Saturday, April 23, 2016

IRS removes Cuba from list of countries with foreign tax restrictions

IRS removes Cuba from list of countries with foreign tax restrictions
The IRS has removed Cuba from the so-called “IRC §901 blacklist” of foreign countries from which US taxpayers may not be entitled to a foreign tax credit. Removal of Cuba from this list means that US taxpayers are now entitled to the benefit of a foreign tax credit to any income attributable to Cuba. Income earned in Cuba through a controlled foreign corporation will no longer be Subpart F income barred from deferral treatment under IRC §952(a)(5).

The restrictions are lifted as of December 21, 2015, based upon certification by the Secretary of State that Cuba is no longer a country described in IRC §901(j)(2)(A). That section applies to any country with whom the US does not maintain diplomatic relations or that is designated by the State Department as a country that supports international terrorism.

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