Regulations: Hybrid arrangements (text of final and proposed regulations)

Hybrid arrangements (text of regulations)

The U.S. Treasury Department and IRS today released for publication in the Federal Register final regulations (T.D. 9896) and proposed regulations (REG-106013-19) as guidance concerning hybrid arrangements—that is, arrangements or entities that U.S. and foreign tax law classify differently for tax purposes.

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The final regulations [PDF 501 KB] (56 pages as published in the Federal Register) provide guidance regarding:

  • Hybrid dividends and certain amounts paid or accrued pursuant to hybrid arrangements
  • Dual consolidated losses and entity classifications to prevent the same deduction from being claimed under the tax laws of both the United States and a foreign jurisdiction
  • Information reporting to facilitate the administration of certain rules in the hybrid arrangement regulations

The proposed regulations [PDF 377 KB] (16 pages as published in the Federal Register) include rules for adjusting hybrid deduction accounts to take into account earnings and profits of a controlled foreign corporation that are included in income by a United States shareholder.

  • The proposed regulations also address, for purposes of the conduit financing rules, arrangements involving equity interests that give rise to deductions (or similar benefits) under foreign law.
  • The proposed regulations address the treatment of certain payments under the global intangible low-taxed income (GILTI) provisions.


The purpose of this report is to provide text of the regulations. More detailed discussions will be provided by KPMG in future reports.

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