The IRS wants to decide where cloud computing income is earned

The US Treasury Department has proposed new rules for how companies determine where income from cloud computing is earned. This means the US government will have a clearer way to tax global cloud transactions.

For years, companies have had flexibility in how they report where their cloud income originates, which affects how much tax they pay and to which countries. These proposed rules aim to standardize that process, potentially increasing the tax burden for some companies and shifting revenue to the US. This is part of a global effort by governments to update tax laws for the digital economy.