The new tax law has had some important changes relating to taxation of IP. Such changes include a new tax on certain global income earned by foreign subsidiaries and a new tax incentive for certain foreign-derived income earned by U.S. corporations. The law also reduced the corporate tax rate to 21 percent, compared with the previous top corporate tax rate of 35 percent. This generally makes the United States a more competitive location in which to operate and own IP than in the past.
U.S. taxation of intellectual property has become astoundingly more complex after the Tax Cuts and Jobs Act. The new rules are so complex that the IRS and Treasury are still figuring out the details of how they operate. Some important clarifying guidance has been issued recently, but more guidance and regulations are needed. The IRS has until June 2019 — 18 months after the act went into effect in December 22, 2017 — to issue regulations for them to be retroactive. This is a tight deadline considering the voluminous guidance that is needed.