8-24
248 8-25
249 8-26
250 8-27
251 8-28
252 8-29
253 Glossary 1
254 Glossary 2
255 Glossary 3
256 Glossary 4
257 Glossary 5
258 Glossary 6
259 Glossary 7
260 Index 1
261 Index 2
262 Index 3
263 Solution 1
264 Solution 2
265 Solution 3
266 Solution 4
267 Solution 5
268 Solution 6
269 Solution 7
270 Solution 8
271 Solution 9
272 Solution 10
273 Solution 11
274 Solution 12
275 Solution 13
Notice to readers
International Taxation is intended solely for use in continuing professional education and not as a reference. It does not represent an official position of the American Institute of Certified Public Accountants, and it is distributed with the understanding that the author and publisher are not rendering legal, accounting, or other professional services in the publication. This course is intended to be an overview of the topics discussed within, and the author has made every attempt to verify the completeness and accuracy of the information herein. However, neither the author nor publisher can guarantee the applicability of the information found herein. If legal advice or other expert assistance is required, the services of a competent professional should be sought.
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ISBN 978-1-11975-649-1 (Paper)
ISBN 978-1-11975-751-1 (ePDF)
ISBN 978-1-11975-750-4 (ePub)
ISBN 978-1-11975-752-8 (oBook)
Course Code: 732015
ITTF GS-0419-0A
Revised: May 2019
Chapter 1 Overview of U.S. Corporate International Taxation
Learning objectives
Recognize the comprehensive system of outbound (core) and inbound U.S. international taxation laws.
Recognize the concepts of timing for income recognition.
Identify the international tax provisions of the Tax Cuts and Jobs Act (TCJA) signed in December 2017.
Recognize U.S. federal income tax benefits for U.S. exporters of U.S. property under the interest charge domestic international sales corporations (IC-DISC) regime.
Summary
This course will cover the fundamentals of U.S. corporate international taxation, with a primary focus on “outbound concepts” and technical tax issues. This course has been updated to cover the fundamental international tax provisions within the TCJA, including for international tax Treasury Regulations and Notices released through March 2019.
In general, the United States taxes U.S. persons on their worldwide income. The United States may grant the functional equivalent of an exclusion through a foreign tax credit or tax deduction. For example, under Section 936, a domestic corporation may offset hypothetical U.S. taxes on certain income connected with U.S. possessions against U.S. taxes that otherwise would be due.
Section 7701(b) contains methodical rules to define when an alien is a U.S. resident. Mere presence in the United States for 183 days in a taxable year may subject an alien to taxation on worldwide income for that year. In general, a domestic corporation, which is subject to U.S. taxation on worldwide income, is a corporation incorporated in the United States. In certain narrow cases, however, the Internal Revenue Code (IRC) may treat a foreign corporation as domestic or treat a branch of a domestic corporation as foreign.
In general, a U.S. person that incurs foreign losses may deduct those losses for U.S. tax purposes. However, the deduction of a dual consolidated loss may be limited. Further, recapture rules may trigger income in a taxable year after a foreign loss.
Because the United States generally taxes U.S. citizens and residents on worldwide income, the issue of double taxation may arise when such a person has income from foreign countries or U.S. possessions. To reduce the problem, the United States generally grants a foreign tax credit for income taxes paid to foreign countries and U.S. possessions. Section 904 contains complex rules regarding the foreign tax credit, and its limitations may severely limit the actual use of the credits.
The
