Finalized foreign tax credit ‘generator’ regulations add withholding taxes

September 2013

Overview

The Treasury Department and IRS have finalized (2013 final regulations) temporary and proposed regulations issued in 2011 (2011 temporary regulations). The 2011 temporary regulations appeared alongside a set of final regulations (2011 final regulations) intended to address certain types of foreign tax credit (FTC) generator arrangements. The 2011 temporary regulations added a provision to deal with certain situations involving withholding taxes on distributions with respect to an entity covered by the 2011 final regulations.

Observation: Both the 2011 and 2013 final regulations address highly structured FTC generator transactions. Thus, the specific technical details of these regulations may not immediately concern companies that did not undertake such planning.

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Doug McHoney
Co-leader, US Integrated Global Structuring team
Tel: +1 (312) 298 2527
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Calum Dewar
Co-leader, US Integrated Global Structuring team
Tel: +1 (646) 471 5254
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