[Federal Register Volume 78, Number 171 (Wednesday, September 4, 2013)]
[Rules and Regulations]
[Page 54391]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-21401]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9634]
RIN 1545-BK41
Determining the Amount of Taxes Paid for Purposes of the Foreign
Tax Credit
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations and removal of temporary regulations.
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SUMMARY: This document contains final regulations providing guidance
relating to the determination of the amount of taxes paid for purposes
of the foreign tax credit. These regulations address certain highly
structured arrangements that produce inappropriate foreign tax credit
results. The regulations affect individuals and corporations that claim
direct and indirect foreign tax credits.
DATES: Effective date: These regulations are effective on September 4,
2013.
Applicability date: For dates of applicability, see Sec. 1.901-
2(h)(3).
FOR FURTHER INFORMATION CONTACT: Jeffrey P. Cowan, at (202) 622-3850.
SUPPLEMENTARY INFORMATION:
Background
This document contains amendments to 26 CFR part 1. On July 18,
2011, a notice of proposed rulemaking (REG-126519-11) under section 901
of the Internal Revenue Code (Code) relating to the determination of
the amount of taxes paid for purposes of the foreign tax credit was
published in the Federal Register (76 FR 42076). In the same issue of
the Federal Register, final and temporary regulations were also issued.
The text of those temporary regulations served as the text of the
proposed regulations. No comments were received in response to the
notice of proposed rulemaking. No public hearing was requested or held.
This Treasury Decision adopts the proposed regulations with no
substantive change, and the corresponding temporary regulations are
removed.
Special Analyses
It has been determined that this Treasury decision is not a
significant regulatory action as defined in Executive Order 12866.
Therefore, a regulatory assessment is not required. It is hereby
certified that these regulations will not have a significant economic
impact on a substantial number of small entities. This certification is
based on the fact that these regulations will primarily affect
affiliated groups of corporations that have foreign operations, which
tend to be larger businesses. Moreover the number of taxpayers affected
and the average burden are minimal. Therefore, a Regulatory Flexibility
Analysis is not required. Pursuant to section 7805(f) of the Code, the
notice of proposed rulemaking preceding this regulation was submitted
to the Chief Counsel for Advocacy of the Small Business Administration
for comment on its impact on small business.
Drafting Information
The principal author of these regulations is Jeffrey P. Cowan,
Office of Associate Chief Counsel (International). However, other
personnel from the IRS and the Treasury Department participated in
their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Adoption of Amendments to the Regulations
Accordingly, 26 CFR part 1 is amended as follows:
PART 1--INCOME TAXES
0
Paragraph 1. The authority citation for part 1 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
0
Par. 2. Section 1.901-2 is amended by:
0
1. Adding a sentence at the end of paragraph (e)(5)(iv)(B)(1)(ii).
0
2. Removing paragraph (e)(5)(iv)(B)(1)(iii).
0
3. Revising the first sentence of paragraph (h)(2).
0
4. Revising paragraph (h)(3).
The revisions and addition read as follows:
Sec. 1.901-2 Income, war profits, or excess profits tax paid or
accrued.
* * * * *
(e) * * *
(5) * * *
(iv) * * *
(B) * * *
(1) * * *
(ii) * * * A foreign payment attributable to income of the entity
also includes a withholding tax (within the meaning of section
901(k)(1)(B)) imposed on a dividend or other distribution (including
distributions made by a pass-through entity or an entity that is
disregarded as an entity separate from its owner for U.S. tax purposes)
with respect to the equity of the entity.
* * * * *
(h) * * *
(2) Except as provided in paragraph (h)(3) of this section,
paragraph (e)(5)(iv) of this section applies to foreign payments that,
if such payments were an amount of tax paid, would be considered paid
or accrued under Sec. 1.901-2(f) on or after July 13, 2011. * * *
(3) The last sentence of paragraph (e)(5)(iv)(B)(1)(ii) of this
section applies to foreign payments that, if such payments were an
amount of tax paid, would be considered paid or accrued under Sec.
1.901-2(f) on or after September 4, 2013. See 26 CFR 1.901-
2T(e)(5)(iv)(B)(1)(iii) (revised as of April 1, 2013) for rules
applicable to foreign payments that, if such payments were an amount of
tax paid, would be considered paid or accrued under Sec. 1.901-2(f)
before September 4, 2013.
* * * * *
Sec. 1.901-2T [Removed]
0
Par. 3. Section 1.901-2T is removed.
Beth Tucker,
Deputy Commissioner for Operations Support.
Approved: August 6, 2013.
Mark J. Mazur,
Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 2013-21401 Filed 9-3-13; 8:45 am]
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