On October 13, 2016, the US Treasury Department
("Treasury") and the Internal Revenue Service
("IRS") issued final and temporary regulations (the
"Final Regulations") under section 385 of the Internal
Revenue Code as the follow-up to the proposed regulations (the
"Proposed Regulations") issued on April 4. The Proposed
Regulations had the potential to produce far-reaching effects on US
and foreign companies, overturning the long-standing treatment of
certain intercompany debt arrangements and subjecting them to the
risk of an equity recharacterization for US tax purposes.
These Final Regulations generally maintain the overall theme of
the Proposed Regulations. However, the Final Regulations provide
some welcome limitations to the scope of those rules as well as
certain exceptions and clarifications that mitigate some of the
concerns identified with the Proposed Regulations.
This legal update provides a brief summary of the most
significant changes included in the Final Regulations.
Mayer Brown is a global legal services provider
comprising legal practices that are separate entities (the
"Mayer Brown Practices"). The Mayer Brown Practices are:
Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both
limited liability partnerships established in Illinois USA; Mayer
Brown International LLP, a limited liability partnership
incorporated in England and Wales (authorized and regulated by the
Solicitors Regulation Authority and registered in England and Wales
number OC 303359); Mayer Brown, a SELAS established in France;
Mayer Brown JSM, a Hong Kong partnership and its associated
entities in Asia; and Tauil & Chequer Advogados, a Brazilian
law partnership with which Mayer Brown is associated. "Mayer
Brown" and the Mayer Brown logo are the trademarks of the
Mayer Brown Practices in their respective
Mayer Brown article provides information and comments on legal
issues and developments of interest. The foregoing is not a
comprehensive treatment of the subject matter covered and is not
intended to provide legal advice. Readers should seek specific
legal advice before taking any action with respect to the matters
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
It is widely expected that Congress will address tax reform early in its 2017 session. This alert summarizes President-Elect Trump's proposal and Speaker of the House Paul Ryan's proposal on key corporate tax provisions . . .
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).