Page 19 - International Taxation IRS Training Guides

Outbound - Deferral Planning

 After
shifting income to one or more CFCs in low-tax

to achieve a low ETR, under a worldwide
jurisdictions
system, U.S. MNEs may have
tax with deferral

to defer current U.S. taxation of the CFCs’
incentives
for as long as possible.
earnings

income earned indirectly through a CFC is not
 Recall,

profits are repatriated (unless caught by
taxed until
one of the anti-deferral rules).

are incentivized to structure and
 Thus, U.S. MNEs

plan to avoid triggering anti-deferral rules.

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