The IRS wants to know where cloud computing income comes from, for tax purposes

The US Treasury Department and the IRS are holding a public hearing on new rules for taxing income from cloud computing. These rules will determine which country gets to tax profits from cloud services.

For years, it has been unclear how to tax income from cloud services that operate across borders. This meant companies could often choose where to report their profits, potentially reducing their tax burden. These proposed rules aim to define where that income originates, making it harder for companies to shift profits to lower-tax jurisdictions. This could mean more tax revenue for the US, but also higher costs for cloud providers.