Anonymous ID: 3cc4b1 Nov. 11, 2018, 12:28 p.m. No.3855519   🗄️.is 🔗kun

>>3855121

> Branch terminations

Sec. 884(a), enacted as part of the Tax Reform Act of 1986, P.L. 99-514, imposes a branch profits tax on the effectively connected income (ECI) of a U.S. branch of a foreign corporation when those earnings are repatriated, or deemed repatriated, to the home office of the branch. Sec. 884 was enacted with the legislative intent of eliminating any disparate tax treatment between U.S. corporate and flowthrough subsidiaries of foreign corporations when there are actual or deemed outbound distributions of the earnings from those U.S. subsidiaries to foreign corporate parents.

 

In certain situations, a branch profits tax may also be imposed on gain derived from certain direct or indirect dispositions of assets of a foreign corporate parent, which may result in the unintended double taxation of income of foreign persons. This item addresses certain limited exceptions to branch profits tax liability pursuant to Sec. 897, as enacted by the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA), P.L. 96-499, and the branch termination exception of Temp. Regs. Sec. 1.884-2T, of which every foreign taxpayer and tax adviser should be aware.

 

https://www.thetaxadviser.com/issues/2016/mar/exceptions-to-branch-profits-tax-available-to-foreign-corporations-with-us-tax-obligations.html