Form 8833: Claiming Income Tax Treaty Benefits for Corporations After Tax Reform

FDII, BEAT, GILTI, Identifying Treaty Provisions, Other Required Filings, Determining Whether to Claim or Forgo

Note: CLE credit is not offered on this program

A live 110-minute CPE webinar with interactive Q&A


Tuesday, October 22, 2019

1:00pm-2:50pm EDT, 10:00am-11:50am PDT

Early Registration Discount Deadline, Friday, September 27, 2019

or call 1-800-926-7926

This webinar will provide corporate tax advisers and compliance professionals with an in-depth and practical guide to completing IRS Form 8833 Treaty-Based Return Disclosure. The panel will discuss the permanent establishment rules, detail the requirements of Section 6114, identify scenarios where a tax treaty allows a taxpayer to claim a treaty benefit, and describe provisions in the 2017 tax law that may conflict with existing tax treaties.

Description

Determining whether a nonresident corporation may claim tax treaty benefits on income arising from a "permanent establishment" (PE) in the United States presents challenges for U.S. corporate tax advisers of foreign companies. The critical first step in calculating such income and resulting U.S. tax obligations is determining what standards apply in deciding whether a foreign corporation has a PE that would create a taxable presence.

Foreign-based multinational companies conducting business in the United States face varied tax treatment of their income and activities, depending on whether the corporation's country of residence has an income tax treaty with the United States. All U.S. bilateral income tax treaties contain a PE provision, which exempts a nonresident corporation's business profits from taxation unless the profits are attributable to a PE within the host country. Depending on the tax rates in the treaty countries, creating a PE in the United States can either reduce or increase a foreign-based multinational's foreign tax expense.

Provisions of the 2017 tax reform law's international regime may conflict with existing tax treaty provisions, creating additional complexity and challenges to the already complicated process for U.S. corporations of claiming a tax treaty benefit. In particular, the FDII deduction, GILTI provisions, and the BEAT rules may violate common nondiscrimination, business profits, and savings clauses common to U.S. tax treaties.

Listen as our experienced panel provides comprehensive guidance on how to read and interpret key income tax treaty provisions, report treaty-based positions on Form 8833, and obtain U.S. resident certification (Form 8802) to claim reduction or exemption from foreign income taxation under a treaty.

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Outline

  1. Treaty structure
  2. Permanent establishment rules
    1. Effectively connected income vs. permanent establishment
    2. Business profits attributable to a permanent establishment under U.S. treaties
    3. Permanent establishment treated as "functionally separate entity"
  3. Savings clauses
  4. Non-discrimination provisions
  5. Form 8833 specifics
    1. Identifying whether a taxpayer has a requirement to file Form 8833
    2. Identifying treaty articles and specific positions available under Section 6114
    3. Determining Section of Internal Revenue Code modified or overridden by the treaty article
    4. Dual-residence taxpayers under Section 7701
    5. Limitation of benefits exemptions
  6. Interrelation between Form 8833 requirements and other filing obligations
    1. W-8BEN
    2. Form 8802
    3. Form 1042
  7. Impact of tax reform law on claiming a treaty-based position
  8. Forgoing treaty benefits
    1. Impact of lower U.S. corporate tax rates on decision whether to claim or forgo treaty benefits
    2. Future impact of forgoing treaty benefits
    3. Consistency principle

Benefits

The panel will discuss these and other critical issues:

  • Factors tax advisers to multinationals should consider when deciding what standard to use in determining whether to avail the branch of treaty benefits under a PE analysis
  • When a multinational should elect to forgo treaty benefits
  • How to apply specific treaty articles and code sections to Form 8833
  • The impact of tax treaty savings and non-discrimination clauses on new interest limitations and BEAT provisions

Faculty

Bodoh, Devon
Devon M. Bodoh

Partner
Weil Gotshal & Manges

Mr. Bodoh advises clients on cross-border mergers, acquisitions, inversions, spin-offs, other divisive strategies,...  |  Read More

McCormick, Patrick
Patrick J. McCormick, J.D., LL.M.

Principal
Drucker & Scaccetti

Mr. McCormick specializes in the areas of international taxation, tax compliance, and offshore reporting...  |  Read More

Skinner, William
William R. Skinner

Partner
Fenwick & West

Mr. Skinner focuses his practice on U.S. international taxation, with a particular emphasis on tax planning and...  |  Read More

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