Оглавление
Adnan Islam. International Taxation
Table of Contents
Guide
Pages
Chapter 1 Overview of U.S. Corporate International Taxation. Learning objectives
Summary
U.S. Outbound Tax Concepts
Knowledge check
U.S. Inbound Tax Concepts
Other fundamental U.S. international tax concepts
International tax fundamental concepts. Definition of “U.S. person”
Example 1-1
Knowledge check
Recognition of income
Time of payment
Example 1-2
Example 1-3
Delivery of goods
Introduction of International Tax Provisions enacted by the TCJA. Select general tax provisions of the TCJA
Introduction and listing of U.S. international tax provisions. One-time repatriation tax on accumulated foreign subsidiary’s earnings, Section 965 “transition tax”
U.S. base erosion provisions — “BEAT,” Section 59A (inbound tax provision)
Global intangible low-taxed income, Sections 951A and 250
Foreign-derived intangible income, Section 250
Quasi-territorial system of taxation of U.S. C corporations, Section 245A
Foreign Tax Credit Regulations and other U.S. international tax provisions
U.S. Export Tax Incentive through an IC-DISC. IC-DISC
Ownership and organizational structure
Taxation of an IC-DISC
Commissions
Annual maintenance of IC-DISC
Chapter 2 Foreign Branches. Learning objectives
Operating through a foreign branch — summary
Foreign Branch Income Taxation — Post-TCJA
Definition of a foreign branch for U.S. federal income tax purposes post-TCJA
Foreign branch income limitations and repeal of ACTB exception
Whether a foreign business operation is a branch or a corporation
Example 2-1
Per se corporations
Knowledge check
Form 8832, “Entity Classification Election”— “check-the-box” election
No entity classification election made
Effect of designations under foreign law
Knowledge check
Threshold of liability to foreign tax
Calculating income of a foreign branch
Functional currency
Foreign currency issues as applied to branches, or QBUs
QBU and functional currency
QBU
Example 2-2
Example 2-3
Example 2-4
Example 2-5
Example 2-6
Example 2-7
Example 2-8
Example 2-9
Functional currency
Notice to amend final Section 987 regulations
Knowledge check
Example 2-10
Election to use the dollar as functional currency of a qualified QBU
Immediate recognition
Election
Branches of QBUs
Section 988 transactions
Example 2-11
Example 2-12
Knowledge check
Dispositions of nonfunctional currency. Recognition and computation of exchange gain or loss
Example 2-13
Example 2-14
Translations with respect to debt instruments. Interest income
Exchange gain or loss
Example 2-15
Example 2-16
Character of gains or losses
Source of gains or losses
U.S. dollar approximate separate transactions method
Example 2-17
Chapter 3 Determining Source of Income. Learning objectives
Summary of source of income rules
Interest income
Dividends
Dividend equivalent payments
Guarantee of indebtedness
Personal services
Transportation income
Scholarships, grants, prizes, and awards
Pensions and annuities
Rents or royalties
Real property
Summary of source rules for income
Knowledge check
Personal property
Knowledge check
Chapter 4 Allocation and Apportionment of Deductions. Learning objectives
Allocation and apportionment of expenses, losses, and other deductions to U.S. and foreign-source income
Example 4-1
Knowledge check
Allocation and apportionment of certain deductions
Allocation and apportionment of interest expense
Example 4-2
Asset classification for purposes of apportionment
Knowledge check
Assets producing exempt income
Knowledge check
Allowable interest deductions
Example 4-3
Apportionment rules for individuals, estates, and certain trusts
Example 4-4
Special apportionment rules for partnerships
Special apportionment rules for corporations
Example 4-5
Special allocations of interest expense
Controlled foreign corporation netting rule
Research and experimentation expenditures
Exclusive apportionment
Sales method
Gross income methods
Example 4-6
Affiliated group considerations
Knowledge check
Stewardship expenses attributable to dividends received
Legal and accounting fees and expenses
Income taxes
Example 4-7
Losses on the sale, exchange, or other disposition of personal property other than stock
Example 4-8
Losses on the sale, exchange, or other disposition of stock
Dividend recapture amount
Example 4-9
NOL deduction
Charitable contributions
Personal exemptions
Domestic production activities deduction
Notes
Chapter 5 U.S. Foreign Tax Credit System. Learning objectives
FTC system post-TCJA overview and status
Internal Revenue Code sections dealing with foreign taxes
FTC rules — Summary
FTC system post-TCJA and subsequent proposed regulations
Proposed regulations — Expanded summary of the primary provisions
Income and expense sourcing rules and effect on FTC
Section 904 limitations and FTC baskets
Process and IRS framework for obtaining the FTC — Pre-TCJA
Eligible foreign taxes
Credit applicable only to taxes
Tax must be based on “income”
Taxes “in lieu of” income taxes
Denial of FTC for certain countries
Payment or accrual of the foreign tax
Substantiation requirements
Election of FTC
Changing the election
Calculating creditable tax
Cash-basis taxpayers
Accrual-basis taxpayers
Changes in the amount of foreign taxes claimed
Foreign tax redetermination defined
Effects of exchange fluctuations
FTC limitation
Carryback and carryover of excess credits
Taxable income and the FTC
Expenses related to FSI
Knowledge check
FTC expanded rules and examples
Example 5-1
Capital gains and losses
Foreign gains offset by U.S. losses
Example 5-2
Separate limitation categories
Example 5-3
Allocation of taxes
Example 5-4
Income resourced by treaty
Example 5-5
Choosing a deduction or a credit
Example 5-6
The 10-year rule
Example 5-7
Knowledge check
Creditable foreign taxes. Example 5-8—“Creditable” foreign taxes
Taxes on “net income”
Example 5-9—FTC based on net income
Timing and recognition issue. Transactions that are not realization events
Example 5-10
Deemed dividends
Example 5-11
Example 5-12
Affiliate as agent
Example 5-13
Withholding tax
Example 5-14
Example 5-15
Partnerships, LLCs (taxed as U.S. partnerships), and S corps
Example 5-16
Example 5-17
Example 5-18
Knowledge check
Contested foreign taxes
Knowledge check
Note
Chapter 6 Outbound International Tax Provisions under Tax Cuts and Jobs Act. Learning objectives
Note to Reader or Practitioner
CFCs and Subpart F — Outline. General considerations
CFCs and Subpart F income—Summary of technical definitions and concepts
Special rule for certain branch income
Property manufactured, produced, grown, or extracted
Determination of country of use, consumption, or guidelines
Section 956 — Investment in, or increase in, earnings in U.S. property
Proposed Regulations under Section 956 in coordination with Section 245A
2016 Regulations under Sections 954 (Subpart F) and 956
Operative rules of Section 956 (may be superseded by 2018 regulations pursuant to TCJA)
Earnings and profits
Exclusion of previously taxed E&P
Special rules for foreign tax credit
Knowledge check
Foreign base company sales income—Examples
Goods manufactured, produced, or assembled by CFC
Branch rule
Knowledge check
Rate comparisons
Example 6-1
Sales or purchasing branches
Example 6-2
Manufacturing branches
Example 6-3
FBC Services Income—Example and details
Basic example
TCJA outbound international tax provisions. Quasi-territorial system for U.S. C corporations (participation exemption or dividend received deduction)
Technical summary of the foreign DRD or participation exemption per Section 245A
Section 965 transition tax (or one-time repatriation tax)
Select technical provisions of Section 965 one-time transition tax (or “repatriation tax”)
FDII, Section 250
Summary of FDII Proposed Regulations, March 04, 2019
Key points of the FDII proposed regulations, March 04, 2019
FDDEI sales (and license or royalty) transactions
FDDEI service transactions
GILTI, Section 951A
GILTI example
Summary of GILTI Proposed Regulations, September 13, 2018
GILTI regulations — Select technical provisions for determining tested income and tested losses
Other (outbound) international tax provisions
PFICs
Example 6-4
Knowledge check
Ordinary and necessary exception
Example 6-5
Transfers of property by U.S. persons to foreign corporations — Section 367. The U.S. toll charge on cross-border transactions
Chapter 7 Inbound Taxation: U.S. Withholding Tax & Tax Treaty Concepts. Learning objectives
Executive summary
Threshold for U.S. inbound taxation
Sourcing of income
Engaged in a U.S. trade or business prerequisite
U.S. trade or business > Effectively Connected Income (ECI)
Knowledge check
Branch profits tax — Section 884
Knowledge check
Thin capitalization — interest expense limitation rules
Computation of ATI — basis for the deduction limitation amount
BEAT, Section 59A
Matching principle — Timing of outbound payments and deductions under Section 267
FIRPTA — Section 897
Obligation of the buyer or withholding agent
Remittance of withholding tax
Definitions pertinent to FIRPTA
Reduced withholding of tax
Rates of withholding
U.S. inbound tax reporting obligations
Knowledge check
IRC Chapter 3 — U.S. source withholding tax
Example 7-1
Example 7-2
Example 7-3
Knowledge check
IRC Chapter 3 withholding tax rules
Example 7-4
FDAP income, Sections 871 and 881
FIRPTA — USRPI, U.S. real estate, USRPHC
Foreign partners of a U.S. (operating) partnership
FDAP (not ECI)
Knowledge check
FDAP — Interest payment
Original issue discount
Portfolio interest
Branch-level interest tax
Withholding tax rate on interest payments and treaty application
Knowledge check
FDAP — Dividends
Example 7-5
Effectively connected dividends
Redemptions, stock dividends, and exchanges
Section 304 distributions — Sale of intra-corporate group member
Example 7-6
Withholding tax rate on dividend payments and treaty application
Knowledge check
FDAP — Royalties
FDAP — Rents
FDAP — Compensation for services. Nonresident alien individuals
Foreign corporations and partnerships
FDAP income
Fixed
Determinable
Annual or periodical
Gains from sale of personal property (for example, capital gains)
ECI exemption
Withholding tax obligations and procedures
Timing of obligation to withhold
Payees subject to withholding — Foreign persons
Amount subject to withholding
Statutory withholding rates
Effect of treaties on withholding
Treaty benefits qualification of foreign payee
Payment of withholding tax
Filing of returns by withholding agent
Knowledge check
U.S. tax return filing by foreign payees (Forms 1120F or 1040NR)
Knowledge check
Penalties for failure to withhold
Accuracy-related penalty
Fraud penalty
Penalty for failure to deposit taxes
Liability for uncollected or unpaid tax
Criminal penalties
Backup withholding
Example 7-7
Certification of taxpayer identification number
Partnership allocations
Definition of foreign partner
ECTI of a U.S. partnership
Withholding agent’s payment and reporting requirements — U.S. partnership
IRC Chapter 4 — FATCA “withholding”
Withholding on payments to FFIs and NFFEs
Knowledge check
Summary of U.S. tax treaties and conventions
Tax treaty background
U.S. bilateral income tax treaties
Taxes covered
Jurisdictions, states, or countries covered
Treaties and the IRC
Claiming that a treaty provision overrides the IRC
Disclosure of a treaty-based position that reduces tax
Knowledge check
Chapter 8 Transfer Pricing and BEPS Overview. Learning objectives
Summary of U.S. Transfer Pricing rules
Acceptable or reasonable transfer pricing methods. Use of tangible property
Transfers of tangible property
Use or transfer of intangible property
Services
Loans and advances
Taxpayer documentation
Transfers of tangible property
Transfers of intangible property
Services
Knowledge check
General transfer pricing considerations
Example 8-1
Pricing under the regulations
The CUP method CUP
Example 8-2
Knowledge check
The resale price method
The cost plus method
Example 8-3
Example 8-4
Example 8-5
The CPM
Example 8-6
Knowledge check
Example 8-7
Example 8-8
Other methods
Example 8-9
Best method rule
Confirmation of results by another method
Example 8-10
Example 8-11
Example 8-12
BEPS
Tax Glossary
Index
INTERNATIONAL TAXATION. BY ADNAN ISLAM, JD, MBA, LL.M, CPA
Solutions. Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7
Chapter 8
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