Foreign Branch Income Form 8993

Technical topics regarding tax preparation.
#1
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Would a US corporation that sells and installs equipment constitute a foreign branch?

There is no separate set of books and records for the foreign sales, and no office or other fixed place of business used by employees or officers of the U.S. person in carrying out the business.
 

#2
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How do they do installs without a permanent establishment?
 

#3
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So, if I sold a QuickBooks install to a client in Italy. Did the install over a couple of days and came back that would be considered a Foreign Branch?

What constitutes a Foreign Branch?
 

#4
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I thought original post said equipment, not software

In extremely general terms...

https://www.mossadams.com/articles/2019 ... n-branches
 

#5
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Sorry for the confusion, I was trying to make a simple example put messed up by saying software.

The example should be a US Corporation that on occasion sell and installs equipment in a foreign country. Would this be considered a Foreign Branch?

The article in the link does state “The purpose of the deduction is to provide a preferential tax rate to US exporters, so foreign branch income, which is earned offshore, isn’t eligible for the deduction.”
 

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Correct, the assumption by the statute drafters (I believe) was that operations through a branch would be eligible for foreign tax credits on the local tax paid

I think you’d need to determine whether a branch exists in the local country. I can’t tell from the example what connection the installers have with the foreign country. For example, the US would potentially treat (absent a treaty or other exclusion) a foreign corporation sending installers to the US as creating ECI.
 


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