Controlled foreign corporation


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Controlled foreign corporation (CFC)

A foreign corporation whose voting stock is more than 50% owned by US stockholders, each of whom owns at least 10% of the voting power.

Controlled Foreign Corporation

A company registered in and regulated by a foreign country that has at least 50% American ownership. Setting up a corporation in a foreign country may have tax advantages; for example, a country may encourage companies to register in it by having no corporate tax. The IRS works within the context of foreign treaties to determine how earnings from controlled foreign corporations are taxed in the United States.
References in periodicals archive ?
For Tax Year 2008, controlled foreign corporations were tax owners of 17,548 FDEs.
Department of the Treasury and the Internal Revenue Service relating to proposed regulations regarding the treatment of foreign base company sales income from property produced under contract manufacturing arrangements and sold by controlled foreign corporations under section 954(d) of the Internal Revenue Code.
Any insurer, including a mutual insurer, that surpasses the 25 percent threshold is considered a controlled foreign corporation but only regarding its related party insurance income.
The 1962 legislation also increased the Form 2952 filing requirement by extending the definition of a controlled foreign corporation to include any foreign corporation within a chain of control.
Confidential Transactions of Controlled Foreign Corporations
55) Subsection 1297(f) of the Code provides that asset values are generally determined by value, except that assets of a non-publicly traded corporation that is a controlled foreign corporation or that makes an election may be determined by their adjusted bases.
1248 applies to shareholders with a 10%-or-more voting power in a controlled foreign corporation.
6011-4T(c)(3)(ii) requires certain United States shareholders in controlled foreign corporations to report their "indirect" participation if the controlled foreign corporation directly participates in a reportable transaction described in Temp.
Such a foreign corporation is equivalent to a controlled foreign corporation.
TEI recommended eliminating individual filings for each controlled foreign corporation (CFC) and substituting a schedule of CFCs containing key information, including the balance in the earnings and profits (E&P) and tax pools.
A foreign corporation below the third tier must be a controlled foreign corporation (CFC) and the U.
Especially for companies that are continually audited, TEI recommends eliminating individual filings for each controlled foreign corporation (CFC) and substituting a schedule of CFCs containing key information, including the balance in the earnings and profits (E&P) and tax pools.

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