Rev. Proc. 76-25

Section 1. Purpose.

The purpose of this Revenue Procedure is to set forth in a convenient checklist questionnaire the information necessary to be included by taxpayers in requesting a ruling under section 954(b)(4) of the Internal Revenue Code of 1954, which provides an exclusion from foreign base company income (as defined in section 954(a)) for any income received by a controlled foreign corporation (as defined in section 957(a)) if it is established that neither the creation or organization of the controlled foreign corporation under the laws of the foreign country in which it is incorporated nor the effecting of the transaction giving rise to such income has as one of its significant purposes a substantial reduction of income, war profits, or excess profits or similar taxes.

Sec. 2. Background.

.01 The Internal Revenue Service receives requests for rulings under section 954(b)(4) of the Code. Frequently, the information that is necessary for consideration of the issues presented is not included in the initial ruling requests. Therefore, unnecessary delays in the issuance of such rulings are experienced. The checklist set forth in this Revenue Procedure is designed to ensure the inclusion and order of presentation of necessary information in the initial ruling request. However, inasmuch as the information necessary for the issuance of a ruling with regard to any particular transaction depends upon all the facts and circumstances of that case, information in addition to that outlined in the checklist may be required with respect to that transaction. Nevertheless, careful use of the checklist should avoid needless delay and permit the issuance of rulings in the most expeditious fashion.

.02 The authority and general procedures of the National Office of the Service with respect to the issuance of advance rulings are outlined in Rev. Proc. 72-3, 1972-1 C.B. 698, and are applicable to requests for rulings under section 954(b)(4) of the Code.

Sec. 3. Information to be included in requests for rulings under section 954(b)(4) of the code.

.01 Information pertaining to the taxpayer requesting the rulings.

1 Identification--Name, address, and taxpayer identification number.

2 Jurisdiction--The location of the District Director's office that will have audit jurisdiction over the taxpayer's return and a statement whether, to the best knowledge of the taxpayer or the taxpayer's representative, the identical issue is being considered by any field office of the Service in connection with an active examination or audit of a tax return already filed or is being considered by a branch office of the Appellate Division.

.02 General information pertaining to the controlled foreign corporation.

1 Name.

2 Actual number of shares issued and outstanding and the percentage of each class of stock owned by each shareholder.

3 Description of the business activities.

4 Place and date of incorporation.

5 Place of management and control.

6 Place(s) of business activities.

7 Date on which business activities commenced.

.03 Specific information pertaining to the determination as to whether the controlled foreign corporation is not availed of to reduce taxes.

1 Information pertaining to country in which controlled foreign corporation conducts business.--A statement as to whether the foreign country imposes income, war profits, excess profits, or similar taxes at the federal, provincial, or local level.

(a) If the foreign country does impose such taxes, furnish the following:

(1) An attested copy and an attested translation of the relevant law. The document submitted should satisfy the requirements enumerated in Rev. Rul. 67-308, 1967-2 C.B. 254.

(2) A statement, if applicable, from the government of the foreign country attesting to the fact that it is not the foreign government's practice to tax income from operations conducted by the controlled foreign corporation within the foreign country with reference to the applicable income, war profits, excess profits, or similar tax law provisions. This statement should also state whether the foreign country would tax the income from the controlled foreign corporation's operations if the controlled foreign corporation were created or organized under the laws of, and/or managed and controlled in, the foreign country.

(3) An attested copy and an attested translation, if applicable, of any express exemption granted by the foreign country (by decree or otherwise) to the controlled foreign corporation from any income, war profits, excess profits, or similar taxes enacted by the foreign country at either the Federal, provincial, or local level. In lieu of this requirement, a statement from the foreign government indicating the terms of the exemption and the reasons therefor should be furnished. In either event, the foreign government should state whether the exemption would apply if the controlled foreign corporation were created or organized under the laws of, and/or managed and controlled in, the foreign country.

(b) If the foreign country does not have a law that imposes such taxes, furnish a statement to that effect from the foreign government or from a practicing attorney or other person recognized as knowledgeable in tax matters of the foreign country. In addition, a statement of the qualifications on such tax matters of the person submitting the statement should be attached.

2 Information pertaining to country or countries in which the controlled foreign corporation is created or organized and/or managed and controlled.--A statement as to whether the foreign country or countries impose any income, war profits, excess profits, or similar taxes at either the Federal, provincial, or local level.

(a) If the foreign country or countries do impose such taxes, the information required in section 3.03.1(a).

(b) If the foreign country or countries do not impose such taxes, the information required in section 3.03.1(b).

3 A statement as to whether the foreign countries described in section 3.03.1 and 3.03.2, at either the Federal, provincial, or local level, require the payment of revenues to them in any form that relate to the business operations of the controlled foreign corporation.

(a) If the foreign country requires such payment, an attested copy and attested translation of any relevant law should be furnished.

(b) If the foreign country does not require such payment, a statement from a practicing attorney or other person recognized as knowledgeable in tax matters of the foreign country attesting to the fact that such payment is not required should be furnished. In addition, a statement of the qualifications on such tax matters of the person submitting the statement should be attached.

Sec. 4. Inquiries.

Inquiries in regard to this Revenue Procedure should refer to its number and should be addressed to the Commissioner of Internal Revenue, Attention: T:C:C, Internal Revenue Service, Washington, D.C. 20224.