The Resource Voluntary payment of foreign income tax for adjustments that do not change taxable income

Voluntary payment of foreign income tax for adjustments that do not change taxable income

Label
Voluntary payment of foreign income tax for adjustments that do not change taxable income
Title
Voluntary payment of foreign income tax for adjustments that do not change taxable income
Creator
Subject
Language
  • eng
  • eng
Summary
There are certain fact patterns where taxable income for U.S. federal income tax purposes does not increase even if there is a transfer pricing adjustment: (1) transactions between a U.S. corporation and its foreign branch or disregarded entity (DE), which typically are ignored for U.S. tax purposes; (2) transactions between a U.S. corporation and the foreign branch or DE of a U.S. affiliated entity, which do not result in any additional income on the U.S. consolidated return; and (3) transactions involving a branch or DE of a controlled foreign corporation (CFC). Because transfer pricing adjustments in the above-mentioned fact patterns do not generally result in additional taxable income for U.S. tax purposes, a taxpayer may be inclined to give less attention to transfer pricing. However, the IRS pointed out in a recent CCA that proper application of Code Sec. 482 to these transactions may determine the availability of a foreign tax credit
Citation source
In: International tax journal. - Chicago. - Vol. 40 (2014), no. 4 (July-August) ; p. 5-6, 46-47
http://library.link/vocab/creatorName
  • Riedy, J.A
  • McGill, S.P
Geographic coverage
North America
Language note
English
http://library.link/vocab/subjectName
  • foreign tax credit
  • disregarded entity
  • CFC
  • foreign income tax
  • transfer pricing
Label
Voluntary payment of foreign income tax for adjustments that do not change taxable income
Link
https://library.ibfd.org/custom/web/SD_PDF/scans/2014/G-I/ITJ/4_5-6.zip
Publication
Note
20141125

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