In our whitepaper, The Expansion of “United States” Taxpayers: How the TCJA Drags Unassuming Foreign Companies and Individuals under its Scope, we analyze how recent U.S. tax law greatly expand who may be subject to U.S. taxation regardless of their foreign status. Additionally, in this blog series we illustrated how the Code’s definition of ownership forces many foreign companies that had not previously been classified as controlled foreign corporations, to become CFCs. The Tax Cuts and Jobs Act of 2017 not only expanded the CFC classification, but it also expanded the consequences of holding an interest in a CFC.
Prior to the TCJA
Under the Code a CFC is required to pay tax on its Supbart F Income and income derived from U.S. investment properties.