The Tax Cuts and Jobs Act of 2017 modified the foreign tax credit rules. These rules allow US taxpayers to offset their taxes by the amount of foreign income taxes paid or accrued, in several important ways, some of which affect international and domestic businesses, such as deductions, depreciation, expensing, tax credits and other tax items.
For example, TCJA amends § 965—which previously allowed foreign income earned by a foreign subsidiary of a U.S. corporation (generally) be exempt from U.S. tax until the income is distributed as a dividend to the U.S. corporation—with a transition tax on untaxed foreign earnings.
The Tax Cuts and Jobs Act also modified how taxable income is calculated for foreign tax credit limitation purposes. See Comparison of changes to rules for foreign tax credits under TCJA, IR-2018-235 and the proposed regulations for more information. The new foreign tax credit rules apply to 2018 and future years.