[정부부처 자료] 전체
| 제목 | Final 367(b) Regulations | ||
|---|---|---|---|
| 기관명 | 기타 | 작성일자 | 2000 . 01 . 22 |
|
The Sec. 367(b) final regulations addressing the application of the nonrecognition exchange provisions in Subchapter C to transactions that involve one or more foreign corporations were released. The regulations state the principal purpose of Sec. 367(b) is to prevent the avoidance of U.S. tax that can arise when the Subchapter C provisions apply to transactions involving foreign corporations. The potential for tax avoidance arises because of differences between the manner in which the United States taxes foreign corporations and their shareholders and the manner in which the United States taxes domestic corporations and their U.S. shareholders. Previously, Sec. 367(b) was viewed essentially as a backstop to Sec.1248. Regulation Provisions The final regulations amend the 1991 proposed regulations' definition of the all earnings and profits amount to exclude amounts attributable to the holding period of non-U.S. persons. The final regulations do not adopt the 1991 proposed regulations provision requiring the recognition of exchange gain (or loss) on a shareholder's capital account. However, the final regulations reserve the issue for further consideration. Less than 10% shareholders can elect either gain recognition or including the all earnings and profits amount in income subject to certain requirements being met. The final regulations also include a new de minimis exception, which applies to small shareholders whose stock in the foreign acquired corporation has a fair market value below $50,000 on the date of the exchange. These shareholders are not required to include gain or a deemed dividend under the Sec. 367(b) regulations. The Reg. Secs. 7.367(b)-9 and 7.367(b)-10(h) attribution regimes are eliminated. Effective Date The effective date is 30 days after the regulations are published in the Federal Register - anticipated to be January 24, 2000. One may elect to apply the regulations to exchanges where the due date for the tax return is after the effective date of the regulations. PwC Observes: Unfortunately, this is not the final tranche of Sec. 376(b) regulations. The IRS and Treasury intend to issue other proposed regulations that provide rules regarding the combination and separation of corporate-level tax attributes in applicable Sec. 367(b) exchanges. |