Page 49 - International Taxation IRS Training Guides

Hybrid
Mismatches – In General

 Generally, a country’s international tax
rules only take into

account the application of that country’s rules to a cross-

transaction, without regard to how the transaction is
border
tax laws (or the combined
treated under another country’s

tax
treatment of the transaction under both countries’
laws).

• Often gave rise to “stateless income.”

 Globally, foreign countries were concerned with the

income result.
stateless The Organization for Economic

Cooperation and Development (OECD), an

organization published a report intended
intergovernmental
to neutralize hybrid mismatches and, as
a result, prevent

stateless income arising from
hybridity.
• Represented a major
shift in how hybridity was viewed globally.

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