This document contains final and temporary regulations relating to certain business entities included on the list of foreign business entities that are always classified as corporations for Federal tax purposes.
Effective Date: These regulations are effective on December 16, 2005.
Applicability Date: For the dates of applicability of these regulations, see §301.7701-2(e)(4).
On April 14, 2005, the IRS and Treasury Department published in the Federal Register temporary regulations (T.D. 9197, 2005-18 I.R.B. 985 [70 FR 19697]) and a notice of proposed rulemaking (REG-148521-04, 2005-18 I.R.B. 995 [70 FR 19722] under section 7701 of the Internal Revenue Code (Code). The regulations added certain foreign business entities to the list of entities in §301.7701-2(b)(8) (the per se corporation list) in response to the adoption by the Council of the European Union of a Council Regulation (2157/2001 2001 O.J. (L 294)) permitting a new business entity, the European public limited liability company (Societas Europaea or SE). Specifically, the temporary and proposed regulations added the SE, Estonian Aktsiaselts, Latvian Akciju Sabiedriba, Lithuanian Akcine Bendroves, Slovenian Delniska Druzba, and Liechtenstein Aktiengesellschaft to the per se list of corporations. For further background, see T.D. 9197, 2005-18 I.R.B. 985 [70 FR 19697] and Notice 2004-68, 2004-2 C.B. 706.
No substantive comments were received regarding the temporary and proposed regulations. Accordingly, these regulations finalize the proposed regulations without modification and revise the temporary regulations to cross reference to the new provisions.
It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative and Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and, because these regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Code, the Notice of Proposed Rulemaking preceding the final regulations was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business.
Accordingly, 26 CFR part 301 is amended as follows:
Paragraph 1. The authority citation for part 301 continues to read, in part, as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 301.7701-2 is amended by:
1. Adding six entries in alphabetical order to paragraph (b)(8)(i).
2. Removing paragraph (b)(8)(vi).
3. Adding paragraphs (e)(3) and (4).
The additions read as follows:
* * * * *
(b) * * *
(8) * * *
(i) * * *
Estonia, Aktsiaselts
European Economic Area/European Union, Societas Europaea
* * * * *
Latvia, Akciju Sabiedriba
* * * * *
Liechtenstein, Aktiengesellschaft
Lithuania, Akcine Bendroves
* * * * *
Slovenia, Delniska Druzba.
* * * * *
(e) * * *
(3) [Reserved]. For further guidance, see §301.7701-2T(f).
(4) The reference to the Estonian, Latvian, Liechtenstein, Lithuanian, and Slovenian entities in paragraph (b)(8)(i) of this section applies to such entities formed on or after October 7, 2004, and to any such entity formed before such date from the date any person or persons, who were not owners of the entity as of October 7, 2004, own in the aggregate a 50 percent or greater interest in the entity. The reference to the European Economic Area/European Union entity in paragraph (b)(8)(i) of this section applies to such entities formed on or after October 8, 2004.
Par. 3. Section 301.7701-2T is amended by:
1. Removing paragraph (b)(8)(vi).
2. Revising paragraph (e)(3).
The revision reads as follows:
* * * * *
(e) * * *
(3) [Reserved]. For further guidance, see §301.7701-2(e)(4).
* * * * *
Mark E. Matthews,Approved December 8, 2005.
Eric Solomon,The Internal Revenue Bulletin is produced and published by the Internal Revenue Service and contains IRS pronouncements affecting tax analysis under the Code and the Regulations, including but not limited to Revenue Procedures, Revenue Rulings, Notices and Announcements. Access the IRS site at https://www.irs.gov/help/irsgov-accessibility for information concerning accessibility of IRS materials. While every effort has been made to ensure that the IRB database files available through the TouchTax application are accurate, those using TouchTax for legal research should verify their results against the printed versions of the IRBs available from the IRS.