A foreign controlled foreign corporation is defined and guidance is required
What the document says“the term `foreign controlled foreign corporation' means a foreign corporation, other than a controlled foreign corporation, which would be a controlled foreign corporation if section 957(a) were applied--”
The section defines a foreign controlled foreign corporation as a foreign corporation, other than a controlled foreign corporation, that would be one if section 957(a) were read as naming foreign controlled United States shareholders in place of United States shareholders and section 958(b) other than paragraph (4) in place of section 958(b). The Secretary must issue guidance to carry the section out, including on treating these persons and corporations as United States shareholders and controlled foreign corporations for other purposes of the title, and on foreign controlled foreign corporations that are passive foreign investment companies.
What the document actually says“the term `foreign controlled foreign corporation' means a foreign corporation, other than a controlled foreign corporation, which would be a controlled foreign corporation if section 957(a) were applied--”
The term covers a foreign firm that is not already a controlled foreign firm. It must meet the tests that follow.
The tests swap in the new shareholder term. They also ignore the new bar. The Secretary must write rules to make it work.
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