paid a combined $87.5 billion in corporate income tax.
The entities included:
- 1,824 foreign-owned companies with income of $100 million or more.
- 593 Australian public entities with income of $100 million or more.
- 1,882 Australian-owned resident private companies with income of $100 million or more.
The proportion of large corporates reporting no income tax fell to 27%, representing 1,149 entities. This is the lowest proportion since Corporate Tax Transparency reporting began.
The report also records:
- $10.6 billion in corporate tax paid by the oil and gas segment.
- PRRT payable increasing from $1.48 billion to $1.87 billion.
- A record 21 PRRT payers.
- More than $36 billion in additional revenue secured by the Tax Avoidance Taskforce since 2016.
- 94.3% of large business tax paid voluntarily, increasing to 96.3% after compliance action.
The ATO is also scrutinising data-centre and AI-driven business models, including related-party arrangements and profit-shifting risks. Its position is that Australian data centres can be fundamental and valuable parts of a business, rather than merely low-value service providers.
For growing digital businesses in Sydney, Melbourne, Perth and Queensland, this reinforces the value of accurate intercompany records, service agreements, revenue reporting and transaction-level bookkeeping.
Read the ATO Corporate Tax Transparency Report 2024–25.
Review foreign resident CGT exposure from today
The strengthened foreign resident CGT regime applies from 1 October 2026.
The changes include:
- A new Commonwealth definition of real property covering land, rights and interests over land, assets fixed to land, and leases or licences over those assets.
- A principal asset test based on a 365-day testing period, replacing the previous point-in-time approach.
- A requirement for foreign vendors involved in disposals valued at $50 million or more to notify the ATO using a new form when providing a non-IARP declaration.
- A requirement for purchasers to consider whether they reasonably believe a vendor declaration is false.
- A temporary 50% CGT discount for eligible non-individual foreign residents disposing of certain renewable energy assets.
The measure does not apply retrospectively to disposals that had already settled before commencement.
This is relevant to non-resident owners and international groups with Australian trading structures, business assets or interests connected with Australi
by Ariful | Oct 1, 2026 | US Updates
TITLE: New IRS Relief for Israel-Affected Taxpayers: Federal Deadlines Extended to 30 September 2027
Understand the new 30 September 2027 deadline
The IRS has extended certain federal tax deadlines for taxpayers affected by terroristic action in Israel. Under Notice 2026-63, qualifying taxpayers may postpone eligible filing, payment and other time-sensitive acts until 30 September 2027.
This matters to US LLCs, corporations and international sellers with owners, finance teams, tax records or principal business operations connected to Israel, the West Bank or Gaza.
It does not automatically postpone every US, state or marketplace tax deadline. Use the checklist below to identify what may be covered.
On 30 September 2026, the IRS issued News Release IR-2026-116 and Notice 2026-63.
The Treasury Secretary determined, following the procedures in Rev. Proc. 2004-26 and consultation involving the State Department and Department of Justice, that terrorist activity throughout 2025 and 2026 against the State of Israel constitutes “terroristic action” under section 692(c)(2).
As a result, qualifying affected taxpayers can postpone certain acts that are due:
- On or after 30 September 2026; and
- Before 30 September 2027.
Those acts must generally be completed by 30 September 2027, unless further relief is issued.
Check whether your business is an affected taxpayer
The relief applies to five main categories under Treasury Regulation §301.7508A-1(d)(1):
- An individual whose principal residence is in Israel, the West Bank or Gaza.
- A business entity or sole proprietor whose principal place of business is in that covered area.
- An individual, business entity, sole proprietor, estate or trust whose tax return preparer or necessary tax records are located in the covered area.
- A spouse of an affected taxpayer, but only for a joint return of two married individuals.
- An individual visiting the covered area who was killed, injured or taken hostage because of the terroristic action.
The IRS automatically identifies taxpayers whose principal residence or principal place of business is in the covered area from previously filed returns.
However, the IRS may not identify an international business that qualifies because its preparer or records are in Israel. If your filing address is outside the covered area, call the IRS disaster hotline at (866) 562-5227. International callers can use (267) 941-1000.
Tell the IRS when you qualified for relief. Keep evidence supporting the location of your preparer, records or other connection.
Review Form 5472 exposure before relying on the relief
This update is especially relevant to foreign-owned US LLCs and corporations.
A foreign-owned single-member LLC that is treated as disregarded for US federal income tax purposes may still need to file Form 5472 with a pro forma Form 1120. The filing reports certain transactions between the US entity and its foreign owner or other related parties.
Failure to file correctly can create Form 5472 penalties of $25,000 per form, with $25,000 per year reporting failures representing a significant compliance exposure.
Do not assume that the deadline has moved simply because an owner or team member is located in Israel. Confirm that the entity meets one of the affected-taxpayer categories and that the specific act is covered.
Review these items immediately:
- The entity’s legal classification.
- The owner’s residence and business location.
- The company’s principal place of business.
- The location of accounting records.
- The location of the tax return preparer.
- The original due date for Form 5472 and the pro forma Form 1120.
- Evidence showing when the taxpayer became eligible.
This process helps you avoid treating relief as an automatic exemption from filing requirements.
Apply the rule to a US LLC or corporation
Consider a US LLC with an Israeli-resident owner whose principal place of business is Israel.
The entity may be an affected taxpayer. If it qualifies, a filing normally due on 15 April 2027 may move to 30 September 2027. For a calendar-year corporation with a return normally due on 15 March 2027, the same postponed deadline may apply.
The exact result depends on the entity’s classification, filing requirement and eligibility under Notice 2026-63. Confirm the position before delaying the filing.
The relief may also apply to qualifying:
- Income tax returns.
- Employment tax returns.
- Excise tax returns, except firearms tax.
- Estate and gift tax returns.
- Tax instalment payments.
- Claims for credit or refund.
- Tax Court petitions.
- Qualified retirement plan contributions.
- Other time-sensitive acts covered by the applicable regulations and revenue procedures.
The list is not exhaustive. Read the notice and match each deadline to the relevant act.
Check whether your records or preparer are in Israel
A UK or EU Amazon FBA seller may qualify even when the company itself is not based in Israel.
For example, a UK or EU seller may have its bookkeeping team and source records in Israel. This can potentially bring the business within the category covering taxpayers whose preparer or necessary records are located in the covered area.
Because the company’s filing address may be outside Israel, the IRS may not identify it automatically. The business should call the IRS hotline and request to be flagged.
Keep an organised evidence file containing:
- The preparer’s engagement details.
- The address where bookkeeping work was performed.
- The location of source records.
- Bank, marketplace and inventory records needed for the filing.
- The date the disruption or qualifying connection began.
- Copies of correspondence with the IRS.
This documentation supports the claim and gives your compliance team a clear audit trail.
Separate federal relief from state sales tax
Do not confuse federal relief with state-level sales tax obligations.
Suppose you operate with:
- A warehouse in Delaware.
- Inventory in California.
- Sales tax nexus in Texas and New York.
- A finance manager in Tel Aviv.
The manager’s location may be relevant to a federal filing if the taxpayer meets the rules. However, only covered acts of the affected taxpayer are postponed.
State sales tax returns remain subject to the applicable state deadlines. Marketplace-facilitated sales tax reporting filed with state agencies is not a federal act under Notice 2026-63. The notice does not automatically postpone those returns, payments or registrations.
Continue checking requirements in California, Texas, New York and any other state where you have inventory, employees, economic nexus or marketplace obligations.
The same principle applies to import compliance. US importers of record must continue monitoring customs entries, duties, broker documentation and other obligations that are outside the federal tax acts postponed by this notice.
by Ariful | Sep 30, 2026 | EU VAT Updates
TITLE: Netherlands Confirms ViDA E-Invoicing Rollout as EU Handling Fee Nears
Deadlines and changes to track
- 18 September 2026: CBP began enforcing importer-of-record accuracy on Form 5106. Incorrect information can result in an IOR number being voided.
- 20 September 2026: The new Union Customs Code entered into force.
- 1 October 2026: UK Vaping Products Duty begins at £2.20 per 10ml. Vaping duty stamp requirements also begin.
- October 2026: Belgium’s BE SAF-T submission channel is expected to open through MyMinfin.
- 28 October 2026: UK Autumn Budget.
- By November 2026: The EU’s €2 Union handling fee per item is expected to apply to qualifying distance-sale imports.
- 30 December 2026: EU Member States must transpose the first phase of ViDA measures.
- 1 January 2027: First-phase ViDA measures apply, including changes affecting OSS and IOSS users.
- 1 April 2027: All UK vaping products outside duty suspension must carry a valid duty stamp.
- April 2027: HMRC VAT Assist pre-submission checks are expected through compatible Making Tax Digital software. VAT late-payment penalty percentage rates are also expected to increase.
- 21 September 2027: The importer-for-distance-sales concept applies generally under the new Union Customs Code.
- 1 July 2028: Core Single VAT Registration reforms begin. The EU Customs Data Hub becomes mandatory for e-commerce consignments.
- 1 July 2030: The Netherlands plans mandatory domestic and intra-EU B2B e-invoicing and digital reporting of intra-EU transactions.
Digital VAT implementation is becoming an operational project, not a future policy issue. This week, the Netherlands confirmed a broad e-invoicing and digital reporting rollout under ViDA. The EU also moved closer to introducing its new handling fee for imported e-commerce goods.
In the UK, businesses are preparing for the Autumn Budget and the launch of Vaping Products Duty. In the USA, CBP has started enforcing importer-of-record data accuracy more aggressively.
The message is clear: your accounting data, invoice data and customs records must be accurate before new systems go live.
1. Netherlands ViDA rollout goes beyond the EU minimum
The Netherlands has confirmed an ambitious approach to ViDA implementation.
In a policy letter published on 11 September 2026, the Dutch State Secretary for Finance confirmed plans for mandatory structured e-invoicing covering:
- Domestic B2B transactions.
- Intra-EU B2B transactions.
- Digital reporting of intra-EU supplies.
- Digital reporting of intra-Community acquisitions.
These measures are planned from 1 July 2030. Digital reporting of domestic B2B transactions is planned to follow from 1 July 2031.
Invoices will generally need to be issued within 10 days of the supply. The retention period will increase to 10 years. The Netherlands also intends to use only the European EN 16931 standard, without introducing an additional Dutch standard.
There will be no separate exemption for small businesses under the current proposal. The infrastructure decision between Peppol and the European Business Wallet remains open.
The practical step is to assess your systems now. Review whether your ERP, accounting software and invoicing tools can create, receive, validate and retain EN 16931 structured invoices. Check your procurement, accounts payable and accounts receivable workflows too.
Do not wait for the final Dutch legislation. A late system change can delay invoices, disrupt VAT records and create reconciliation problems.
2. ViDA transposition creates a near-term data deadline
The European Commission describes ViDA as a progressive reform package covering OSS, IOSS, platform rules, Single VAT Registration and digital reporting. The first phase must be transposed by 30 December 2026, with measures applying from 1 January 2027.
The first phase includes changes involving:
- Expanded OSS arrangements.
- Deemed-supplier rules.
- VAT groups.
- The €10,000 threshold.
- Improvements to OSS and IOSS controls and corrections.
Core Single VAT Registration reforms follow from 1 July 2028. Digital Reporting Requirements for cross-border B2B transactions follow from 1 July 2030.
The EU’s OSS and IOSS schemes have reportedly collected more than €125 billion since July 2021, with more than 193,000 businesses registered. This scale explains why transaction-level data quality is becoming increasingly important.
The revised EN 16931 standard expands the structured VAT information available in invoices. Your ERP mappings, VAT codes and validation rules may need updating. Belgium has already tabled its initial ViDA transposition bill covering OSS, platforms and call-off stock. It has also postponed the temporary own-goods rule for cross-border inventory movements to July 2028.
Treat ViDA as a data-readiness project. Test tax code mapping, rejected invoices, corrected invoices and invoice-to-VAT-return reconciliation before the legal deadlines arrive.
3. E-invoicing is spreading across Europe and beyond
The Netherlands is not an isolated development. Several jurisdictions are moving towards structured e-invoicing and real-time or near-real-time reporting.
Current developments include:
- Slovakia: domestic structured e-invoicing from January 2027 through certified Peppol providers using EN 16931 XML.
- San Marino: domestic B2B e-invoicing from January 2027, with voluntary use during October to December 2026.
- Germany: B2B e-invoicing requirements from 1 January 2027 for issuers with prior-year turnover above €800,000.
- Denmark: implementation activity shifted to March 2027, with a unified Peppol format planned by 2029.
- Norway: a mandatory B2B e-invoicing framework begins in 2027, with full digital accounting planned by 2030.
- Poland: KSeF penalties are being deferred to the end of 2027, alongside further clarification of KSeF IDs in payment references.
- Bulgaria: a proposed 2028 domestic e-invoicing and real-time reporting reform.
- Croatia: testing of its free MIKROeRAČUN tool from October 2026.
- UAE: preparation for structured e-invoices to replace PDF-only processes in 2027.
- Philippines: BIR e-invoicing deadline confirmed as December 2026.
Your implementation plan should cover the whole transaction chain. Map tax codes, validate invoice formats, monitor rejections, manage corrections and reconcile invoices to VAT returns.
4. EU handling fee makes customs data more important
The new Union Customs Code under Regulation (EU) 2026/2108 entered into force on 20 September 2026. It establishes the EU Customs Authority and the EU Customs Data Hub.
A delegated act sets the Union handling fee at €2 per item, expected to apply from November 2026. This is in addition to the temporary €3 customs duty on qualifying low-value consignments, which has applied since 1 July 2026.
Keep these amounts separate in your systems:
- The €2 Union handling fee.
- The €3 customs duty, where applicable.
- Import VAT.
The Customs Data Hub becomes mandatory for e-commerce consignments from 1 July 2028 and extends to other trade by 2
by Ariful | Sep 30, 2026 | US Updates
TITLE: IRS 2026–2027 Priority Guidance Plan: What It Means for International Sellers
IRS Releases 2026–2027 Priority Guidance Plan
The Treasury Department and IRS have released the 2026–2027 Priority Guidance Plan, highlighting controlled foreign corporation reporting, foreign tax allocation, currency rules, withholding and digital assets.
For international sellers, this is an important compliance signal. The plan does not create a new filing deadline today. However, it shows where future IRS guidance may affect your existing records, calculations and returns.
This follows earlier September 2026 updates on Form 5472 penalty relief and the 1 October state sales tax changes. This article focuses on the new international reporting priorities without repeating those updates.
Understand what the new plan changes
The IRS Priority Guidance Plan contains 121 guidance projects. It sets priorities for Treasury and IRS resources. It does not guarantee that every project will be completed, and it does not set a deadline for completing any project.
From this plan year, the 12-month cycle aligns with the federal fiscal year:
- Starts: 1 October 2026
- Ends: 30 September 2027
- Current plan released: 29 September 2026
Treasury and the IRS expect to update the plan during the year. They have also indicated that further deregulatory items may be added.
The stated focus areas include:
- Continued implementation of the One, Big, Beautiful Bill Act
- Deregulation and burden reduction
- Tax-exempt organisations
- Tribal tax issues
- Digital assets
- Other tax administration priorities
For international sellers, the practical message is clear: maintain complete records now. Future guidance may change how existing income, foreign taxes, currency movements and digital asset transactions are calculated or reported.
Track the CFC and foreign tax projects closely
Several projects directly affect groups with foreign subsidiaries, CFC interests, foreign branches or cross-border inventory activity.
Review Subpart F and tested income calculations
The plan includes final regulations under sections 951 and 951A, together with related provisions covering a US shareholder’s pro rata share of:
- Subpart F income
- Net CFC tested income
- Stock-basis adjustments
- Section 1248 calculations where a shareholder sells a CFC interest during the year
Notice 2025-75 was published on 22 December 2025. Proposed regulations were published on 26 August 2026, with comments due by 26 October 2026.
An IRS official has indicated that the government does not intend to adopt a transaction-specific, holding-period approach. The expected clarification of stock basis and section 1248 calculations could still affect year-end work for groups buying, selling or restructuring foreign subsidiaries.
Action: Keep ownership charts, acquisition records, stock basis schedules, earnings and profits calculations and Subpart F workings together. This will reduce the risk of rebuilding historic data when final regulations are issued.
Prepare for changes to foreign tax allocation
The plan also includes final regulations under section 898(c) concerning taxable years of specified foreign corporations and the allocation of foreign taxes following repeal of the section 898(c)(2) one-month deferral election.
Relevant notices were issued in December 2025, and proposed regulations were published on 3 August 2026.
Further projects under sections 250 and 904 address the allocation and apportionment of expenses. Proposed regulations were published on 11 September 2026, with comments due by 10 November 2026.
The IRS also plans guidance under section 904 covering the source of certain income from inventory produced in the United States and sold outside the United States through a foreign branch.
Action: Reconcile foreign tax accruals, expense allocations, inventory movements and branch-level income monthly. Clear records will help you support foreign tax credit calculations and sourcing positions.
Do not overlook currency and investment rules
The plan includes further regulations under section 987, covering currency gain or loss relating to qualified business units. Notice 2026-17 was published on 16 March 2026, and additional proposed regulations followed on 14 August 2026.
Other listed projects include:
- Final regulations under section 897(h) for domestically controlled qualified investment entities
- Regulations under sections 1297 and 1298 concerning passive foreign investment companies
- Further regulations and guidance under section 871(m) concerning dividend equivalents
These areas may be particularly relevant where a group uses foreign branches, holds investments through multiple jurisdictions or receives US-source investment income.
Apply the section 871(m) relief correctly
Notice 2026-61, issued on 21 September 2026, extended existing section 871(m) transition relief by two years.
The notice postpones the application of certain rules to non-delta-one transactions issued before 1 January 2029. The IRS will continue to consider good-faith compliance efforts when enforcing the rules for:
- Delta-one transactions through 2028
- Covered non-delta-one transactions in 2029
The notice also extends through 2028:
- The simplified standard for identifying combined transactions
- Certain relief for qualified derivatives dealers
- The deferral of the net delta exposure calculation requirement
- Relief from certain QDD review and reporting obligations
Withholding agents may continue applying qualified securities lender transition rules for payments made in 2027 and 2028.
The anti-abuse rule remains applicable throughout the extended transition period. Taxpayers and withholding agents may rely on the notice while regulatory amendments are pending.
Action: If you receive US-source dividend equivalents or operate as a withholding agent, update your 2027 and 2028 procedures. Do not treat transition relief as a permanent exemption. Maintain transaction classifications, withholding statements and documentation supporting good-faith compliance.
Keep crypto records ready for the next phase
Digital assets are a specific focus of the new plan. The listed projects include:
- Guidance on transactions involving digital assets, including wrapping
- Electronic furnishing of information returns
- Section 6045 rules for electronic payee statements relating to digital asset sales
- Information reporting under amendments introduced by the Infrastructure Investment and Jobs Act
- Section 6045 regulations for US brokers reporting certain digital asset transactions of foreign persons under the OECD Crypto-Asset Reporting Framework
The CARF project remains proposed guidance, not final law. The United States has signalled an intention to move towards the first exchanges of crypto information by 2029. CARF reporting is not already in force.
Existing broker reporting is already developing. Form 1099-DA provides gross proceeds reporting for transactions on or after 1 January 2025, with basis reporting phased in during 2026.
Action: Reconcile the following records every month:
