IRS applies manufacturing exception to branch of CFC deriving income from procurement activity

August 2013

Overview

In PLR 201332007, the IRS addressed the application of the manufacturing exception to a CFC’s branch. The PLR concludes that the branch’s income derived in connection with the purchase of property on behalf of a related person is not foreign base company sales income because the branch makes a substantial contribution to the manufacture of the products sold.

Overview

In PLR 201332007, the IRS addressed the application of the manufacturing exception to a CFC’s branch. The PLR concludes that the branch’s income derived in connection with the purchase of property on behalf of a related person is not foreign base company sales income because the branch makes a substantial contribution to the manufacture of the products sold.

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