March 25, 2025

When Baskets Go Beyond Weaving – Understanding Foreign Tax Credit Baskets Under the Look-Through Rules

March 25, 2025/ Ruchelman P.L.L.C.

While the word “basket” may trigger a mental image of a bicycle with a daisy basket that is a gift in early childhood, the term has a totally different connotation in the tax world. It denotes “foreign tax credit baskets” to an international tax geek in the U.S. The foreign tax credit provisions are among the most complicated areas of U.S. and become further complicated when a “U.S. Shareholder” of a Controlled Foreign Corporation includes income in one year but receives distributions in another. In their article, Neha Rastogi and Stanley C. Ruchelman explore the labyrinth of the foreign tax credit provisions that are designed to ensure that (i) income and (ii) related foreign taxes are reported in the same foreign tax credit basket. The takeaway is that, if the exercise is not computed properly, double taxation of income is sure to arise.

June 02, 2020

Corporate Matters – The Value of Par Value

June 02, 2020/ Ruchelman P.L.L.C.

Winston Churchill is known to have said that the U.S. and the U.K. are separated by a common language. The gap is much wider with the rest of Europe as tax and business terminology may be similar, but the gap in understanding is wider. One area of the law where the chasm remains wide relates to everyday corporate terms, such as par and par value for stock. Not an important term in the U.S., the concept of “par value” in Europe is extremely important, especially if the shareholders in the U.S. want dividends and the managing director in Europe desperately keeps away from any transaction that could give rise to liability if dividend distributions are found to impair capital. Simon Prisk comments on the accepted meaning of the term in the U.S. and the surprise response he encounters when advising European clients.

October 31, 2018

Dutch Corporate Tax Reform: Dividend Tax Remains, A.T.A.D. Arrives, and Tax Rates Drop

October 31, 2018/ Ruchelman P.L.L.C.

Across the globe, the landscape for international tax is in a constant state of change. Nowhere is this more evident than in the Netherlands. On the third Tuesday of September, a repeal of the dividend withholding tax was announced. Within a month, it was withdrawn. Paul Kraan, a partner of Van Campen Liem in Amsterdam, discusses the remaining tax proposals presented by the Dutch government on the eve of the third Tuesday of September. These include provisions related to A.T.A.D. 1, such as G.A.A.R., an exit tax for corporations, a C.F.C. anti-abuse rule, and a cap on the deductibility of net interest expense. Also discussed is an existing unilateral exemption from withholding tax on cross-border dividend payments in (i) the context of an income tax treaty and (ii) the presence of economic substance for the direct or indirect shareholder. This exemption is likely to remain in the law.