| Treasury Decision 9235 |
January 23, 2006 |
Classification of Certain Foreign Entities
Internal Revenue Service (IRS), Treasury.
Final regulations and temporary regulations.
This document contains final and temporary regulations relating to certain
business entities included on the list of foreign business entities that are
always classified as corporations for Federal tax purposes.
Effective Date: These regulations are effective
on December 16, 2005.
Applicability Date: For the dates of applicability
of these regulations, see §301.7701-2(e)(4).
FOR FURTHER INFORMATION CONTACT:
Ronald M. Gootzeit, (202) 622-3860 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
On April 14, 2005, the IRS and Treasury Department published in the Federal Register temporary regulations (T.D. 9197,
2005-18 I.R.B. 985 [70 FR 19697]) and a notice of proposed rulemaking (REG-148521-04,
2005-18 I.R.B. 995 [70 FR 19722] under section 7701 of the Internal Revenue
Code (Code). The regulations added certain foreign business entities to the
list of entities in §301.7701-2(b)(8) (the per se corporation
list) in response to the adoption by the Council of the European Union of
a Council Regulation (2157/2001 2001 O.J. (L 294)) permitting a new business
entity, the European public limited liability company (Societas Europaea or
SE). Specifically, the temporary and proposed regulations added the SE, Estonian
Aktsiaselts, Latvian Akciju Sabiedriba, Lithuanian Akcine Bendroves, Slovenian
Delniska Druzba, and Liechtenstein Aktiengesellschaft to the per
se list of corporations. For further background, see T.D. 9197,
2005-18 I.R.B. 985 [70 FR 19697] and Notice 2004-68, 2004-2 C.B. 706.
Explanation of Provisions
No substantive comments were received regarding the temporary and proposed
regulations. Accordingly, these regulations finalize the proposed regulations
without modification and revise the temporary regulations to cross reference
to the new provisions.
It has been determined that this Treasury decision is not a significant
regulatory action as defined in Executive Order 12866. Therefore, a regulatory
assessment is not required. It has also been determined that section 553(b)
of the Administrative and Procedure Act (5 U.S.C. chapter 5) does not apply
to these regulations, and, because these regulations do not impose a collection
of information on small entities, the Regulatory Flexibility Act (5 U.S.C.
chapter 6) does not apply. Pursuant to section 7805(f) of the Code, the Notice
of Proposed Rulemaking preceding the final regulations was submitted to the
Chief Counsel for Advocacy of the Small Business Administration for comment
on their impact on small business.
Amendments to the Regulations
Accordingly, 26 CFR part 301 is amended as follows:
PART 301 — PROCEDURE AND ADMINISTRATION
Paragraph 1. The authority citation for part 301 continues to read,
in part, as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 301.7701-2 is amended by:
1. Adding six entries in alphabetical order to paragraph (b)(8)(i).
2. Removing paragraph (b)(8)(vi).
3. Adding paragraphs (e)(3) and (4).
The additions read as follows:
§301.7701-2 Business entities; definitions.
* * * * *
(b) * * *
(8) * * *
(i) * * *
Estonia, Aktsiaselts
European Economic Area/European Union, Societas Europaea
* * * * *
Latvia, Akciju Sabiedriba
* * * * *
Liechtenstein, Aktiengesellschaft
Lithuania, Akcine Bendroves
* * * * *
Slovenia, Delniska Druzba.
* * * * *
(e) * * *
(3) [Reserved]. For further guidance, see §301.7701-2T(f).
(4) The reference to the Estonian, Latvian, Liechtenstein, Lithuanian,
and Slovenian entities in paragraph (b)(8)(i) of this section applies to such
entities formed on or after October 7, 2004, and to any such entity formed
before such date from the date any person or persons, who were not owners
of the entity as of October 7, 2004, own in the aggregate a 50 percent or
greater interest in the entity. The reference to the European Economic Area/European
Union entity in paragraph (b)(8)(i) of this section applies to such entities
formed on or after October 8, 2004.
Par. 3. Section 301.7701-2T is amended by:
1. Removing paragraph (b)(8)(vi).
2. Revising paragraph (e)(3).
The revision reads as follows:
§301.7701-2T Business entities; definitions (temporary).
* * * * *
(e) * * *
(3) [Reserved]. For further guidance, see §301.7701-2(e)(4).
* * * * *
Mark E. Matthews,
Deputy
Commissioner for
Services and Enforcement.
Approved December 8, 2005.
Eric Solomon,
Acting
Deputy Assistant
Secretary of the Treasury.
Note
(Filed by the Office of the Federal Register on December 15, 2005, 8:45
a.m., and published in the issue of the Federal Register for December 16,
2005, 70 F.R. 74658)
The principal author of these regulations is Ronald M. Gootzeit of the
Office of Associate Chief Counsel (International). However, other personnel
from the IRS and Treasury Department participated in their development.
* * * * *
Internal Revenue Bulletin 2006-04
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