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International – Transfer Pricing

International Tax ADVISORY: Treasury Issues New Final and Proposed Regulations on Dividend Equivalent Transactions

On December 4, 2013, the U.S. Treasury issued final and proposed regulations under Section 871(m) of the Code. The final rules extend the current definition of “notional principal contracts” (NPCs) to payments made before January 1, 2016, while the proposed regulations introduce rules that may modify the scope and application of Section 871(m)’s resourcing rule for “dividend equivalent” payments.

Also, in Chief Counsel Advice 201349015 (CCA), released December 6, 2013, the IRS advised on the proper reporting of U.S. taxable income and the proper standard for determining the “compulsory amount” of creditable foreign taxes imposed on transactions between a U.S. corporation and its foreign disregarded entity (DRE) or branch.  

The full alert is provided on the Alston & Bird website: www.alston.com/advisories/int-tax-adv-dec-2013   

Written by Edward Tanenbaum, Partner, Federal & International Tax | Alston & Bird LLP

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