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.
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):
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.
© 2021 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. 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 information contained 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.