On 21 December 2018, the Swiss Bankers Association sent a request to the U.S. Department of Treasury and the Internal Revenue Service in the U.S. (“IRS”) (Link). They request the IRS to clarify that “accidental” Controlled Foreign Corporations (“CFCs”) created solely through the repeal of Internal Revenue Code (IRC) Section 958(b)(4):
- will not be treated as US payers for purposes of Form 1099 reporting and backup withholding; and,
- will not be disqualified from the portfolio interest exemption due to their CFC status.
The Bankers Association requests the IRS to issue a respective guidance.