On February 13, 2018, the Treasury Department and the Internal Revenue Service issued Rev. Proc. 2018-17, which provides modifications to the procedures for changing the accounting period of foreign corporations owned by U.S. shareholders that are subject to the transition tax under the Tax Cuts and Jobs Act. Rev. Proc. 2018-17 basically disallows the accounting period change if such change could result in the avoidance, reduction, or delay of the transition tax. (more…)
Are Foreign Corporations Doing Business in the United States Required to File a US Tax Return?
You may be surprised by the answer, especially, if you don’t have an office in the United States. A foreign corporation is obligated to file a US tax return (Form 1120-F) if it is “engaged in a trade or business” in the United States, 1) even if it has no income effectively connected with its US business, 2) has no income from US sources, and/or 3) is exempt under the US tax treaty. Definition of “engaged in trade or business” is mostly driven by…