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The domestic international sales corporation is a concept unique to tax law in the United States. In 1971, the U.S. Congress voted to use U.S. tax law to subsidize exports of U.S.-made goods. The initial mechanism was through a Domestic International Sales Corporation (DISC), an entity with no substance which received tax benefits.
This tax applies to a "dividend equivalent amount," which is the corporation's effectively connected earnings and profits for the year, less investments the corporation makes in its U.S. assets (money and adjusted bases of property connected with the conduct of a U.S. trade or business). The tax is imposed even if there is no distribution.
A corporate tax, also called corporation tax or company tax, is a type of direct tax levied on the income or capital of corporations and other similar legal entities. The tax is usually imposed at the national level, but it may also be imposed at state or local levels in some countries.
The tax treatment of the conversion to a corporation of a foreign eligible entity treated as a disregarded entity would be consistent with current Treasury regulations and relevant tax principles. The proposal was eventually dropped again due to criticism from businesses, and it was not included again in the 2011 budget proposal either.
Court Holding Co., 324 U.S. 331 (1945) the Supreme Court affirmed the tax court's treatment of a liquidating dividend and sale by shareholder as a sale of the corporation. [7] In Kimbell-Diamond Milling Co. v. Commissioner, 14 T.C. 74 (1950), the purchase of a corporation and subsequent liquidation were disregarded and treated as purchase of ...
The CFC provisions in Germany (§§ 7-14 AStG, Foreign Tax Act) apply to both individual and corporate shareholders of a controlled foreign company. [22] Such shareholders must include in their currently taxable income as a deemed dividend their share of passive income if two tests are met:
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However, the shareholder may avoid >100% tax by periodically selling and repurchasing his holdings, using the after-tax proceeds to repurchase shares. Shareholders of a PFIC (including a QEF) are eligible for foreign tax credit with respect to the current and deemed prior year taxes, including the deemed paid credit for 10% corporate ...