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 ?
The FDE data in this article pertain only to active FDEs that are owned by controlled foreign corporations.
Department of Treasury and the Internal Revenue Service issued final, temporary and proposed regulations to provide guidance 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 (hereinafter the "December 2008 regulations").
shareholder" and the lower 25 percent threshold of controlled foreign corporation status.
The Tax Reform Act of 1986 again refined the controlled foreign corporation concept in part to address the issue of U.
Substantially clarify the application and operation of the indirect participation rules, especially for reporting shareholders of controlled foreign corporations (CFCs).
A Court of Appeal affirmed (35) that, in calculating the includible portion of controlled foreign corporation subpart F foreign-source income in its water's-edge report, the taxpayer could statutorily exclude dividends paid by certain second-tier subsidiaries to certain first-tier subsidiaries, because they were paid out of unitary income.
The term []United States Shareholder[] means any shareholder described in section 951(b) without regard to whether the foreign corporation is a controlled foreign corporation.
parent that are part of a back-to-back loan arrangement with a controlled foreign corporation (CFC).
shareholders of a controlled foreign corporation (CFC) are required to include in current income certain income of the CFC (referred to as "Subpart F" income).
Under paragraphs (e), (f), (g) and (h) of this section, transactions in certain property give rise to gain or loss included in the computation of foreign personal holding company income if the controlled foreign corporation holds that property for a particular use or purpose.
And in 1997, Congress rectified an inequity that has existed for the past decade when it eliminated the overlap between the controlled foreign corporation and passive foreign investment company rules.
Coming regulations will reduce tax benefits of inversions by preventing certain uses of controlled foreign corporations and closing loopholes in the Sec.

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