Foreign Outbound Transaction Planning: Navigating Deferral Under Subpart F and the New IRC Sections 367, 7874, and 385 Regulations

Recording of a 110-minute CPE webinar with Q&A


Conducted on Tuesday, August 16, 2016

Recorded event now available

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Program Materials

This webinar will provide corporate tax advisers with a broad and practical guide to foreign tax planning of outbound transactions. The panel will describe the various deferral structures allowed by the Internal Revenue Code, review the ownership and asset thresholds for “CFC” and “PFIC” status and detail the related reporting requirements for those entities. The panel will also take a critical look at key developments concerning outbound foreign transactions, including the new Anti-Inversion Regulations under Section 7874 and proposed new regulations under Sections 385 and 367(a) and (d).

Description

Integral to corporate tax planning for outbound transactions is an understanding of the deferral mechanisms the Code provides for U.S. corporate taxpayers engaged in foreign business activities. With the Treasury increasingly focused on closing the “tax gap” created in part by foreign transfers, it is more important than ever for tax advisers to structure transactions and activities to navigate the evolving landscape of outbound transaction rules.

Knowledge of the ownership thresholds and operating rules that define controlled foreign corporations (CFCs), passive foreign investment companies (PFICs), and other anti-deferral regimes is key to minimizing tax exposures in outbound transactions. Understanding the use of hybrid entities and instruments is also fundamental to effective outbound tax planning.

The IRS has taken significant steps to limit what it considers abuses in foreign tax deferral regimes. Newly proposed regulations promulgated under Sections 367(a) and (d) and Section 385 create potentially costly tax traps for outbound planning. Also, the upcoming “country-by-country” reporting Regulations will enable the IRS to track U.S. outbound activities and intercompany transfer pricing. While the Service is still in the process of crafting these rules, the time for advisers to plan for these prospective changes is now.

Listen as our experienced panel provides a practical guide to the factors involved in outbound tax planning, going beyond the basics and acronyms to help advisers more thoroughly understand the structure of outbound deferral opportunities and challenges.

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Outline

  1. Explanation of Various Structures for Outbound Transactions
    1. New anti-hybrid rules
    2. Amended rules applicable to CFCs (“Controlled Foreign Corporations”) and PFICs (“Passive Foreign Investment Companies”)
    3. Related reporting requirements
  2. How to Structure Outbound Transfers of Intangibles in light of the newly proposed Regulations issued under Section 367(a) and (d)
  3. Planning Traps for the Unwary presented by the new Anti-Inversion Regulations and Proposed Section 385 Regulations
  4. What you need to know about the new U.S. Country-by-Country Reporting Regulations, as well as the evolving international transfer pricing norms being advocated by the OECD in its BEPS initiative

Benefits

The panel will analyze and tackle these and other relevant topics under:

  • What are the ownership thresholds, which can trigger the end of taxdeferral treatment of outbound transactions and structures?
  • What do the new Section 367 rules mean for goodwill, going-concern value, and other intangible assets?
  • What must all international tax planners know about the new U.S. temporary regulations aimed at preventing corporate inversions?
  • What impact could the Proposed Section 385 Regulations have on outbound planning—and specifically loans by U.S. –owned entities?
  • What tax planning and compliance challenges will the new U.S. country-by-country reporting standards have on outbound transactions?

Faculty

Norman, William
William K. Norman, J.D., LL.M. (Taxation)

Partner
Ord & Norman

Mr. Norman practices as a tax lawyer. He limits his practice to international tax planning and compliance for high net...  |  Read More

Pamela A. Fuller, JD, LLM
Pamela A. Fuller, JD, LLM

Gremminger Law Firm

Ms. Fuller has broad experience in federal, state, and international tax planning matters. She counsels foreign and...  |  Read More

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