(Adds fresh quotes and details on proposed regulations)
By David Morgan
WASHINGTON, Aug 1 (Reuters) - U.S. companies got more clarity on Wednesday on bringing more than $2.6 trillion in profits held abroad into the United States, as required under tax changes enacted by the U.S. Congress in December.
The U.S. Treasury proposed regulations for repatriating those profits, held abroad for decades, at special low tax rates of 15.5 percent on cash and cash equivalents and 8.0 percent on illiquid assets.
Treasury's 249-page proposed rulebook specifies which foreign holdings qualify for each rate and how much relief companies can expect from foreign tax credits. A final rule is expected by mid-2019.
"Companies now know with more certainty the tax that they have to pay," said Jose Murillo, a tax expert at the consulting group Ernst & Young LLP. The regulations also include guidance for individuals with foreign investments.
Trump and his Republican allies view the repatriation as a vital stimulus to the U.S. economy. The Democratic party criticizes the new tax law as a giveaway to the wealthy and says much of the money is being used for repurchasing shares and declaring dividends.
"Our administration's policies are focused on creating a more competitive system for business," U.S. Treasury Secretary Steven Mnuchin said in a statement.
The nonpartisan congressional Joint Committee on Taxation estimated that the one-time repatriation tax will raise $339 billion in government revenues over the next decade. Companies have eight years to pay it off.
"For the most part, this is consistent with what companies were expecting," said Caroline Ngo, a tax attorney at the law firm McDermott, Will & Emery.
Some of the rules may disappoint companies that hoped to minimize their exposure to the higher 15.5 percent tax rate by, for instance, denying use of credits for additional foreign taxes firms can incur when moving money to the U.S., experts said.
The regulations also do not narrow calculations on notional cash pooling arrangements that companies often set up between units for cash management. As a result, companies could pay more tax on high cash levels due to duplication.
Some corporations had hoped to avoid the higher cash tax rate on strategic investments in publicly traded companies, but experts said the rules provide no such relief.
The rules require companies to identify taxable income as the larger of the amounts as of Nov. 2, 2017, and Dec. 31, 2017.
To prevent companies from avoiding taxation by reducing income between those dates, the new rule ignores transactions that might affect the calculation.
Experts said the proposed rule is only the first in an expected series from the Treasury needed to clarify the new tax law's international provisions before some U.S. corporations undertake major investment decisions with the money.
Companies are said to be awaiting Treasury rules on other provisions, including the new levy on Global Intangible Low Tax Income, or GILTI, and rules on previously taxed income. (Reporting by David Morgan; Editing by Kevin Drawbaugh, David Gregorio and Jonathan Oatis)