Among the unintended consequences of the 2017 US Tax Reform, the repeal of the Internal Revenue Code Section 958(b)(4) unintentionally results in the creation of a very large number of new controlled foreign corporations (new CFCs) which are imposed expanded Form 1099 reporting and backup withholding tax requirements. These requirements are very difficult to implement operationally for the reasons that the EBF has explained in a letter it sent to the US Treasury on 19 February 2019. In this letter, the EBF also emphasizes that new CFCs might be facing a potential loss of the portfolio interest exemption, which could disrupt common intercompany financing transactions. The EBF calls for an urgent solution.
The EBF is the voice of the European banking sector, bringing together national banking associations from 45 countries. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.
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