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February 27, 2023

IRS Chief Counsel issues memorandum on the character of US depository receipts

In a Chief Counsel memorandum (AM 2023-001), the IRS has advised that payments from a US depository institution to a foreign corporation, either (1) for expenses the corporation incurs to institute a sponsored American Depositary Receipts program with holders in the United States and abroad or (2) under a revenue-sharing arrangement, both represent consideration for the US depository institution's exclusive right to establish, control and exploit the trading of the foreign corporation's American Depositary Receipts in the United States.

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor