The US Department of the Treasury has issued draft dual consolidated loss (DCL) regulations. The regulations would disallow the US tax use of foreign losses viewed as reducing tax liabilities under the OECD/G20 Pillar Two global minimum corporate tax rules for multinational enterprises (MNEs).
According to law firm A&O Shearman, the regulations would ‘greatly expand’ the application of the DCL rules for MNEs large enough to be subject to a qualified domestic minimum top-up tax or income inclusion rule.