Repatriated earnings under sec. 965: using the safe-harbor test in 2007 to ease compliance reporting and protect tax benefits.

Tax Adviser, The, August, 2007 by Fornaro, James M.; Lucido, Peter D.

U.S. multinational corporations repatriated billions of dollars in earnings from foreign subsidiaries to the U.S. under Sec. 965 during the time such repatriation was allowed. Companies that took advantage of this unique opportunity benefited from the temporary 85% dividends-received deduction (DRD) applied to qualifying dividends. To protect these generous tax benefits, companies must comply with annual reporting requirements and abide by the statute's somewhat flexible reinvestment guidelines. During 2007, it is especially important for corporations to examine the status of their plans to ensure that at least 60% of those earnings have been reinvested in qualified projects by the end of the year. This item recaps the key features of Sec. 965, describes the related...

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