Page 92 - International Taxation IRS Training Guides

Pre-TCJA ETR Analysis

(“USP”) was taxed
 Pre TCJA, a United States Parent

US tax law at a 35 percent statutory rate on the
under

following income:

• Income recognized (received or earned)
by USP directly
• Income of
foreign branch held directly (or indirectly through pass-
USP
through entities) by
income recognized by USP under subpart F /
• Foreign subsidiary
rules (generally passive /
passive foreign investment company
mobile income)
Note: Subpart F applies to certain foreign
subsidiaries
of USP: controlled foreign corporations (CFCs) See
IRC 957.

 An MNE’s
effective tax rate could be different than the
statutory
rate for several reasons and we will discuss

training.
some of those during this

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