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 ?
A further update on the controlled foreign company legislation (anti-avoidance legislation aimed at taxing in the UK, profits that have been artificially diverted from the UK to an overseas country).
This is clearly illustrated by the announcement in the PBR to introduce changes to the way in which the UK taxes income of certain overseas subsidiaries of UK groups - the so called Controlled Foreign Company provisions.
These raised tax through tightening the controlled foreign company and double tax relief rules, as well as introducing disallowance of interest expense in certain multinational investment structures.

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