International Taxation

Chapter 1 1-1

Overview of U.S. Corporate International Taxation 1-1

Summary 1-2

U.S. Outbound Tax Concepts 1-3

U.S. Inbound Tax Concepts 1-4

Other fundamental U.S. international tax concepts 1-5

International tax fundamental concepts 1-6

Recognition of income 1-8

Introduction of International Tax Provisions enacted by the TCJA 1-10

Introduction and listing of U.S. international tax provisions 1-11

U.S. Export Tax Incentive through an IC-DISC 1-15

Chapter 2 2-1

Foreign Branches 2-1

Operating through a foreign branch — summary 2-2

Form 8832, “Entity Classification Election”—“check-the-box” election 2-8

Threshold of liability to foreign tax 2-10

Foreign currency issues as applied to branches, or QBUs 2-11

QBU 2-14

Section 988 transactions 2-22

Dispositions of nonfunctional currency 2-24

Translations with respect to debt instruments 2-26

U.S. dollar approximate separate transactions method 2-30

Chapter 3 3-1

Determining Source of Income 3-1

Personal property 3-9

Chapter 4 4-1

Allocation and Apportionment of Deductions 4-1

Allocation and apportionment of expenses, losses, and other deductions to U.S.

and foreign-source income 4-2

Allocation and apportionment of certain deductions 4-5

Allocation and apportionment of interest expense 4-6

Special apportionment rules for partnerships 4-11

Special apportionment rules for corporations 4-12

Special allocations of interest expense 4-13

Research and experimentation expenditures 4-15

Chapter 5 5-1

U.S. Foreign Tax Credit System 5-1

FTC system post-TCJA overview and status 5-2

Internal Revenue Code sections dealing with foreign taxes 5-3

FTC expanded rules and examples 5-18

Creditable foreign taxes 5-25

Timing and recognition issue 5-27

Partnerships, LLCs (taxed as U.S. partnerships), and S corps 5-33

Chapter 6 6-1

Outbound International Tax Provisions under Tax Cuts and Jobs Act 6-1

Note to Reader or Practitioner 6-3

CFCs and Subpart F — Outline 6-5

Foreign base company sales income—Examples 6-15

FBC Services Income—Example and details 6-21

TCJA outbound international tax provisions 6-23

PFICs 6-43

Transfers of property by U.S. persons to foreign corporations — Section 367 6-46

Chapter 7 7-1

Inbound Taxation: U.S. Withholding Tax & Tax Treaty Concepts 7-1

Threshold for U.S. inbound taxation 7-3

U.S. trade or business > Effectively Connected Income (ECI) 7-6

Thin capitalization — interest expense limitation rules 7-10

FIRPTA — Section 897 7-14

U.S. inbound tax reporting obligations 7-17

IRC Chapter 3 — U.S. source withholding tax 7-18

IRC Chapter 3 withholding tax rules 7-20

FDAP (not ECI) 7-22

FDAP — Interest payment 7-23

FDAP — Dividends 7-25

FDAP — Royalties 7-28

FDAP — Rents 7-29

FDAP — Compensation for services 7-30

FDAP income 7-31

Gains from sale of personal property (for example, capital gains) 7-32

ECI exemption 7-33

Withholding tax obligations and procedures 7-34

Payment of withholding tax 7-37

Penalties for failure to withhold 7-39

Backup withholding 7-41

Partnership allocations 7-42

Withholding agent’s payment and reporting requirements — U.S. partnership 7-44

IRC Chapter 4 — FATCA “withholding” 7-45

Summary of U.S. tax treaties and conventions 7-48

U.S. bilateral income tax treaties 7-52

Chapter 8 8-1

Transfer Pricing and BEPS Overview 8-1

Summary of U.S. Transfer Pricing rules 8-2

BEPS 8-26

Glossary Glossary 1

Index Index 1

Solutions Solutions 1

Chapter 1 Solutions 1

Chapter 2 Solutions 1

Chapter 3 Solutions 3

Chapter 4 Solutions 4

Chapter 5 Solutions 5

Chapter 6 Solutions 7

Chapter 7 Solutions 8

Chapter 8 Solutions 12