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.
The final regulations [PDF 501 KB] (56 pages as published in the Federal Register) provide guidance regarding:
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 purpose of this report is to provide text of the regulations. More detailed discussions will be provided by KPMG in future reports.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.