• Final Regulations Issued on Determining Amount of Tax Paid for Foreign Tax Credit Purposes in onnection with Structured Passive Investment Arrangements
  • August 5, 2011 | Authors: Matthew R. Servies; John K. Sweet; John C. Taylor
  • Law Firms: King & Spalding LLP - Atlanta Office ; King & Spalding LLP - New York Office ; King & Spalding LLP - London Office
  • On Wednesday, July 13, the Internal Revenue Service issued final regulations (T.D. 9535) under section 901 addressing the creditability of foreign taxes paid or accrued in connection with a structured passive investment arrangement (SPIA). According to the IRS, a SPIA is intentionally structured to create a foreign tax liability, when the purported underlying business transaction generally would have resulted in significantly less, or even no, foreign taxes. The regulations classify foreign taxes paid in connection with a SPIA as noncompulsory, and therefore non-creditable, taxes.