The US Internal Revenue Service (IRS) and the Treasury Department have released final regulations addressing the Classification of Digital Content Transactions and Cloud Transactions. The regulation was published in the Federal Register on 14 January 2025 and took effect on the same date.
The final regulations modify the rules for classifying transactions involving computer programmes, including by applying the rules to transfers of digital content. They also provide rules for the classification of cloud transactions.
The rules apply for purposes of the international provisions of the Internal Revenue Code and generally affect taxpayers engaging in transactions involving digital content or cloud transactions.
