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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
use a separate Schedule A (Form 8975) for “other country”
using the tax jurisdiction code “OC.” In either case, you
should include in Part III of Schedule A (Form 8975) the
name of the specific constituent entity and the jurisdiction
where the constituent entity is located.
When you enter a country code in Schedule A (Form
8975), Part I, the financial and employee information
in Part I, the constituent entity information in Part II,
and the additional information in Part III, must pertain to the
constituent entities that are tax resident in that jurisdiction.
In Part I, you will provide the aggregate amounts for all of
the constituent entities listed in Part II.
Lines 1a through 1c. On line 1a, enter the aggregate
revenues of the constituent entities listed in Part II that are
generated from transactions with those that are not
constituent entities in your group. On line 1b, enter the
aggregate revenues of the constituent entities listed in Part II
that are generated from transactions with other constituent
entities in your group. On line 1c, enter the total aggregate
revenues of the constituent entities listed in Part II.
The term “revenue” includes all amounts of revenue,
including revenue from sales of inventory and property,
services, royalties, interest, and premiums.
Revenue does not include payments received from other
constituent entities in your group that are treated as
dividends in the payor's tax jurisdiction of residence.
Distributions and remittances from your constituent entities
that are partnerships, other fiscally transparent entities, or
permanent establishments are not considered revenue of the
recipient-owner.
Revenue also does not include imputed earnings or
deemed dividends from other constituent entities in your
group that are taken into account solely for tax purposes and
that otherwise would be included as revenue by a constituent
entity.
For a constituent entity that is an exempt organization,
revenue means only revenue that is reflected in unrelated
business taxable income. See Regulations section
1.6038-4(d)(3)(ii).
Line 2. Enter the aggregate profit or loss before income tax
of the constituent entities listed in Part II.
Consistent with the definition of revenue, profit or loss
before income tax does not include payments received from
other constituent entities in your group that are treated as
dividends in the payor's tax jurisdiction.
Note. An amount representing all or part of a constituent
entity's profit that is required or permitted for financial
reporting purposes to be included in the profit before tax of
another constituent entity in the group should be treated in
the same way as dividends from other constituent entities
and excluded from revenue and profit or loss before income
tax. This instruction does not apply where a constituent entity
includes in profit before tax for financial reporting purposes
an amount representing all or part of the profit of another
constituent entity in the group that is fiscally transparent.
Line 3. Enter the aggregate amount of income tax paid on a
cash basis to all tax jurisdictions by the constituent entities
listed in Part II and any taxes withheld on payments received
by the constituent entities listed in Part II.
Taxes paid should include taxes paid in cash by a
constituent entity listed in Part II to its tax jurisdiction and to
all other tax jurisdictions. Taxes paid should include
withholding taxes paid by other entities (whether related or
unrelated) with respect to payments to the constituent
entities in Part II.
Example. If, during a reporting period, Company X
(resident in tax jurisdiction X) generates operating income in
tax jurisdiction X that is subject to corporate income tax in tax
jurisdiction X and earns interest income from a company in
tax jurisdiction Y subject to withholding tax in tax jurisdiction
Y, the taxes paid to tax jurisdiction X on the operating income
and the tax withheld on the interest and paid to tax
jurisdiction Y should be reported as part of the income taxes
paid by Company X on the Schedule A (Form 8975) for tax
jurisdiction X.
Line 4. Enter the aggregate of the total accrued current
income tax expense recorded on taxable profits or losses,
reflecting only operations in the relevant annual period and
excluding deferred taxes or provisions for uncertain tax
liabilities, for the constituent entities listed in Part II.
When a constituent entity listed in Part II is a permanent
establishment, the amounts on line 3 and line 4 should not
include the income tax paid or current income tax expense
accrued by the business entity of which the permanent
establishment would otherwise be a part in that business
entity’s tax jurisdiction of residence on the income derived by
the permanent establishment. For example, if Company X
(resident in tax jurisdiction X) has a permanent establishment
“PE Y” in tax jurisdiction Y that is considered a constituent
entity, and Company X pays tax jurisdiction X income tax on
income earned by PE Y, then that income tax paid should be
reflected on the Schedule A (Form 8975) for tax jurisdiction
X. However, income tax paid to tax jurisdiction Y on income
earned by PE Y is not included on the Schedule A (Form
8975) for tax jurisdiction X, but rather on the Schedule A
(Form 8975) for tax jurisdiction Y.
Line 5. Enter the aggregate amount of the stated capital of
the constituent entities listed in Part II.
The stated capital of a permanent establishment must be
reported in the tax jurisdiction of residence of the legal entity
of which it is a permanent establishment unless there is a
defined capital requirement in the permanent establishment
tax jurisdiction for regulatory purposes.
Line 6. Enter the aggregate of total accumulated earnings of
the constituent entities listed in Part II. However, the
accumulated earnings of a permanent establishment are
considered those of the legal entity of which it is a permanent
establishment and should be reported on the Schedule A
(Form 8975) for the tax jurisdiction of the legal entity owner.
Line 7. Enter the aggregate number of employees on a
full-time equivalent basis of the constituent entities listed in
Part II. The number of employees may be reported as of the
year-end, on the basis of average employment levels for the
year, or on any other basis consistently applied across tax
jurisdictions of your group and from year to year.
Reasonable rounding or approximation of the number of
employees is permissible, provided that such rounding or
approximation does not materially distort the relative
distribution of employees across the various tax jurisdictions
of your group. Consistent approaches should be applied from
year to year and across entities.
Line 8. Enter the aggregate of the net book value of tangible
assets of all the constituent entities listed in Part II. For
Instructions for Form 8975 (Rev.12-2020)
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