Articles

Volume 37 Number 5 Friday, May 9, 2008

New Temporary Regulations Under §905(c): A Big Improvement But Puzzling Issues Still Remain by Caren Shein, Esq. and Kristine Schlaman, Esq.* KPMG LLP Washington, D.C. Section 901 of the Internal Revenue Code allows a U.S. person to claim a foreign tax credit, subject to certain limitations under §904, for creditable foreign taxes that it pays or accrues. In addition, if certain ownership requirements are satisfied, a U.S. corporation may claim a foreign tax credit for taxes paid or accrued by a foreign subsidiary and deemed to be paid or accrued by the U.S. corporation when it receives a dividend or includes an amount in gross income under Subpart F.1

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Tax Concepts Affecting the Foreign Entertainer or Athlete Performing in the United States by Stanley C. Ruchelman, Esq.* The Ruchelman Law Firm New York, New York and Ian Shane, Esq.** Golenbock Eiseman Assor Bell & Peskoe L.L.P. New York, New York On August 2, 2007, the IRS and the Treasury issued a comprehensive report entitled “Reducing the Federal Tax Gap: A Report on Improving Voluntary Compliance.” The report included a recommendation to initiate a project on foreign (i.e., nonresident alien) entertainers and athletes to ensure appropriate reporting and sourcing of income as part of a program to address cross-border compliance risks.

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MEXICO-U.S. INVESTMENT: Mexican Tax Perspective

Recent Developments with Respect to Mexican VAT on Imports by Ricardo González Orta and Mauricio Martínez D'Meza Deloitte Touche Tohmatsu, Mexico Mexico has a long history of grappling with value-added tax (VAT) issues. Since its inception in the late 1970s, the Mexican VAT system has given rise to a number of difficulties, ranging from the niceties of the difference between zero-rated and exempt transactions, to the complexities of VAT's relationship with other taxes, such as income tax and import duties.

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