Considerations for multinationals with US and Maltese operations
This discussion explores certain issues that multinationals should consider when deciding whether to use Malta as part of their worldwide operations.
Foreign Subsidiaries
Transfer pricing and the pandemic recession: What to do about it
MNEs will need to reevaluate their pre-pandemic transfer-pricing approach based on an updated application of the arm’s-length principle and be prepared to defend changes in the approach and results.
Transfer pricing and sales/use tax
This discussion outlines the basics of sales and use tax and transfer pricing, considers how intercompany transfer pricing may unintentionally lead to sales tax exposure, and offers steps to avoid audit assessments and penalties.
IRS finalizes rules for 100% dividends-received deduction, GILTI
The IRS issued final rules on the Sec. 245A extraordinary disposition rule and the Sec. 951A disqualified basis and disqualified payment rules, as well as reporting requirements to facilitate the rules.
GILTI and Subpart F treatment of distributions of appreciated property
Under the Subpart F regime, income subject to the regime is initially defined by what it includes, while under the GILTI regime, income subject to the regime is initially defined by what it excludes. This article discusses the application of these different approaches in the context of nonliquidating distributions from a controlled foreign corporation to a U.S. shareholder.
Final rules coordinate Sec. 245A and Sec. 951A
The IRS issued final rules on the Sec. 245A extraordinary disposition rule and the Sec. 951A disqualified basis and disqualified payment rules, as well as reporting requirements to facilitate the rules.
Foreign income taxes deemed paid and the PTEP rules
Treasury and the IRS temporary regulations include rules for determining foreign income taxes deemed paid under Sec. 960, which pertains to the “deemed paid” foreign tax credit.
IRS issues more rules on GILTI tax
The IRS issued final regulations under the GILTI rules on the treatment of income subject to a high rate of foreign tax. At the same time, the IRS issued proposed rules conforming the GILTI high-tax exception rules with the Subpart F high-tax exception.
FDII and GILTI regulations finalized
The IRS issued final regs. on the foreign-derived intangible income deduction and the global intangible low-taxed income provisions enacted by the TCJA.
Taxpayer avoids Sec. 954(d)(1) Scylla but not Sec. 954(d)(2) Charybdis
A US company’s income earned by a Luxembourg subsidiary from sales of products made by a Mexican branch of the subsidiary is taxable as foreign base company sales income under Subpart F.
Reducing GILTI liability using CFC accounting method change procedures
Methods of accounting may be an effective tool in tax planning for GILTI; however, method change procedures for CFCs differ from procedures for domestic taxpayers.
Puerto Rico: A permanent tax deferral in a GILTI world?
Under the right set of circumstances, there may be a significant opportunity for tax savings in Puerto Rico.
Individual election to be taxed at corporate rates
Until now, shareholders had rarely invoked the Sec. 962 election to be taxed at corporate rates, and, as a result, most states have provided no specific guidance on how to treat a Sec. 962 election for state income tax purposes.
Crime doesn’t pay — and may be taxable under Subpart F
One potentially important component of Subpart F income under Sec. 952(a)(4) is illegal bribes, kickbacks, or other payments made by or on behalf of a CFC to a foreign government official, employee, or agent.
Cross-border M&As post-TCJA: Three things advisers should know
This item highlights three often overlooked or misunderstood factors potentially disrupting international transactions.
Unintended CFC downward attributions get safe harbor
U.S. shareholders who own stock in foreign corporations were given a safe harbor by the IRS, making it easier for them to establish that they are not shareholders in a controlled foreign corporation.
Demystifying the new international E&P rules
This discussion provides a summary of some of the basic previously taxed earnings and profits ordering rules likely to apply to distributions made by controlled foreign corporations .
Treasury reverses position on qualifying income for RICs invested in certain foreign corporations
The final rule allows a RIC invested in CFCs and PFICs to treat the required CFC inclusion or PFIC inclusion respectively, as qualifying income for purposes of a RIC’s qualifying income test.
Foreign-derived intangible income guidance addresses many open questions
Sec. 250 allows domestic corporations a deduction for their “foreign-derived intangible income.” Proposed regulations that were issued earlier this year answer many outstanding questions regarding the calculation of this new deduction but also include documentation requirements that may prove onerous for some taxpayers.
CFC worthless stock deductions after tax reform
This discussion focuses on the GILTI and BEAT implications for the benefit received by a U.S. corporation reporting a worthless stock deduction under Sec. 165(g) for a CFC’s stock.
