11 November 2016 A New Splitter: Expanding the Foreign Tax Credit Splitter rules (BNA) James Tobin, a partner with EY's International Tax Services group, recently authored an article published in BNA's Tax Management International Journal discussing Notice 2016-52, which expands the Foreign Tax Credit Splitter rules with respect to foreign initiated audit adjustments. According to the article, final regulations under the so-called anti-splitter rules of Section 909 were issued in 2015. The statute defers the ability of a taxpayer to claim a foreign tax credit until the related income associated with the foreign tax is included in income in the United States. The author further notes that the Section 909 regulations limited the application of the anti-splitter rules to four specific situations: (i) reverse hybrid splitters, (ii) loss sharing splitters, (iii) hybrid instrument splitters, and (iv) partnership inter-branch splitters. The latest notice, however, adds a fifth one — foreign initiated adjustment splitters. The article, published in the November 11, 2016, edition of Tax Management International Journal, is attached below. Document ID: 2016-1933 |
