Base Erosion and Anti-Abuse Tax; Correcting Amendment
| Published date | 19 February 2020 |
| Record Number | 2020-02652 |
| Section | Rules and Regulations |
| Court | Internal Revenue Service |
Federal Register, Volume 85 Issue 33 (Wednesday, February 19, 2020)
[Federal Register Volume 85, Number 33 (Wednesday, February 19, 2020)]
[Rules and Regulations]
[Pages 9369-9370]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-02652]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9885]
RIN 1545-BO56
Base Erosion and Anti-Abuse Tax; Correcting Amendment
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Correcting amendments.
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SUMMARY: This document contains corrections to Treasury Decision 9885,
which was published in the Federal
[[Page 9370]]
Register on Friday, December 6, 2019. Treasury Decision 9885
implementing the base erosion and anti-abuse tax, designed to prevent
the reduction of tax liability by certain large corporate taxpayers
through certain payments made to foreign related parties and certain
tax credits.
DATES: Effective date. This correction is effective on February 19,
2020 and is applicable on December 6, 2019.
FOR FURTHER INFORMATION CONTACT: Concerning Sec. 1.59A-9, Azeka J.
Abramoff, Sheila Ramaswamy, or Karen Walny at (202) 317-6938;
concerning Sec. 1.6038A-2, Brad McCormack or Anand Desai at (202) 317-
6939 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
The final regulations (TD 9885) that are the subject of this
correction are under sections 59A and 6038A of the Internal Revenue
Code.
Need for Correction
As published December 6, 2019 (84 FR 66968), the final regulations
(TD 9885; FR Doc. 2019-25744) contained errors that may prove
misleading and therefore need to be corrected.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Correction of Publication
Accordingly, 26 CFR part 1 is corrected by making the following
correcting amendments:
PART 1--INCOME TAXES
0
Paragraph 1. The authority citation for part 1 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
0
Par. 2. Section 1.59A-9 is amended by revising the text of paragraphs
(b)(1) and (c)(2)(ii) and the first sentence of paragraph (c)(5)(ii) to
read as follows:
Sec. 1.59A-9 Anti-abuse and recharacterization rules.
* * * * *
(b) * * *
(1) * * * If a taxpayer pays or accrues an amount to one or more
intermediaries (including an intermediary unrelated to the taxpayer)
that would have been a base erosion payment if paid or accrued to a
foreign related party, and one or more of the intermediaries makes
(directly or indirectly) corresponding payments to or for the benefit
of a foreign related party as part of a transaction (or series of
transactions), plan or arrangement that has as a principal purpose of
avoiding a base erosion payment (or reducing the amount of a base
erosion payment), the role of the intermediary or intermediaries is
disregarded as a conduit, or the amount paid or accrued to the
intermediary is treated as a base erosion payment, as appropriate.
* * * * *
(c) * * *
(2) * * *
(ii) * * * The arrangement between FP, DC, and Corp A is deemed to
result in a $95x base erosion payment under paragraph (b)(1) of this
section because DC's payment to Corp A would have been a base erosion
payment if paid to a foreign related party, and Corp A makes a
corresponding payment to FP as part of the series of transactions that
has as a principal purpose of avoiding a base erosion payment.
* * * * *
(5) * * *
(ii) * * * The transactions between FP, DC, and Bank are deemed to
result in a base erosion payment under paragraph (b)(1) of this section
because DC's payment to Bank would have been a base erosion payment if
paid to a foreign related party, and Bank makes a corresponding payment
to FP as part of the series of transactions that has as a principal
purpose of avoiding a base erosion payment.* * *
* * * * *
0
Par. 3. Section 1.6038A-2(g) is amended by revising the third sentence
to read as follows:
Sec. 1.6038A-2 Requirement of return.
* * * * *
(g) * * * Paragraph (b)(7)(ix) of this section applies to taxable
years beginning on or after June 7, 2021. * * *
Martin V. Franks,
Chief, Publications and Regulations Branch, Legal Processing Division,
Associate Chief Counsel, (Procedure and Administration).
[FR Doc. 2020-02652 Filed 2-18-20; 8:45 am]
BILLING CODE 4830-01-P
