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United States - A Better Mouse Trap: IRS Finalizes Regulations Treating Disregarded Entities as Persons for Purposes of Conduit Financing Regulations

United States
P. Carman
Derivatives & Financial Instruments, 2012 (Volume 14), No 1
12 January 2012
To avoid potential structuring to circumvent the US conduit financing rules, on 9 December 2011, the US Internal Revenue Service finalized regulations that treat disregarded entities as persons for purposes of the US conduit financing regulations. This means that all business entities within a financing structure will need to be tested under the conduit financing regulations if a portion of the financing structure relies upon the US treaty network or US domestic exceptions to obtain a reduction of withholding on payments of interest.
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