IRS Issues Guidance For Determining Foreign Co. Ownership

Law360, New York (January 16, 2014, 6:35 PM EST) -- The Internal Revenue Service on Thursday released temporary regulations identifying types of foreign corporation stock that should be disregarded when calculating the corporation's ownership to determine if it is a surrogate foreign corporation.

Surrogate foreign corporations are foreign companies that acquire U.S. companies but fail to maintain substantial business activities in their home countries and use the setup to obtain preferential tax treatment. At least 60 percent of a surrogate foreign corporation's stock must be owned by the domestic corporation's former shareholders, according to the IRS....
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