Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 1 of 1
Full-Text Articles in Law
Federal Income Taxation Of U.S. Branches Of Foreign Corporations: Separate Entity Or Separate Rules?, Fred B. Brown
Federal Income Taxation Of U.S. Branches Of Foreign Corporations: Separate Entity Or Separate Rules?, Fred B. Brown
All Faculty Scholarship
Foreign corporations conduct U.S. business activities either through U.S. subsidiaries or U.S. branches. A U.S. subsidiary of a foreign corporation generally is taxed as any other domestic corporation, that is, as a separate taxable entity apart from its foreign parent. In contrast, a U.S. branch of a foreign corporation is not treated as a separate taxable entity; instead, the Code and regulations employ a set of special rules that allocate and apportion to the U.S. branch a portion of the foreign corporation's income in order to determine the net income subject to U.S. tax.
The rules used for taxing U.S. …