Software-As-A-Service: Navigating New Treasury Regulations on Digital & Cloud Transactions

The Treasury Department has released final regulations addressing the tax treatment of digital and cloud transactions, effective for 2025. These regulations resolve a long-standing question about software as a service (SaaS) payments while simultaneously creating new compliance challenges for accounts payable departments. This article examines the regulatory changes, their implications for domestic and international transactions, and the unresolved sourcing issues…