What Do the Tax Cuts and Jobs Act, Foreign-Derived Intangible Income, and the World Trade Organization Have in Common?


Of the hundreds of provisions in the most recent Tax Cuts and Jobs Act, some are proudly touted by President Trump and others are hidden deep in the legislation, written in unintelligible legalese. The Foreign-Derived Intangible Income Deduction Provision is an example of the latter. Whether this is simply because it doesn’t make a great soundbite and takes up 33 characters or because it is likely WTO-inconsistent and an international trade violation, the provision is a relatively obscure, but high-impact, tax provision and warrants more discussion than it has received.