The Resource Role of Par. 482 principles to determine noncompulsory tax payments arising from transactions with foreign disregarded entities

Role of Par. 482 principles to determine noncompulsory tax payments arising from transactions with foreign disregarded entities

Label
Role of Par. 482 principles to determine noncompulsory tax payments arising from transactions with foreign disregarded entities
Title
Role of Par. 482 principles to determine noncompulsory tax payments arising from transactions with foreign disregarded entities
Creator
Subject
Language
eng
Summary
The IRS recently released Chief Counsel Advice (CCA) 201349015 dealing with the application of the U.S. arm's-length standard to various transactions involving disregarded entities, where the amount of income subject to foreign income tax was potentially subject to a transfer pricing adjustment. The purpose of the CCA was to provide guidance on how taxpayers should demonstrate that foreign taxes paid under a foreign income tax law are compulsory payments under the noncompulsory payment rule of Regs. Par. 1.901-2(e)(5)(i) and thus qualify as creditable foreign income taxes. In general, the CCA concludes that "U.S. transfer pricing principles may be relevant in determining whether non-arm's-length transfer prices result in noncompulsory payments of foreign tax, to the extent foreign tax law, as modified by tax treaties to which the foreign country is a party, includes similar arm's-length principles...." The question of how income and expense should be allocated between an owner and an entity disregarded as separate from its owner is an interesting one, and variants of this issue arise in contexts beyond the noncompulsory payment rule. CCA 201349015 provides a useful context for this discussion, although it is hard to see why in this context the primary legal reference should be to U.S., not foreign, transfer pricing principles. This article comments on CCA 201349015
Citation source
In: Tax management international journal. - Arlington. - Vol. 43 (2014),
http://library.link/vocab/creatorName
Sprague, G.D
Geographic coverage
North America
Language note
English
http://library.link/vocab/subjectName
  • transfer pricing
  • arm's length principle
  • disregarded entity
  • tax treaty
Label
Role of Par. 482 principles to determine noncompulsory tax payments arising from transactions with foreign disregarded entities
Instantiates
Publication
Label
Role of Par. 482 principles to determine noncompulsory tax payments arising from transactions with foreign disregarded entities
Publication

Library Locations

    • IBFD Library AmsterdamBorrow it
      Rietlandpark 301, Amsterdam, 1019 DW, NL
      52.3736660 4.9336932
Processing Feedback ...