Practical International Tax for the Non-Specialist #3: Anti-deferral overview – Subpart F and CFCs.

As a boutique international tax firm, we’re finding international tax issues arising for individuals and companies of all sizes. Many of them never thought they’d have any cross-border activities. As many of our clients are CPA and law firm across the US, we thought it might be helpful to do a series of discussions on International Tax for the Non-Specialist. They are overviews designed to assist practitioners identify issues. The overview dive into some level of detail, but we envision separate sessions to more fully explain various technicalities.

This discussion is #3 in the series following: #1 on tax residency and foreign financial account disclosures [FBAR / FinCen 114 / Form 8938]. #2 on earning foreign income and an employee being transferred to a foreign affiliate).

The primary focus on this presentation is an overview of the US anti-deferral rules. This includes, but is not limited to:

1. Discussion of international tax vs. domestic tax.
2. What is Subpart F?
   1. Where is it in the Code?
   2. Who and how does it tax?
   3. Why was it implemented?
3. What is a US Shareholder?
4. What is a controlled foreign corporation (CFC) and examples to determine?
5. TCJA of 2017 changes.
6. What types of activities, income and investments does Subpart F reach?
7. Constructive ownership. 

Course Key Concept: International tax, Subpart F, Controlled foreign corporation, CFC, Anti-deferral, Section 951, Section 957, Constructive, ownership, attribution, Deemed dividend, TCJA, US person, E&P, Earnings and profits, Foreign base company income.