Section 385 Regulations - is your business prepared?
On April 4, 2016, the IRS and Treasury released two sets of proposed and temporary regulations that caused various taxpayers, investment bankers and large sectors of the investment community, particularly in the pharmaceutical and biomed sectors, to sound alarm bells.
Since then, On 14 July 2016, the US Treasury Department held its much anticipated hearing on the controversial proposed earnings stripping regulations. In spite of all the legitimate concerns expressed by the more than a dozen speakers at the hearing and in the written comments, there was no indication of any appetite at Treasury or IRS for any major changes or delays in implementation.
It would appear the Treasury is determined to go ahead with these new regulations. Taxand USA will keep you updated with all the developments in this area.
Access Taxand's other materials on this topic:
- 21 April 2016: Treasury's attempt to clamp down on earnings stripping
- 04 May 2016: Proposed new documentation rules for related-party debt
- 13 June 2016: Proposed regulations on real estate investment structures
- 19 July 2016: Observations from the proposed earnings stripping regulations hearing on 14 July
- 22 July 2016: Is your business prepared?
- 11 October 2016: Ready or not... here they come
- 25 October 2016: Intra-group cross-border interest rules: Final and temporary Section 385 regulations are here!
- 3 November 2016: Non-US Multinationals investing in the US to bear the immediate burden of the new debt rules, under the final 385 Regulations
- 28 November 2016: Potential traps for non-US based multinationals under the new tainted transaction rules of the 385 regulations
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