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International Tax Blog - New and Interesting International Tax Issues

PLRs of the 5th week of 2013


Yesterday the IRS published the following Private Letter Rulings relating to international taxation.

PLR 201305002 - Late IC DISC election.  Form 4876-A. Code §992(b)(1)(A).

PLR 201305006 - Contractual arrangement treated as a separate foreign business entity for which a check-the-box election could be made to treat the arrangement as a foreign corporation for U.S. tax purposes.  Treas. Reg. §301.7701-2, -5.  Form 8832.  

In the PLR, the Taxpayer intended to enter into a joint venture with an Affiliate by executing a “profit participation agreement (the “Agreement”) under which Affiliate will acquire a percentage interest in the capital, profits, and losses of the Taxpayer’s branches in a particular region in return for a cash investment.  No separate juridical legal entity will be created and the Taxpayer will retain legal ownership of all assets, liabilities, and contractual obligations of the region branches.  The Agreement (i) will be signed outside the U.S., (ii) will be governed by the laws of a foreign country, and (iii) will be subject to the exclusive jurisdiction of the foreign courts.

Tags: 991 IC DISC, 7701-3 Check-the-Box Elections, Authority - PLRs / CCAs, Form 8832