The Internal Revenue Service issued proposed regulations Wednesday on foreign tax credits for businesses and individuals after major changes in last year’s tax overhaul.

The proposed regulations offer guidance on calculating foreign tax credits, and include rules for allocating and apportioning deductions that determine taxable income from foreign sources. There is a rule that treats some assets as partially exempt for expense allocation purposes. The regulations also set rules on applying the new foreign tax credit limitation categories, and provide a taxpayer-favorable elective transition rule for carryovers of foreign tax credits.

The Tax Cuts and Jobs Act that Congress passed last December included a number of significant provisions governing how the federal government taxes foreign activities. They include a dividends-received deduction for dividends from foreign subsidiaries and the addition of Global Intangible Low-Taxed Income rules, also known as GILTI, which subject certain foreign earnings whose taxes would have been deferred under previous law to current U.S. taxes.

Last year’s tax overhaul also modified the foreign tax credit rules, which permit U.S. taxpayers to offset their taxes by the amount of foreign income taxes they have paid or accrued, in several significant ways to reflect the new international tax rules. These changes include the repeal of rules for determining deemed-paid foreign tax credits on dividends on the basis of foreign subsidiaries’ cumulative pools of earnings and foreign taxes, and the addition of two distinct foreign tax credit limitation categories for foreign branch income and amounts includible under the new GILTI provisions.

The new tax law also changed how taxable income is figured for the foreign tax credit limitation by disregarding some expenses related to income eligible for the dividends-received deduction and repealing the use of the fair market value method for allocating interest expense. The new foreign tax credit rules apply to this year and future years. The IRS and the Treasury Department are asking for public comments on the proposed rules.

“The Tax Cuts and Jobs Act is modernizing the U.S. tax system and is bringing jobs and capital back to America,” said Treasury Secretary Steven T. Mnuchin in a statement. “The proposed guidance provides clarity and certainty for taxpayers in applying the new law, as well as modernizes current regulations and repeals out-of-date provisions. We are equipping taxpayers with the autonomy and information they need to effectively manage their finances and grow American business as we shift to a territorial system.”