close
Share with your friends

Final regulations: Amount determined under section 956 for corporate U.S. shareholders

Section 956, corporate U.S. shareholders

The U.S. Treasury Department and IRS today released for publication in the Federal Register final regulations (T.D. 9859) concerning the amount determined under section 956 for corporate U.S. shareholders. The 2017 tax law (Pub. L. No. 115-97) added a participation exemption system for the taxation of certain foreign income. These final regulations are intended to provide that the application of section 956 is consistent with the new participation exemption system.

1000

Related content

Today’s final regulations [PDF 301 KB] finalize November 2018 proposed regulations. Read TaxNewsFlash.

The final regulations affect certain domestic corporations that own (or are treated as owning) stock in foreign corporations.

Background

On November 5, 2018, Treasury and the IRS published proposed regulations (REG-114540-18) under section 956. No public hearing was requested or held, and no substantive comments were received with respect to the proposed regulations. The final regulations adopt the proposed regulations, with changes (as described in the preamble):

  • Allocation of hypothetical distribution
  • Domestic partnerships and their partners
  • Revisions to existing examples

Applicability date

The final regulations apply to tax years of a controlled foreign corporation (CFC) beginning on or after the date of publication in the Federal Register (scheduled May 23, 2019). 

 

The purpose of this report is to provide text of the final regulations.

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.KPMG International Cooperative (“KPMG International”) is a Swiss entity.

Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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.

Connect with us

 

Want to do business with KPMG?

 

Request for proposal