Guidance Regarding Foreign Base Company Sales Income; Correction, 20201-20203 [E8-8031]
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Federal Register / Vol. 73, No. 73 / Tuesday, April 15, 2008 / Proposed Rules
an aircraft that has a VH less than or
equal to 87 knots CAS; and
(2) Receive a logbook endorsement
from the authorized instructor who
provided the training specified in
paragraph (b)(1) of this section
certifying that you are proficient in the
operation of light-sport aircraft with a
VH less than or equal to 87 knots CAS.
(c) If you hold a sport pilot certificate
and you seek to operate a light-sport
aircraft that is an airplane and has a VH
greater than 87 knots CAS after [ONE
YEAR AFTER THE EFFECTIVE DATE
OF THE FINAL RULE], you must receive
and log 1 hour of flight training in a
single-engine airplane that has a VH
greater than 87 knots CAS on the control
and maneuvering of an airplane solely
by reference to instruments, including
straight and level flight, climbs and
descents, turns to a heading, and
recovery from unusual flight attitudes.
(d) The training and endorsements
required by paragraph (b) of this section
are not required if you have logged
flight time as pilot in command of an
aircraft with a VH less than or equal to
87 knots CAS prior to [EFFECTIVE
DATE OF THE FINAL RULE].
§ 61.329
[Removed]
39. Remove § 61.329.
§§ 61.401 through 61.431 (Subpart K)
[Removed]
40. Remove subpart K consisting of
§§ 61.401 through 61.431.
PART 91—GENERAL OPERATING AND
FLIGHT RULES
41. The authority citation for part 91
continues to read as follows:
Authority: 49 U.S.C. 106(g), 1155, 40103,
40113, 40120, 44101, 44111, 44701, 44704,
44709, 44711, 44712, 44715, 44716, 44717,
44722, 46306, 46315, 46316, 46504, 46506–
46507, 47122, 47508, 47528–47531, articles
12 and 29 of the Convention on International
Civil Aviation (61 Stat. 1180).
Maintenance records.
(a) * * *
(2) * * *
(v) The current status of applicable
airworthiness directives (AD) and safety
directives including, for each, the
method of compliance, the AD or safety
directive number and revision date. If
the AD or safety directive involves
recurring action, the time and date
when the next action is required.
*
*
*
*
*
PART 141—PILOT SCHOOLS
44. The authority citation for part 141
continues to read as follows:
Authority: 49 U.S.C. 106(g), 40113, 44701–
44703, 44707, 44709, 44711, 45102–45103,
45301–45302.
45. Amend § 141.39 by revising
paragraph (b) to read as follows:
§ 141.39
Aircraft.
*
*
*
*
*
(b) Each aircraft must be certificated
with a standard airworthiness
certificate, a primary airworthiness
certificate, or a special airworthiness
certificate in the light-sport category
unless the Administrator determines
that due to the nature of the approved
course, an aircraft not having a standard
airworthiness certificate, a primary
airworthiness certificate, or a special
airworthiness certificate in the lightsport category may be used;
*
*
*
*
*
Issued in Washington, DC on April 9, 2008.
James J. Ballough,
Director, Flight Standards Service.
[FR Doc. 08–1127 Filed 4–11–08; 8:45am]
BILLING CODE 4910–13–P
Internal Revenue Service
Minimum safe altitudes: General.
*
rfrederick on PROD1PC67 with PROPOSALS
§ 91.417
DEPARTMENT OF THE TREASURY
42. Amend § 91.119 by revising
paragraph (d) to read as follows:
§ 91.119
less than the minimums prescribed in
paragraph (c) of this section.
43. Amend § 91.417 by revising
paragraph (a)(2)(v) to read as follows:
*
*
*
*
(d) Helicopters, powered parachutes,
and weight-shift-control aircraft. If the
operation is conducted without hazard
to persons or property on the surface—
(1) A helicopter may be operated at
less than the minimums prescribed in
paragraph (b) or (c) of this section,
provided each person operating the
helicopter complies with any routes or
altitudes specifically prescribed for
helicopters by the FAA; and
(2) A powered parachute or weightshift-control aircraft may be operated at
VerDate Aug<31>2005
15:37 Apr 14, 2008
Jkt 214001
26 CFR Part 1
[REG–124590–07]
RIN 1545–BG11
Guidance Regarding Foreign Base
Company Sales Income; Correction
Internal Revenue Service (IRS),
Treasury.
ACTION: Correction to a notice of
proposed rulemaking.
AGENCY:
SUMMARY: This document contains
corrections to a notice of proposed
PO 00000
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20201
rulemaking (REG–124590–07) that was
published in the Federal Register on
Thursday, February 28, 2008 (73 FR
10716) providing guidance relating to
foreign base company sales income, as
defined in section 954(d), in cases in
which personal property sold by a
controlled foreign corporation (CFC) is
manufactured, produced, or constructed
pursuant to a contract manufacturing
arrangement or by one or more branches
of the CFC.
FOR FURTHER INFORMATION CONTACT:
Ethan Atticks at (202) 622–3840 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The correction notice that is the
subject of this document is under
section 954 of the Internal Revenue
Code.
Need for Correction
As published, a notice of proposed
rulemaking (REG–124590–07) contains
errors that may prove to be misleading
and are in need of clarification.
Correction of Publication
Accordingly, the publication of a
notice of proposed rulemaking (REG–
124590–07), which was the subject of
FR Doc. E8–3557, is corrected as
follows:
1. On page 10717, column 1, in the
preamble, under the paragraph heading
‘‘B. The Branch Rule’’, line 7 from the
bottom of the paragraph, the language
‘‘CFC and constitutes FBCSI of the
CFC.’’ is corrected to read ‘‘CFC and
constitutes FBCSI of the CFC. See
section 954(d)(2).’’.
2. On page 10718, column 1, in the
preamble, under the paragraph heading
‘‘C. Legal Developments’’, line 4 from
the bottom of the first paragraph, the
language ‘‘considered the activities of a
separate’’ is corrected to read ‘‘treated as
the activities of a separate’’.
3. On page 10718, column 2, in the
preamble, under the paragraph heading
‘‘Explanation of Provisions’’, line 11
from the bottom of the column, the
language ‘‘and/or a branch of the CFC,
is involved’’ is corrected to read ‘‘and/
or a branch of the CFC, is otherwise
involved’’.
4. On page 10718, column 3, in the
preamble, under the paragraph heading
‘‘A. Application of the Manufacturing
Exception Where the Physical
Manufacturing Test Is Not Satisfied by
the CFC but the CFC Is Involved in the
Manufacturing Process—Substantial
Contribution to Manufacturing’’, lines 2
and 3 of the first paragraph, the
language ‘‘income from the purchase of
personal property from any person and
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20202
Federal Register / Vol. 73, No. 73 / Tuesday, April 15, 2008 / Proposed Rules
‘‘its’’ sale’’ is corrected to read ‘‘income
derived in connection with the purchase
of personal property from a related
person and ‘‘its’’ sale to any person, and
income derived in connection with the
purchase of personal property from any
person and ‘‘its’’ sale’’.
5. On page 10718, column 3, in the
preamble, under the paragraph heading
‘‘A. Application of the Manufacturing
Exception Where the Physical
Manufacturing Test Is Not Satisfied by
the CFC but the CFC Is Involved in the
Manufacturing Process—Substantial
Contribution to Manufacturing’’, line 4
from the bottom of the second
paragraph, the language ‘‘purchase or
sales and manufacturing’’ is corrected to
read ‘‘purchasing or selling and
manufacturing’’.
6. On page 10719, column 2, in the
preamble, under the paragraph heading
‘‘A. Application of the Manufacturing
Exception Where the Physical
Manufacturing Test Is Not Satisfied by
the CFC but the CFC Is Involved in the
Manufacturing Process—Substantial
Contribution to Manufacturing’’, first
paragraph of the column, lines 6 and 7,
the language ‘‘for the manufacturing
exception from FBCSI only if the CFC,
acting through’’ is corrected to read ‘‘for
the manufacturing exception only if the
CFC, acting through’’.
7. On page 10719, column 2, in the
preamble, under the paragraph heading
‘‘A. Application of the Manufacturing
Exception Where the Physical
Manufacturing Test Is Not Satisfied by
the CFC but the CFC Is Involved in the
Manufacturing Process—Substantial
Contribution to Manufacturing’’, line 9
from the bottom of the second paragraph
of the column, the language ‘‘proposed
§ 1.954–3(a)(4)(iv)(b), a CFC’’ is
corrected to read ‘‘proposed § 1.954–
3(a)(4)(iv)(a), a CFC’’.
8. On page 10719, column 3, in the
preamble, under the paragraph heading
‘‘A. Application of the Manufacturing
Exception Where the Physical
Manufacturing Test Is Not Satisfied by
the CFC but the CFC Is Involved in the
Manufacturing Process—Substantial
Contribution to Manufacturing’’, first
paragraph of the column, lines 4
through 8, the language ‘‘principles of
§ 1.954–3(a)(4)(ii) and (iii); (2)
performance of manufacturing activities
that are considered in, but insufficient
to satisfy the tests provided in § 1.954–
3(a)(4)(ii) or (iii); (3) control’’ is
corrected to read ‘‘principles of § 1.954–
3(a)(4)(ii) or (iii); (2) performance of
activities that are considered in
applying, but insufficient to satisfy, the
tests provided in § 1.954–3(a)(4)(ii) and
(iii); (3) control’’.
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9. On page 10721, column 2, in the
preamble, under the paragraph heading
‘‘2. Modification of § 1.954–
3(b)(2)(ii)(e)’’, second paragraph of the
column, lines 1 through 4, the language
‘‘In addition, consistent with the
clarification regarding the scope of the
branch rule contained in proposed
§ 1.954–3(b)(1), § 1.954–3(b)(2)(ii)(e) is’’
is corrected to read ‘‘In addition,
consistent with § 1.954–3(b)(2)(ii)(f),
§ 1.954–3(b)(2)(ii)(e) is’’.
10. On page 10722, column 1, in the
preamble, under the paragraph heading
‘‘3. Modification of § 1.954–3(b)(2)(i)(b),
(b)(2)(ii)(b) and (b)(4), Example 3’’, first
paragraph of the column, last line, the
language ‘‘the branch’s country is
FBCSI.’’ is corrected to read ‘‘the
branch’s country result in FBCSI.’’.
§ 1.954–3
[Corrected]
11. On page 10723, column 3,
§ 1.954–3(a)(4)(i), lines 16 and 17, the
language ‘‘provisions of paragraphs
(a)(ii), (a)(iii), or (a)(iv) of this section
through the’’ is corrected to read
‘‘provisions of paragraphs (a)(4)(ii),
(a)(4)(iii), or (a)(4)(iv) of this section
through the’’.
12. On page 10724, column 1,
§ 1.954–3(a)(4)(iv)(a), line 16, the
language ‘‘respect to the property prior
to sale were’’ is corrected to read
‘‘respect to that property prior to sale
were’’.
13. On page 10724, column 2,
§ 1.954–3(a)(4)(iv)(c), first line, the
language ‘‘The rules of this paragraph
(a)(iv)’’ is corrected to read ‘‘The rules
of this paragraph (a)(4)(iv)’’.
14. On page 10724, column 2,
§ 1.954–3(a)(4)(iv)(c) Example 1. (i), line
6 of the paragraph, the language
‘‘paragraph (a)(4)(iii)) of this section
into’’ is corrected to read ‘‘paragraph
(a)(4)(iii) of this section) into’’.
15. On page 10724, column 3,
§ 1.954–3(a)(4)(iv)(c) Example 3. (ii),
lines 2 through 4, the language
‘‘undertaken with respect to Product X
between the time the raw materials were
purchased and the time Product X was
sold’’ is corrected to read ‘‘undertaken
with respect to Product X prior to sale’’.
16. On page 10725, column 2,
§ 1.954–3(b)(1)(ii)(c)(2), line 12 from the
bottom of the paragraph, the language
‘‘corporation and as if any such other’’
is corrected to read ‘‘corporation and as
if any other’’.
17. On page 10725, column 3,
§ 1.954–3(b)(1)(ii)(c)(2) Example. (i),
line 9, the language ‘‘property (Product
X and Y respectively)’’ is corrected to
read ‘‘ property (Product X and Product
Y respectively)’’.
18. On page 10725, column 3,
§ 1.954–3(b)(1)(ii)(c)(3), line 6, the
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language ‘‘construct, grow, or extract the
same’’ is corrected to read ‘‘construct,
grow, or extract the same item of
personal’’.
19. On page 10726, column 2,
§ 1.954–3(b)(1)(ii)(c)(3)(c), last sentence
of the paragraph, the language ‘‘The
location of any particular activity (that
is, for purposes of deciding whether that
activity is conducted in a particular
branch or in the remainder of the
controlled foreign corporation) will be
determined by applying the principles
of paragraph (b)(1)(ii)(c)(3)(d) of this
section.’’ is removed.
20. On page 10727, column 1,
§ 1.954–3(b)(1)(ii)(c)(3)(f) Example 1.(i),
first line of the column, the language
‘‘Branch A and B do not satisfy either’’
is corrected to read ‘‘Branch A and
Branch B do not satisfy either’’.
21. On page 10727, column 2,
§ 1.954–3(b)(1)(ii)(c)(3)(f) Example 3.(i),
line 11 from the bottom of the
paragraph, the language ‘‘country M but
who regularly travel to’’ is corrected to
read ‘‘Country M but who regularly
travel to’’.
22. On page 10728, column 1,
§ 1.954–3(b)(1)(ii)(c)(3)(f) Example 4.(ii),
lines 1 through 8 from the bottom of the
paragraph, the language ‘‘The remainder
of FS does not qualify for the
manufacturing exception from foreign
base company sales income contained
in paragraph (a)(4)(iv) of this section.
Because Product X is sold for use,
consumption, or disposition outside of
Country M, the income from the sale of
Product X is foreign base company sales
income.’’ is corrected to read ‘‘The
remainder of FS must therefore
independently qualify for the
manufacturing exception contained in
paragraph (a)(4) of this section or
income from the sale of Product X will
be foreign base company sales income.’’
23. On page 10728, column 2,
§ 1.954–3(b)(1)(ii)(c)(3)(f) Example 5.(ii),
lines 8 through 25, the language
‘‘Accordingly, paragraph (b)(1)(ii)(b) of
this section is applied by comparing the
effective rate of tax imposed on the
income from the sales of Product X
against the effective rate of tax that
would apply to the sales income in
Branch A, which is located in the
jurisdiction that would impose the
highest effective rate of tax on the sales
income (30%). Because the effective rate
of tax in Country B with respect to the
sales income (0%) is less than 90% of,
and at least 5 percentage points less
than, the effective rate of tax that would
apply to such income in Country A
(30%), the seller, Branch B, is treated as
selling on behalf of Branch A, which is
treated as the remainder of FS pursuant
to paragraph (b)(1)(ii)(c) of this section.
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Federal Register / Vol. 73, No. 73 / Tuesday, April 15, 2008 / Proposed Rules
Further, for purposes of determining’’ is
corrected to read ‘‘Accordingly,
pursuant to paragraph (b)(2)(ii)(c)(3)(e),
Branch A is treated as the location of
manufacturing for purposes of applying
paragraph (b)(1)(ii)(b) of this section.
Therefore, the effective rate of tax
imposed on the income from the sales
of Product X is compared against the
effective rate of tax that would apply to
that income if it were earned in Country
A, which would impose the highest
effective rate of tax on the sales income
(30%). Because the effective rate of tax
in Country B with respect to the sales
income (0%) is less than 90% of, and at
least 5 percentage points less than, the
effective rate of tax that would apply to
such income in Country A (30%),
Branch B, treated as the remainder of FS
pursuant to paragraph (b)(1)(ii)(c) of this
section, is treated as selling on behalf of
Branch A. Further, for purposes of
determining’’.
24. On page 10728, column 2,
§ 1.954–3(b)(1)(ii)(c)(3)(f) Example 5.(ii),
lines 1 through 12 from the bottom of
the paragraph, the language ‘‘company
sales income. Since the location of
manufacturing of Product X is
considered to be the location of Branch
A rather than Branch B, Branch B,
treated as the remainder of FS, does not
qualify for the manufacturing exception
from foreign base company sales income
contained in paragraph (a)(4) of this
section. Since the sale of Product X is
for use, consumption, or disposition
outside of Country B, the income from
the sale of Product X is foreign base
company sales income.’’ is corrected to
read ‘‘company sales income. Branch B,
treated as the remainder of FS, must
therefore independently qualify for the
manufacturing exception from foreign
base company sales income contained
in paragraph (a)(4) of this section or the
income from the sale of Product X will
be foreign base company sales income.’’.
25. On page 10729, column 1,
§ 1.954–3(b)(2)(ii)(a), lines 1 through 7
from the bottom of the paragraph, the
language ‘‘tested against the effective
rate of tax that would apply to such
income if it were earned in the
jurisdiction of such other branch or
similar establishment or the remainder
of the controlled foreign corporation
under § 1.954–3(b)(1)(i)(b) or (ii)(b) of
this section.’’ is corrected to read
‘‘tested under the principles of § 1.954–
3(b)(1)(i)(b) or (ii)(b) of this section
against the effective rate of tax that
would apply to such income if it were
earned in the jurisdiction of such other
branch or similar establishment or the
remainder of the controlled foreign
corporation.’’.
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26. On page 10729, column 2,
§ 1.954–3(b)(2)(ii)(c)(2) Example 1.(ii),
line 6, the language ‘‘Branch A (30%),
the seller, the remainder of’’ is corrected
to read ‘‘Branch A (30%), the remainder
of’’.
27. On page 10729, column 3,
§ 1.954–3(b)(2)(ii)(c)(2) Example 3.(i),
line 7 from the bottom of the column,
the language ‘‘persons. 100 percent of
the articles sold’’ is corrected to read
‘‘persons. One hundred percent of the
articles sold’’.
28. On page 10730, column 1,
§ 1.954–3(b)(2)(ii)(c)(2) Example 3.(i),
first paragraph of the column, line 10,
the language ‘‘Country, but the income
of Branch B for 1964’’ is corrected to
read ‘‘country, but the income of Branch
B for 1964’’.
29. On page 10730, column 1,
§ 1.954–3(b)(2)(ii)(d), line 10, the
language ‘‘the last sentence of paragraph
(a)(6), the’’ is corrected to read
‘‘paragraph (a)(6)(i), the’’.
LaNita Van Dyke,
Chief, Publications and Regulations Branch,
Legal Processing Division, Associate Chief
Counsel (Procedure and Administration).
[FR Doc. E8–8031 Filed 4–14–08; 8:45 am]
BILLING CODE 4830–01–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 54
[REG–108508–08]
RIN 1545–BH71
Determination of Minimum Required
Pension Contributions
Internal Revenue Service (IRS),
Treasury.
ACTION: Notice of proposed rulemaking
and notice of public hearing.
AGENCY:
SUMMARY: This document contains
proposed regulations providing
guidance on the determination of
minimum required contributions for
purposes of the funding rules that apply
to single employer defined benefit
plans. These regulations would affect
sponsors, administrators, participants,
and beneficiaries of single employer
defined benefit plans. This document
also provides a notice of a public
hearing on these proposed regulations.
DATES: Written or electronic comments
must be received by July 14, 2008.
Outlines of topics to be discussed at the
public hearing scheduled for August 4,
2008, at 10 a.m. must be received by
July 15, 2008.
PO 00000
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Send submissions to:
CC:PA:LPD:PR (REG–108508–08), room
5203, Internal Revenue Service, PO Box
7604, Ben Franklin Station, Washington,
DC 20044. Submissions may be handdelivered Monday through Friday
between the hours of 8 a.m. and 4 p.m.
to CC:PA:LPD:PR (REG–108508–08),
Courier’s Desk, Internal Revenue
Service, 1111 Constitution Avenue,
NW., Washington, DC, or sent
electronically via the Federal
eRulemaking Portal at
www.regulations.gov (IRS–REG–
108508–08). The public hearing will be
held in the IRS Auditorium, Internal
Revenue Building, 1111 Constitution
Avenue, NW., Washington, DC.
FOR FURTHER INFORMATION CONTACT:
Concerning the regulations, Lauson C.
Green or Linda S. F. Marshall at (202)
622–6090; concerning submissions of
comments, the hearing, and/or being
placed on the building access list to
attend the hearing, Richard A. Hurst, at
Richard.A.Hurst@irscounsel.treas.gov or
(202) 622–7180 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
ADDRESSES:
Background
This document contains proposed
Income Tax Regulations (26 CFR part 1)
under sections 430(a), 430(c), 430(e),
and 430(j), as added to the Internal
Revenue Code (Code) by the Pension
Protection Act of 2006 (PPA ’06), Public
Law 109–280 (120 Stat. 780). In
addition, this document contains
proposed Excise Tax Regulations (26
CFR part 54) under section 4971.
Section 412 provides minimum
funding requirements that generally
apply for pension plans (including both
defined benefit pension plans and
money purchase pension plans). PPA
’06 makes extensive changes to those
minimum funding requirements that
generally apply for plan years beginning
on or after January 1, 2008. Section 430,
which was added by PPA ’06, specifies
the minimum funding requirements that
apply to single employer defined benefit
pension plans (including multiple
employer plans) pursuant to section
412.1
1 Section 302 of the Employee Retirement Income
Security Act of 1974, as amended (ERISA), sets
forth funding rules that are parallel to those in Code
section 412, and section 303 of ERISA sets forth
additional funding rules for single employer plans
that are parallel to those in section 430 of the Code.
Under section 101 of Reorganization Plan No. 4 of
1978 (43 FR 47713) and section 302 of ERISA, the
Secretary of the Treasury has interpretive
jurisdiction over the subject matter addressed in
these proposed regulations for purposes of ERISA,
as well as the Code. Thus, these proposed Treasury
regulations issued under section 430 of the Code
would apply as well for purposes of section 303 of
ERISA.
E:\FR\FM\15APP1.SGM
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]]>Agencies
[Federal Register Volume 73, Number 73 (Tuesday, April 15, 2008)]
[Proposed Rules]
[Pages 20201-20203]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-8031]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[REG-124590-07]
RIN 1545-BG11
Guidance Regarding Foreign Base Company Sales Income; Correction
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Correction to a notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: This document contains corrections to a notice of proposed
rulemaking (REG-124590-07) that was published in the Federal Register
on Thursday, February 28, 2008 (73 FR 10716) providing guidance
relating to foreign base company sales income, as defined in section
954(d), in cases in which personal property sold by a controlled
foreign corporation (CFC) is manufactured, produced, or constructed
pursuant to a contract manufacturing arrangement or by one or more
branches of the CFC.
FOR FURTHER INFORMATION CONTACT: Ethan Atticks at (202) 622-3840 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The correction notice that is the subject of this document is under
section 954 of the Internal Revenue Code.
Need for Correction
As published, a notice of proposed rulemaking (REG-124590-07)
contains errors that may prove to be misleading and are in need of
clarification.
Correction of Publication
Accordingly, the publication of a notice of proposed rulemaking
(REG-124590-07), which was the subject of FR Doc. E8-3557, is corrected
as follows:
1. On page 10717, column 1, in the preamble, under the paragraph
heading ``B. The Branch Rule'', line 7 from the bottom of the
paragraph, the language ``CFC and constitutes FBCSI of the CFC.'' is
corrected to read ``CFC and constitutes FBCSI of the CFC. See section
954(d)(2).''.
2. On page 10718, column 1, in the preamble, under the paragraph
heading ``C. Legal Developments'', line 4 from the bottom of the first
paragraph, the language ``considered the activities of a separate'' is
corrected to read ``treated as the activities of a separate''.
3. On page 10718, column 2, in the preamble, under the paragraph
heading ``Explanation of Provisions'', line 11 from the bottom of the
column, the language ``and/or a branch of the CFC, is involved'' is
corrected to read ``and/or a branch of the CFC, is otherwise
involved''.
4. On page 10718, column 3, in the preamble, under the paragraph
heading ``A. Application of the Manufacturing Exception Where the
Physical Manufacturing Test Is Not Satisfied by the CFC but the CFC Is
Involved in the Manufacturing Process--Substantial Contribution to
Manufacturing'', lines 2 and 3 of the first paragraph, the language
``income from the purchase of personal property from any person and
[[Page 20202]]
``its'' sale'' is corrected to read ``income derived in connection with
the purchase of personal property from a related person and ``its''
sale to any person, and income derived in connection with the purchase
of personal property from any person and ``its'' sale''.
5. On page 10718, column 3, in the preamble, under the paragraph
heading ``A. Application of the Manufacturing Exception Where the
Physical Manufacturing Test Is Not Satisfied by the CFC but the CFC Is
Involved in the Manufacturing Process--Substantial Contribution to
Manufacturing'', line 4 from the bottom of the second paragraph, the
language ``purchase or sales and manufacturing'' is corrected to read
``purchasing or selling and manufacturing''.
6. On page 10719, column 2, in the preamble, under the paragraph
heading ``A. Application of the Manufacturing Exception Where the
Physical Manufacturing Test Is Not Satisfied by the CFC but the CFC Is
Involved in the Manufacturing Process--Substantial Contribution to
Manufacturing'', first paragraph of the column, lines 6 and 7, the
language ``for the manufacturing exception from FBCSI only if the CFC,
acting through'' is corrected to read ``for the manufacturing exception
only if the CFC, acting through''.
7. On page 10719, column 2, in the preamble, under the paragraph
heading ``A. Application of the Manufacturing Exception Where the
Physical Manufacturing Test Is Not Satisfied by the CFC but the CFC Is
Involved in the Manufacturing Process--Substantial Contribution to
Manufacturing'', line 9 from the bottom of the second paragraph of the
column, the language ``proposed Sec. 1.954-3(a)(4)(iv)(b), a CFC'' is
corrected to read ``proposed Sec. 1.954-3(a)(4)(iv)(a), a CFC''.
8. On page 10719, column 3, in the preamble, under the paragraph
heading ``A. Application of the Manufacturing Exception Where the
Physical Manufacturing Test Is Not Satisfied by the CFC but the CFC Is
Involved in the Manufacturing Process--Substantial Contribution to
Manufacturing'', first paragraph of the column, lines 4 through 8, the
language ``principles of Sec. 1.954-3(a)(4)(ii) and (iii); (2)
performance of manufacturing activities that are considered in, but
insufficient to satisfy the tests provided in Sec. 1.954-3(a)(4)(ii)
or (iii); (3) control'' is corrected to read ``principles of Sec.
1.954-3(a)(4)(ii) or (iii); (2) performance of activities that are
considered in applying, but insufficient to satisfy, the tests provided
in Sec. 1.954-3(a)(4)(ii) and (iii); (3) control''.
9. On page 10721, column 2, in the preamble, under the paragraph
heading ``2. Modification of Sec. 1.954-3(b)(2)(ii)(e)'', second
paragraph of the column, lines 1 through 4, the language ``In addition,
consistent with the clarification regarding the scope of the branch
rule contained in proposed Sec. 1.954-3(b)(1), Sec. 1.954-
3(b)(2)(ii)(e) is'' is corrected to read ``In addition, consistent with
Sec. 1.954-3(b)(2)(ii)(f), Sec. 1.954-3(b)(2)(ii)(e) is''.
10. On page 10722, column 1, in the preamble, under the paragraph
heading ``3. Modification of Sec. 1.954-3(b)(2)(i)(b), (b)(2)(ii)(b)
and (b)(4), Example 3'', first paragraph of the column, last line, the
language ``the branch's country is FBCSI.'' is corrected to read ``the
branch's country result in FBCSI.''.
Sec. 1.954-3 [Corrected]
11. On page 10723, column 3, Sec. 1.954-3(a)(4)(i), lines 16 and
17, the language ``provisions of paragraphs (a)(ii), (a)(iii), or
(a)(iv) of this section through the'' is corrected to read ``provisions
of paragraphs (a)(4)(ii), (a)(4)(iii), or (a)(4)(iv) of this section
through the''.
12. On page 10724, column 1, Sec. 1.954-3(a)(4)(iv)(a), line 16,
the language ``respect to the property prior to sale were'' is
corrected to read ``respect to that property prior to sale were''.
13. On page 10724, column 2, Sec. 1.954-3(a)(4)(iv)(c), first
line, the language ``The rules of this paragraph (a)(iv)'' is corrected
to read ``The rules of this paragraph (a)(4)(iv)''.
14. On page 10724, column 2, Sec. 1.954-3(a)(4)(iv)(c) Example 1.
(i), line 6 of the paragraph, the language ``paragraph (a)(4)(iii)) of
this section into'' is corrected to read ``paragraph (a)(4)(iii) of
this section) into''.
15. On page 10724, column 3, Sec. 1.954-3(a)(4)(iv)(c) Example 3.
(ii), lines 2 through 4, the language ``undertaken with respect to
Product X between the time the raw materials were purchased and the
time Product X was sold'' is corrected to read ``undertaken with
respect to Product X prior to sale''.
16. On page 10725, column 2, Sec. 1.954-3(b)(1)(ii)(c)(2), line 12
from the bottom of the paragraph, the language ``corporation and as if
any such other'' is corrected to read ``corporation and as if any
other''.
17. On page 10725, column 3, Sec. 1.954-3(b)(1)(ii)(c)(2) Example.
(i), line 9, the language ``property (Product X and Y respectively)''
is corrected to read `` property (Product X and Product Y
respectively)''.
18. On page 10725, column 3, Sec. 1.954-3(b)(1)(ii)(c)(3), line 6,
the language ``construct, grow, or extract the same'' is corrected to
read ``construct, grow, or extract the same item of personal''.
19. On page 10726, column 2, Sec. 1.954-3(b)(1)(ii)(c)(3)(c), last
sentence of the paragraph, the language ``The location of any
particular activity (that is, for purposes of deciding whether that
activity is conducted in a particular branch or in the remainder of the
controlled foreign corporation) will be determined by applying the
principles of paragraph (b)(1)(ii)(c)(3)(d) of this section.'' is
removed.
20. On page 10727, column 1, Sec. 1.954-3(b)(1)(ii)(c)(3)(f)
Example 1.(i), first line of the column, the language ``Branch A and B
do not satisfy either'' is corrected to read ``Branch A and Branch B do
not satisfy either''.
21. On page 10727, column 2, Sec. 1.954-3(b)(1)(ii)(c)(3)(f)
Example 3.(i), line 11 from the bottom of the paragraph, the language
``country M but who regularly travel to'' is corrected to read
``Country M but who regularly travel to''.
22. On page 10728, column 1, Sec. 1.954-3(b)(1)(ii)(c)(3)(f)
Example 4.(ii), lines 1 through 8 from the bottom of the paragraph, the
language ``The remainder of FS does not qualify for the manufacturing
exception from foreign base company sales income contained in paragraph
(a)(4)(iv) of this section. Because Product X is sold for use,
consumption, or disposition outside of Country M, the income from the
sale of Product X is foreign base company sales income.'' is corrected
to read ``The remainder of FS must therefore independently qualify for
the manufacturing exception contained in paragraph (a)(4) of this
section or income from the sale of Product X will be foreign base
company sales income.''
23. On page 10728, column 2, Sec. 1.954-3(b)(1)(ii)(c)(3)(f)
Example 5.(ii), lines 8 through 25, the language ``Accordingly,
paragraph (b)(1)(ii)(b) of this section is applied by comparing the
effective rate of tax imposed on the income from the sales of Product X
against the effective rate of tax that would apply to the sales income
in Branch A, which is located in the jurisdiction that would impose the
highest effective rate of tax on the sales income (30%). Because the
effective rate of tax in Country B with respect to the sales income
(0%) is less than 90% of, and at least 5 percentage points less than,
the effective rate of tax that would apply to such income in Country A
(30%), the seller, Branch B, is treated as selling on behalf of Branch
A, which is treated as the remainder of FS pursuant to paragraph
(b)(1)(ii)(c) of this section.
[[Page 20203]]
Further, for purposes of determining'' is corrected to read
``Accordingly, pursuant to paragraph (b)(2)(ii)(c)(3)(e), Branch A is
treated as the location of manufacturing for purposes of applying
paragraph (b)(1)(ii)(b) of this section. Therefore, the effective rate
of tax imposed on the income from the sales of Product X is compared
against the effective rate of tax that would apply to that income if it
were earned in Country A, which would impose the highest effective rate
of tax on the sales income (30%). Because the effective rate of tax in
Country B with respect to the sales income (0%) is less than 90% of,
and at least 5 percentage points less than, the effective rate of tax
that would apply to such income in Country A (30%), Branch B, treated
as the remainder of FS pursuant to paragraph (b)(1)(ii)(c) of this
section, is treated as selling on behalf of Branch A. Further, for
purposes of determining''.
24. On page 10728, column 2, Sec. 1.954-3(b)(1)(ii)(c)(3)(f)
Example 5.(ii), lines 1 through 12 from the bottom of the paragraph,
the language ``company sales income. Since the location of
manufacturing of Product X is considered to be the location of Branch A
rather than Branch B, Branch B, treated as the remainder of FS, does
not qualify for the manufacturing exception from foreign base company
sales income contained in paragraph (a)(4) of this section. Since the
sale of Product X is for use, consumption, or disposition outside of
Country B, the income from the sale of Product X is foreign base
company sales income.'' is corrected to read ``company sales income.
Branch B, treated as the remainder of FS, must therefore independently
qualify for the manufacturing exception from foreign base company sales
income contained in paragraph (a)(4) of this section or the income from
the sale of Product X will be foreign base company sales income.''.
25. On page 10729, column 1, Sec. 1.954-3(b)(2)(ii)(a), lines 1
through 7 from the bottom of the paragraph, the language ``tested
against the effective rate of tax that would apply to such income if it
were earned in the jurisdiction of such other branch or similar
establishment or the remainder of the controlled foreign corporation
under Sec. 1.954-3(b)(1)(i)(b) or (ii)(b) of this section.'' is
corrected to read ``tested under the principles of Sec. 1.954-
3(b)(1)(i)(b) or (ii)(b) of this section against the effective rate of
tax that would apply to such income if it were earned in the
jurisdiction of such other branch or similar establishment or the
remainder of the controlled foreign corporation.''.
26. On page 10729, column 2, Sec. 1.954-3(b)(2)(ii)(c)(2) Example
1.(ii), line 6, the language ``Branch A (30%), the seller, the
remainder of'' is corrected to read ``Branch A (30%), the remainder
of''.
27. On page 10729, column 3, Sec. 1.954-3(b)(2)(ii)(c)(2) Example
3.(i), line 7 from the bottom of the column, the language ``persons.
100 percent of the articles sold'' is corrected to read ``persons. One
hundred percent of the articles sold''.
28. On page 10730, column 1, Sec. 1.954-3(b)(2)(ii)(c)(2) Example
3.(i), first paragraph of the column, line 10, the language ``Country,
but the income of Branch B for 1964'' is corrected to read ``country,
but the income of Branch B for 1964''.
29. On page 10730, column 1, Sec. 1.954-3(b)(2)(ii)(d), line 10,
the language ``the last sentence of paragraph (a)(6), the'' is
corrected to read ``paragraph (a)(6)(i), the''.
LaNita Van Dyke,
Chief, Publications and Regulations Branch, Legal Processing Division,
Associate Chief Counsel (Procedure and Administration).
[FR Doc. E8-8031 Filed 4-14-08; 8:45 am]
BILLING CODE 4830-01-P
