tax planning opportunities, it can also create pitfalls for taxpayers that inadvertently establish unfavorable accounting methods for their foreign corporations
Persons With Respect to Certain Foreign Corporations
This exemption is justified for foreign corporations
owned by foreign persons.
in the finance, insurance, real estate, and rental and leasing sector held 42.
Another change for business applies to controlled foreign corporations
subsidiaries, so that foreign corporations
can control the timing and the impact of the second-level tax.
Form 926--Return by a US Transferor of Property to a Foreign Corporation
corporate shareholder (4) of a controlled foreign corporation
(CFC) (5) can elect to deduct 85 percent of the cash dividends received from such CFC during the taxable year, (6) resulting in an effective corporate income tax rate of just 5.
If a foreign corporation
(established in a qualifying jurisdiction that met a number of requirements) elected FSC treatment, a portion of the income earned from export sales was exempt from U.
This act was introduced because many foreign corporations
predominantly engaged in the conduct of active business operations currently are characterized as PFICs based on the asset test under the current PFIC rules.
The book income adjustment is an important concern for foreign corporations