Transactions involving foreign tax credits | KPMG | US
Share with your friends

First Circuit: Economic substance of transactions involving foreign tax credits

Transactions involving foreign tax credits

The U.S. Court of Appeals for the First Circuit reversed a federal district court and concluded that the government was entitled to summary judgment in a case concerning the economic substance of certain transactions that involved the taxpayer’s claim for foreign tax credits.


Related content

The case is: Santander Holdings USA, Inc. v. United States, No. 16-1282 (1st Cir. December 16, 2016). Read the First Circuit’s decision [PDF 54 KB]

The tax credits at issue were claimed for taxes that had been arranged to be paid to the United Kingdom as part of a structured transaction (one that became the subject of heightened scrutiny from the IRS and that subsequently was forbidden by regulation). The district court awarded summary judgment to the taxpayer. The First Circuit reversed, stating its agreement with the Federal Circuit’s reasoning in a 2015 case, Salem Financial Inc. v. United States.

© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Request for proposal