How US services rules affect non-US taxpayers
September 27, 2007
By Gianni De Robertis (Italy), Sean Foley (US), Jaap Reyneveld (The Netherlands), Sergio Schuindt (Brazil) and Tomoko Wada (Japan) of KPMG
Last summer, the US government issued new temporary regulations under Section 1.482-9T covering the intercompany provision of services. The temporary regulations are generally effective for US taxpayers for tax years beginning after December 31 2006. In Notice 2007-5, the IRS delayed the effective date of one part of the temporary regulations for one year. The practical effect of this delay is to extend the old cost safe-harbour rule under Treasury Regulation Section 1.482-2(b), with certain modifications, for another year, that is, for taxable years that begin between January 1 2007 and December 31 2007.
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