Possessions corporation

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Possessions corporation

A type of corporation permitted under the US tax code whose branch operation in a US possession can obtain tax benefits as though it were operating as a foreign subsidiary.

Possessions Corporation

A U.S. corporation that does a significant amount of business in an American overseas possession, usually in Puerto Rico. The IRS allows these corporations to take a tax credit for the business they conduct in the possessions. See also: Form 5735.
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Our effective tax rate increased in the first quarter of fiscal 2007 from the first quarter of fiscal 2006 partially due to the expiration of a federal tax credit for possession corporations, which provided a tax benefit related to our operations in Puerto Rico.
possession corporations Total Total claiming credit assets receipts (1) (2) (3) All U.
government began reacting, legislatively, to this defect in 1982--with the special measures for possession corporations (Code section 936(h)--and in 1984--with a rule of general application requiring recognition of royalty-type payments over time where intangibles are transferred under section 351 to a foreign corporation (Code section 367(d))--nothing in the Code (even as amended by the super royalty rule) imposes the burden, arising in such circumstances in Canada under section 69 of the Act, of a complete and total taxable disposition.
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