Avoiding CFC Status
Under U.S. tax rules, a foreign entity may be classified for U.S. tax purposes as a corporation or a flow-through entity somewhat independently of its classification for foreign purposes. Under these "check the box" rules, shareholders may be able to elect to treat their shares income, deductions, and taxes of a foreign corporation as earned and paid by themselves. This permits U.S. individuals to obtain credits for foreign taxes paid by entities they own, which credits might otherwise not be available.
Artificial arrangements to avoid CFC status may be ignored in some jurisdictions under legislative provisions or court developed law, such as substance over form doctrines.
European civil law may provide opportunities for formalistic agreements whereby practical control is maintained but formal definitions of control are not met.
Read more about this topic: Controlled Foreign Corporation
Famous quotes containing the words avoiding and/or status:
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—Norman Mailer (b. 1923)
“What is clear is that Christianity directed increased attention to childhood. For the first time in history it seemed important to decide what the moral status of children was. In the midst of this sometimes excessive concern, a new sympathy for children was promoted. Sometimes this meant criticizing adults. . . . So far as parents were put on the defensive in this way, the beginning of the Christian era marks a revolution in the child’s status.”
—C. John Sommerville (20th century)