ARLINGTON, Va., March 12, 2012 /PRNewswire-USNewswire/ -- A new Bloomberg BNA webinar will provide an overview of the subpart F foreign base company sales income rules, including a description of the general rule and the types of transactions to which it applies, followed by a discussion of the various exceptions to the rule, on March 22, 2012. Subpart F Foreign Base Company Sales Income Rules will then focus on deferral planning through contract manufacturing arrangements, including the "substantial contribution test" and the "branch" rules.
This 90-minute webinar will include:
I. Overview of different types of manufacturing arrangements:
- Buy/sell or contracting manufacturing
- Toll/consignment manufacturing
II. Overview of section 954(d)
- Manufacturing exception
- Same-country manufacture exception
- Product sold for use in the CFC's country of organization exception
- Branch rule
III. Detailed discussion of substantial contribution test:
- Activities considered, e.g., quality control
- Through the CFC's own "employees"
- Employees on payroll of a related company?
IV. Practical issues:
- How should companies substantiate their compliance with the regulations, especially in light of their relatively young vintage/no audit history:
- Documentation, e.g., visits to contract manufacturers, follow-up reports, interviews with employees, logs, etc.
- Tension between ensuring sufficient activities to satisfy the substantial contribution test and avoiding a permanent establishment in the country of the contract manufacturer
- Use of a tax treaty jurisdiction with a favorable PE article whenever possible
V. Related branch rule issues:
- Discussion of basic branch rule:
- Sales branch
- Manufacturing branch
- December 2011 finalization of branch rule regulations
- Multiple branches and/or remainder of CFC involved in manufacturing
Attendees will gain an in-depth understanding of the subpart F foreign base company sales income ("FBCSI")/section 954(d) rules, including:
- A general overview of subpart F foreign base company income—transactions in which it may arise
- The exceptions to FBCSI
- How the rules apply to contract manufacturing arrangements
- Practical aspects
About the Speakers
Rafic Barrage is a tax partner in the Washington, DC office of Mayer Brown, where his tax practice is concentrated in the area of international tax issues of U.S. corporations operating overseas and foreign corporations and individuals operating and investing in the United States, including planning, structuring/restructuring, tax examinations, appeals, litigation, regulations, rulings, and legislative work. His practice involves structuring, restructuring, deferral/subpart F, foreign tax credit, source of income, tax treaties, trade or business/permanent establishment, withholding tax, and other issues.
Rafic has spoken and written on a wide variety of U.S. international tax issues, including for the Organization for International Investment, the Tax Executives Institute, and ATLAS (the Alliance for Tax, Legal & Accounting Seminars). Prior to joining Mayer Brown, Rafic was an associate with a large, international law firm in Washington, DC, and prior to that, a senior associate in the International Tax Services group of Deloitte & Touche, LLP, in New York.
Subpart F Foreign Base Company Sales Income Rules takes place March 14, 2012, from 12:30 PM – 2:00 PM, (ET). To register for this webinar and obtain further information about CLE and CPE credits, go to http://www.bna.com/overview-subpart-foreign-w12884907981/ or (in the U.S.) call 800.372.1033, menu Option 6, then Option 1. The per site fee is $249.
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