United States

Final Section 385 Regulations: Focus on U.S. Issuers, U.S. Base Erosion, and Documentation

TaxNewsFlash-United States, October 4, 2017 | Final Report: Treasury Regulations, Executive Order to Reduce Tax Burden

"Treasury ... plans to propose revoking the section 385 documentation regulations and replacing them with streamlined documentation requirements." Read more

The Treasury Department and IRS released on October 13, 2016, final and temporary section 385 regulations, addressing the treatment of related-party debt for U.S. tax purposes. These regulations had been proposed on April 4, 2016. While the final rules offer significant relief for U.S. multinational groups, and offer some, but less significant, relief for foreign multinational groups, all multinational groups may want to consider the regulations' potential application to their intragroup debtor-creditor relationships.

KPMG LLP's August 7, 2017 Comment Letter on Notice 2017-38 Relating to Treasury's Review of Tax Regulations Pursuant to Executive Order 13789

KPMG LLP's July 7, 2016 Comment Letter on the Proposed Regulations

U.S. Department of the Treasury

"Documentation regulations" under Reg. section 1.385-2 delayed by one-year | July 28, 2017

Read text of the final regulations and KPMG's Initial reactions to the section 385 final regulations | October 14, 2016

Read Section 385 final regulations: Intial reaction to insurance-specific provisions | October 14, 2016

The Final Debt-Equity Regulations: The Sky Is Not Falling
Feb. 20, 2017 | Tax Notes | The authors review the final and temporary section 385 regulations and highlight the key differences between those regulations and the proposed section 385 regulations.
Final Section 385 Regulations—Financial Reporting and Internal Control Considerations
Dec. 19, 2016 | This article discusses the potential financial reporting impacts of the final regulations, with a focus on new processes and internal controls that may be required.
KPMG Section 385 Reporter
Read about KPMG's technology solution that helps KPMG engagement teams deliver efficient section 385 services to our clients


Contact Ron Dabrowski
Ron Dabrowski

Principal, Washington National Tax, KPMG LLP
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