According to CFC rules, the profits of a foreign entity directly or indirectly owned by a local entity or individual should be declared and taxed in the fiscal year of accrual in the following cases:

• Trusts: When the trust is revocable, when the settlor is also the beneficiary or when the resident individual or entity has full control of the trust
• When the foreign entity is not considered a tax resident of the jurisdiction where it is incorporated
• When:
  • The local individual or entity directly or indirectly owns at least 50 percent of the capital of the foreign entity
  • The foreign entity does not have sufficient structure to carry on its business or when at least 50 percent of the profits of the foreign entity are passive income
  • The taxes paid by the foreign entity in the country where it is incorporated are less than the 25 percent of the income tax that would be payable in Argentina (this requirement is deemed as occurred if the entity is incorporated in a non-cooperative jurisdiction).

Under the controlled foreign company (CFC) rules, a resident entity may be subject to income tax on a current basis on "attributable income" of the entity's controlled foreign companies.

See below under “Controlled Foreign Companies (CFC) and thin capitalization”:

CFC

A CFC-regime (Model B) has been introduced as of January 1, 2019 (assessment year 2020) in compliance with the EU Anti-Tax Avoidance Directive 2016/1164 of July 12, 2016. Belgium switched to the Model A CFC-regime as of assessment year 2025.

Under the entity approach (Model A) member states are required to directly attribute certain predefined categories of passive income to the taxpayer, while under the transactional approach (Model B) member states are only required to directly attribute to the taxpayer the undistributed profit resulting from non-genuine arrangements that have been put in place for the essential purpose of tax avoidance or tax evasion.

The change to the Model A CFC-regime is expected to have a substantial impact in practice.

As a general rule, profits of controlled foreign companies are taxable in Brazil every December 31, regardless of when profits are made available. Optional specific consolidation rules for direct and indirect controlled foreign companies may apply, including relief for foreign losses subject to certain conditions and limitations.

FAPI

Under the foreign accrual property income (FAPI) rules, a Canadian-resident corporation may be subject to tax on a current basis in respect of "passive income" of a controlled foreign affiliate.

OIFP

Under the offshore investment fund property (OIFP) rules, a Canadian-resident corporation may be subject to tax on a prescribed basis in respect of interests in certain non-resident entities.

Under the controlled foreign company (CFC) rules, the passive income received or accrued by foreign controlled entities shall be included in the tax basis of Chilean controllers (proportionally) regardless of the existence of a distribution.

The general anti-avoidance rule (GAAR) of the enterprise income tax law may be cited by the Chinese tax authorities to make adjustments on transactions that do not have reasonable business purposes.

A classic application of the GAAR is in the context of an indirect transfer.  The transfer of shares of an offshore intermediate company that holds significant assets in China may be recharacterized as a direct transfer of the equity in the underlying China operating company if the indirect transfer is found no reasonable business purpose.  It may then give rise to the China capital gain taxes.

CFC

If an offshore company is established in a low-tax jurisdiction (with an effective income tax rate below 12.50 percent) and is "owned or controlled" by Chinese residents (enterprises and/or individuals), the Chinese resident shareholders must include in their taxable income the profits of the offshore company even if the offshore company has not actually distributed any profits without reasonable business needs.

Thin-Capitalization Rule

If the ratio of debt to equity received by an enterprise from related parties exceeds the prescribed limit (currently 2 to 1 for non-financial enterprises and 5 to 1 for financial enterprises), the excess interest expense cannot be deducted for income tax purposes, unless the interest rate is considered arm’s length.

Under Colombian controlled foreign company (CFC) rules, domestic corporations or tax residents in Colombia that hold, directly or indirectly, a share percentage equal or greater to 10 percent of the total equity of the CFC or in its results, shall include in their income tax return the passive income obtained by such  CFC.

A CFC is an entity that:

• Is controlled by a Colombian tax resident, and
• Does not have tax residency in Colombia.

CFC includes corporations, trusts, interest private foundations, investments funds or any other corporation or entity constituted or domiciled abroad, regardless of whether such entity is a legal entity or a disregarded entity for tax purposes.

The Colombian Tax Code sets forth a list of items of income that are considered as passive income. This list includes:

• Dividends, with some exceptions.

• Interests.

• Royalties.

• Sale of assets that generate passive income (such as certain shares or bonds).

• Lease or sale of immovable property.

• Sale of corporate goods provided that certain conditions are met.

• Some services that meet certain requirements.

If a Colombian tax resident includes in its income tax return the passive income obtained by the CFC, the dividends distributed from the CFC will be untaxed in Colombia.

Under general anti-avoidance rules, arrangements can be taxed based on their substance over the chosen form under strict criteria. The applicability of the rules is defined in case law.

Finnish controlled foreign company (CFC) rules state that a Finnish shareholder with a direct or indirect interest equal to at least 25 percent of the equity or voting rights in a foreign legal entity, which has a tax rate below 3/5 of the Finnish rate of tax, is subject to taxation on its proportionate share of the foreign legal entity's profits. CFC legislation does not apply to entities within the European Economic Area (EEA) to the extent the entity has actual substance in that area and practices financial activity there. In addition, CFC legislation does not apply to entities outside the EEA i) which practice financial activity, ii) if the relevant jurisdiction is not included in the blacklist drafted by European Council, iii) if the relevant jurisdiction has an applicable international information exchange treaty with Finland and iv) if the income of the entity in that jurisdiction is derived from industrial or corresponding production, related service rendering, shipping, related sales and marketing activity or intra-group trade with a group company within the same jurisdiction.

CFC rules

If a French company subject to corporate income tax in France has a foreign branch or if it holds, directly or indirectly, an interest (eg, shareholding, voting rights or a share in the profits) of at least 50 percent in any type of structure benefiting from a privileged tax regime in its home country (ie, effective tax paid that is 40-percent lower than the tax that would be paid in France in similar situations), the profits of such a foreign branch, entity or enterprise are subject to corporate income tax in France. Under certain conditions, the shareholding threshold is reduced to 5 percent if more than 50 percent of the foreign entity is held by French companies acting in concert or by entities controlled by the French company.

Low-taxed passive income (ie, tax rate of less than 25 percent; from the year 2024 onwards: 15 percent) earned by a foreign corporation in which at least 1 German shareholder holds qualifying ownership interests (ie, an intermediary company) is imputed pro-rata to the German shareholders and is fully subject to German taxation unless the foreign corporation is based in the EU or EEA and carries out an economic activity with regards to the respective low-taxed passive income therein, in which case a limitation may apply.

There is no controlled foreign corporation (CFC) regime in Hong Kong.

CFC

A CFC is defined as a non-resident company that meets 1 of the following conditions:

A foreign entity is regarded as a CFC if a Hungarian taxpayer, either on its own or together with related entities/persons:

• Holds a direct or indirect participation of more than 50 percent of the voting rights of that entity
• Owns, directly or indirectly, more than 50 percent of the registered capital of that entity or
• Is entitled to receive more than 50 percent of the profits of the foreign entity and
• If the participation or entitlement specified above persists during the majority of the underlying tax year.

The above definition is also applicable in relation to a Hungarian resident taxpayer and its foreign permanent establishment.

The CFC rules apply if the actual corporate tax paid by the foreign entity or permanent establishment (PE) on its profits is less than the difference between the equivalent corporate tax that would have been due in Hungary if the foreign entity or PE had been subject to Hungarian corporate income tax and the corporate income tax actually paid by the foreign entity, if all other tests are also met.

A foreign entity or PE does not qualify as CFC if the income of the foreign entity or PE is derived solely from a transaction - or series of transactions - regarded as genuine.

If the entity attains CFC status, the profit generated by that entity from a transaction, or series of transactions, that is regarded as non-genuine and reduced by the dividends declared will be included in the taxable base of the Hungarian taxpayer to the extent of amounts generated through assets and risks, which are linked to significant people functions carried out by the controlling Hungarian tax resident entity.

Dividends received from a CFC are included in the taxable base of a resident corporate taxpayer.

General anti-avoidance rules

There are several anti-avoidance rules that allow tax authorities to ignore the legal form of an arrangement between entities and examine the actual substance or genuine purpose of a contract or transaction.

The following general anti-avoidance rules are set out in the Hungarian Act on Rules of Taxation:

• A genuine economic activity clause, which is a requirement to carry out transactions of a real economic substance, and
• The prohibition of abuse of law, which is a requirement of proper exercise of the law.

Under the substance-over-clause rule, the tax consequences of transactions or the chain of transactions may be assessed according to their real substance. The general abuse-of-law doctrine examines the goal of a transaction or a chain of transactions. Should the primary goal be the avoidance of taxation or gaining tax advantages, the deductions may be denied.

General anti-avoidance rules under the Hungarian Corporate Tax Act include the following:

• Prohibition of the multiple reduction of the taxable base under the same legal title
• Transactions should make business sense; otherwise, deduction may be denied, and
• Taxpayers should act with due diligence.

Based on the general anti-avoidance rules as set out in the corporate income tax legislation costs, expenditures and losses related to a contract or a transaction are deductible for corporate income tax purposes to the extent that the underlying transaction, or series of transactions, is in line with the purpose of the applicable tax rule and is substantiated by real economic, commercial reasons. If the main purpose or one of the main purposes of the transaction, or series of transactions, is largely to achieve tax advantages contrary to the objective of the applicable tax rules, the costs and losses related to the transaction are not deductible.

India presently has in place certain General Anti-Avoidance Rules (GAAR) or Specific Anti-Avoidance Rules (SAAR) pertaining to anti-avoidance of taxes. GAAR will not apply in an arrangement where the tax benefit in the relevant assessment year does not exceed a sum of INR30million.

Not applicable for this jurisdiction.

Controlled Foreign Company

Under the Israeli controlled foreign company (CFC) rules, the undistributed passive income of certain Non-resident corporations which was taxed at a rate less than 15 percent, will be subject to Israeli tax as if such  passive income were distributed.

Professional Foreign Company

Israel applies the anti-deferral regime of "professional foreign company" and to certain local, closely held  "service companies."

Few Persons Company

Israel also applies anti-deferral rules with respect to a “Few Persons Company,” which generally refers to a company that is controlled by a maximum of five people. Under certain conditions, the following may apply:

• The taxable income which a Few Persons Company derives, may be attributed directly to the Significant Shareholder, rather than to the company (increasing the applicable tax rate from 23% to the applicable personal marginal income tax rate up to 50%), if it was generated through the activities of its Significant Shareholder as an officer or employee or otherwise through the provision of management services to a third party.
• In addition, the undistributed profits (up to 50% in a certain tax year) of a Few Persons Company may be deemed as a dividend distribution if:
  • Such profits were not distributed within 5 years subsequent to end of the year it was incurred;
  • The company has accumulated profits in the amount greater of NIS 5 million;
  • The company can distribute the at least part of the undistributed profits without harming its business activity;
  • The result of the non-distribution is tax avoidance or tax reduction;
  • The deemed distribution will not reduce its accumulated profits from NIS 3 million.

     

     

CFC

Income derived from certain controlled foreign companies (CFC) resident in a country with a privileged tax system is subject to taxation at the level of the Italian resident person under a tax transparency regime, if:

• From 2024, a foreign entity is considered as a CFC for tax purposes if its effective tax rate is lower than 15 percent (simplified ETR test), and 

• More than 1/3 of the controlled company’s revenues are from passive income (eg. dividends, interest, royalties and intercompany revenues as defined by the law).

The new simplified ETR calculation applies only if the financial statement is audited by an authorized local auditor, otherwise the previous ETR calculation would be applied.

The controlling person may avoid the application of the CFC rules by demonstrating, also by filing an advance ruling request, that the controlled company carries on a substantive economic activity supported by staff, equipment, assets and premises. Before issuing a notice of tax deficiency based on the CFC rules, the tax authorities must send a notice to the taxpayer whereby it is given the opportunity to provide evidence of the application of it within 90 days.

The taxpayer must disclose in its corporate income tax return the ownership of shares in non-resident companies that are potentially subject to the CFC rules.

General Anti-Avoidance Rule

Italian tax authorities may disregard any act put in place without a valid economic reason and for the sole purpose of gathering tax advantages otherwise not due.

The CFC Rules are subdivided according to the income tax rates levied on a foreign subsidiary as follows:

• When the tax burden on a foreign subsidiary is 27 percent (lowered from 30 percent under the 2023 tax reform) or higher, the CFC Rules are not applicable. When the tax burden on a foreign subsidiary is between 20 percent and 27 percent, the CFC Rules are applicable to the domestic corporation if the foreign subsidiary falls into any of certain designated categories, such as a shell company, a cash-box company or a company located in blacklisted country or territory.

• When the tax burden on a foreign subsidiary is under 20 percent, the CFC Rules are applicable to the domestic corporation if the foreign subsidiary does not satisfy certain requirements or if it earns passive income, such as income derived from interest, dividends, securities lending, leases of tangible property or excessive profits compared to capital.

Luxembourg has introduced controlled foreign company (CFC) rules in the context of the transposition of the EU Anti-Tax Avoidance Directive 2016/1164 of July 12, 2016 (ATAD). The CFC rules are applicable from January 1, 2019. The CFC rules attribute net income to a Luxembourg taxpayer when its subsidiary or permanent establishment is located in a low-tax or no-tax jurisdiction, even if this income is not distributed. Such income will be subject to CIT at a rate of 17 percent.

A CFC can be either:

• A collective entity in which the Luxembourg taxpayer holds a direct or indirect participation of more than 50 percent or
• A permanent establishment.

CFC rules will be triggered if the tax paid by the CFC is lower than the difference between the CIT that would have been paid on the same profits in Luxembourg and the actual CIT paid in the CFC state.

The CFC rules do not apply to a CFC whose profits do not exceed:

• EUR750,000 or
• 10 percent of its operating costs within the tax period.

If the CFC rules are triggered, the CFC's undistributed income will be taxed in Luxembourg provided that such income arises from non-genuine arrangements that are put in place essentially for the purpose of obtaining a tax advantage.

Mexican residents (and Mexican PEs of foreign residents) are required to pay income tax on income generated from investments in a jurisdiction with a preferential tax regime. For this purpose, an investment in a preferential tax regime is deemed to exist if the foreign entity is subject to an effective tax rate of less than 75 percent of the Mexican corporate tax rate or if the entity or vehicle is deemed to be fiscally transparent.

As a general rule, a Mexican taxpayer is not subject to income tax on earnings of a foreign subsidiary until the income is distributed. However, when the subsidiary or other investment vehicle is located in a preferential tax jurisdiction, such income must be reported as earned on a current basis, subject to certain exceptions.

Taxpayers are subject to tax on earnings from foreign investments that are generated, directly or indirectly, by foreign entities or legal organizations from foreign sources subject to preferential tax regimes in proportion to their participation in the capital of the entities or legal organizations.

For this purpose, income subject to a preferential tax regime is considered to be income not subject to tax outside Mexico or subject to income tax of less than 75 percent of the applicable income tax that would have been calculated and paid in Mexico. The income subject to this anti-deferral regime includes income in the form of cash, goods and services or credit, as well as any presumed income determined by the tax authorities, even in those instances where the income has not been distributed to the Mexican taxpayer.

In addition, these anti-deferral rules are applicable to income generated directly or indirectly through fiscally transparent entities. For this purpose, foreign entities or organizations are deemed to be fiscally transparent when they are not considered income taxpayers in their country of incorporation or they are treated as residents for tax purposes but the income they generate is taxed not in their hands, but at the level of their members.

There are exceptions to these anti-deferral rules when income from business activities is generated and no more than 20 percent of the income is passive income. The following are deemed to constitute passive income for these purposes: interest income, dividends, royalties and gains from the sale of shares, securities or immovable property; income from the leasing of assets; and gratuitous income when such income is not generated through the carrying on of business activities.

Payments to entities resident in countries with privileged tax regime

For the purposes of determining the taxable profit, any amounts paid or due to individuals or corporate entities resident in countries with a clearly more favorable regime is not tax deductible. However, this rule does not apply when the taxable person proves that such amounts relate to transactions that were effectively realized and are not abnormal or exaggerated. This proof must be provided within 30 days after notification to the taxable person.

The IRPC Code establishes that an individual or corporate entity is subject to a clearly more favorable tax regime when, in the respective territory of residence, it is not subject to income tax or, if subject, the effective tax rate applicable is equal to or lower than 60 percent of the IRPC rate (19.2 percent).

CFC

As of January 1, 2019, CFC rules apply to Dutch corporate taxpayers holding a direct or indirect subsidiary or a permanent establishment that is established in a jurisdiction that is included on:

• A yearly published Dutch blacklist (ie, jurisdictions with a statutory corporate tax rate less than 9 percent) or
• The European list of non-cooperative jurisdictions.

The CFC rules only apply to direct or indirect subsidiaries if the Dutch shareholder, alone or together with an associated enterprise or person, holds an equity interest of more than 50 percent in the subsidiary. Certain exceptions may apply, including where the subsidiary or permanent establishment has “real economic activities.”

Under the CFC rules, certain categories of undistributed (passive) income of such CFCs are included in the corporate tax base of the Dutch corporate taxpayer.

In addition to these CFC rules, a shareholding of 25 percent or more in a low-taxed portfolio investment with greater or equal to 90-percent ”bad assets” should be revalued annually at the fair market value.

General ANTI-avoidance rule

Wholly artificial constructions which are not in line with the purpose and scope of the law, resulting in a lower taxation, may be restricted under the general anti-avoidance rule.

The CFC rules states, if Norwegian resident taxpayers hold or control at least 50 percent of the shares or equity in certain "low taxed" foreign entities, the Norwegian resident taxpayers will be subject to taxation on a current basis for its proportionate share of the foreign entity's profits. A foreign legal entity is considered "low taxed" if the entity is subject to less than 2/3 of the Norwegian tax on the same income (ie, generally 14.67 percent in 2023).

The CFC rules does not apply if Norway has entered into a tax treaty with the relevant country and the income is not of a mainly passive nature. The same applies to entities resident in EEA-countries, provided that real business activities are carried out in the relevant jurisdiction.

Over the last several years, Peru has focused on implementing BEPS recommendations. So far, Peru has implemented CFC rules, which came into force in 2013. CFC rules apply to Peruvian residents who control non-domiciled entities that, according to the law, qualify as CFCs in terms of their passive income.

Under the CFC rules, a domestic corporation may be subject to tax at the rate of 19 percent on the income of a foreign-controlled entity if certain criteria apply. This includes where the ownership of the foreign entity is at least 50 percent, the so-called passive income of the foreign entity is 33 percent or more, and the effective rate of taxation of income of the foreign entity is below a certain level.

Profits or income derived by an entity resident in a blacklisted jurisdiction or in a jurisdiction where it is subject to an effective tax rate lower than 50 percent of the tax that would be paid according to the Portuguese CIT rules are imputed to the Portuguese taxpayer, provided it holds, directly, indirectly or constructively, at least 25 percent of the share capital, voting rights or rights to income or assets of that entity.

CFC rules also apply if the controlled entity is held by a Portuguese entity through a legal representative, fiduciary or intermediary.

CFC rules do not apply if the CFC is resident in another EU country or in an EEA member state (bound to administrative cooperation on tax matters), provided that there are valid economic reasons underlying the incorporation and running of such company and it carries out agricultural, commercial, industrial or services activities supported by staff, equipment, assets and premises.

CFC

Under the controlled foreign corporation (CFC) rules, a Romanian tax resident shall include in its taxable basis the non-distributed revenues of an entity or a permanent establishment that qualifies as a CFC, proportionally to the taxpayers' participation in said CFC.

Exit taxation rules

Under the exit taxation rules, corporate tax resident involved in transfers of assets to or from the head office or a permanent establishment for which Romania loses the taxation right is liable to pay standard corporate income tax on the difference between the market value and the fiscal value of those assets.

General Anti - Abuse Rules (GAARs)

Under the GAAR, non-genuine arrangements or series of arrangements, meaning those that do not have valid commercial reasons that reflect economic reality, carried out for the main purpose of obtaining a tax advantage, will be disallowed by the tax authorities when computing the fiscal result of a taxpayer.

CFC

A CFC shall be a foreign organization, in which so-called "controlling persons" are Russian entities and/or individuals recognized as tax residents of the Russian Federation.

A CFC for Russian tax purposes also includes an unincorporated foreign structure (such as a fund, partnership, trust and similar entities) whose controlling persons are organizations and/or individuals who are recognized as tax residents of the Russian Federation.

Such a Russian resident (both an organization or individual) must include in its taxable income the profits of the foreign company treated as a CFC (subject to certain exemptions) even if the foreign company has not actually distributed any profits.

Taxpayers who are recognized as tax residents of the Russian Federation must serve notifications of their participation interest in both:

• Foreign organizations and unincorporated structures and
• All CFCs in which they are recognized to be controlling persons.

Notification on the CFC shall be served not later than March 20 of the year following the tax period in which the relevant share of profit in the hands of the controlling person shall be declared.

Russian tax residents owning foreign subsidiaries through a foreign public company are generally not subject to the Russian CFC taxation of foreign profits, provided that 2 conditions are met: (i) more than 25 percent of its the foreign company are publicly traded on a foreign stock exchange in an OECD member state that is not "blacklisted" by the Russian Federal Tax Service and (ii) the Russian tax resident investor directly or indirectly owns 50 percent or less in such a publicly traded company.

Thin-capitalization rule

Interest charged under a controlled debt (generally, a loan granted to a Russian organization by a related party) will be fully or partially reclassified as dividends for tax purposes if the amount of controlled debt exceeds the net assets by more than 3 times (12.5 times for banks and leasing companies). A sister company debt is also captured by the controlled debt concept. If the taxpayer has negative net assets, the whole amount of interest will be treated as dividends for taxation purposes (ie, they will be non-deductible and subject to withholding tax).

Foreign debts are not subject to Russian thin capitalization rules if all the following conditions are met:

• Debt received is used exclusively to finance the Russian debtor’s investment project in Russia. An investment project is defined as development of Russian manufacturing facilities for the production of goods and/or provision of services newly commissioned after January 1, 2019.
• The debt is long-term and anticipates repayment not earlier than after 5 years from the grant.
• The cumulative share of direct and indirect foreign participation in the Russian debtor’s entity owned by the qualifying participant does not exceed 35 percent.
• The foreign creditor is a registered and is tax resident in a tax treaty country with Russia.

Singapore does not have controlled foreign corporation (CFC) provisions, although the general anti-avoidance rules may apply.

SA has complicated CFC legislation. The aim of this legislation is now not only to prevent the avoidance of taxation on investment income, but also to prevent the avoidance of taxation on all foreign income and capital gains earned by a CFC. Where residents of SA hold more than 50 percent of the participation rights in a foreign company which is nonresident, the resident must include a proportional ownership percentage of the net income earned by the foreign company in their income, subject to various exclusions.

Not applicable for this jurisdiction.

Generally, CFC rules apply when a controlled entity resident outside of the EU is subject to a tax rate below 75 percent of the effective Spanish Corporate Income Tax rate and obtains certain passive income, which shall be allocated to the Spanish controlling entity.

The controlled foreign corporation (CFC) rules state that a Swedish shareholder with a direct or indirect interest equal to at least 25 percent of the equity or voting rights in certain low-taxed foreign legal entities is subject to immediate taxation on its proportionate share of the foreign legal entity's profits. Per 2024 law, a foreign company is considered low-taxed if its income is taxed at a rate below 11.33 percent, calculated under Swedish rules.

Shareholders in companies that are resident in approved countries are, however, not subject to CFC taxation. Approved countries are included in a white list, which is part of the Swedish Income Tax Act.

Switzerland does not have anti-deferral rules such as controlled foreign corporation (CFC) rules. Note, however, that under recent Swiss court decisions, passive companies located in offshore jurisdictions have been treated as Swiss tax resident, resulting in taxation in Switzerland similar to CFC taxation.

On July 12, 2016, the Taiwan government amended the Income Tax Act and introduced the controlled foreign company (CFC) and the criteria for determining a foreign company’s place of effective management (PEM) rules. Subject to certain conditions of the CFC rules, profits retained by controlled foreign companies in offshore low-taxed jurisdictions might be attributed to the tax base of the controlling Taiwanese entities since January 1, 2023. However, the effective date of the new PEM rules has not been announced by the Taiwan government.

Under the Turkish Controlled Foreign Company (CFC) rules, taxes paid by a foreign affiliate (such as income tax and corporate tax) may be set off against the taxation of the nonresident company's earnings.

CFC

Not applicable for this jurisdiction.

PFIC

Not applicable for this jurisdiction.

Not applicable for this jurisdiction.

Under the UK controlled foreign company (CFC) rules, a UK resident company may be taxed on the income of its foreign subsidiary. The scope of these rules is intended to be limited to situations where UK-source income has been artificially diverted into an overseas, low tax jurisdiction, particularly tax havens.

CFC

Under the controlled foreign corporation (CFC) rules, a domestic corporation may be subject to tax on a current basis on Subpart F income of a foreign subsidiary. A domestic corporation may also be subject to tax on a current basis on the GILTI income of a foreign subsidiary.

PFIC

Under the passive foreign investment company (PFIC) rules, a foreign corporation may be treated as a PFIC if the percentage of its gross income or assets that are treated as passive exceeds certain thresholds. A shareholder of a PFIC may be subject to current US tax and other unfavorable tax consequences on gain from the sale of PFIC stock and on certain distributions from a PFIC.

Not applicable for this jurisdiction.