Monday, May 20, 2013

PPL Corp. v. Commissioner

Tax: tax credit: Internal Revenue Code §901(b)(1), which states that any “income, war profits, and excess profits taxes” paid overseas are creditable against U. S. income taxes; in 1997, the United Kingdom (U. K.), newly under Labour Party rule, imposed a one-time “windfall tax” on 32 U. K. companies privatized between 1984 and 1996 by the Conservative government. The com­panies had been sold to private parties through an initial sale of shares, known as a “flotation.” Some of the companies were required to continue providing services for a fixed period at the same rates they had offered under government control. Many of those companies became dramatically more efficient and earned substantial profits in the process. Petitioner PPL Corporation (PPL), part owner of a privatized U. K. company subject to the windfall tax, claimed a credit for its share of the bill in its 1997 federal income-tax return; the U. K. tax is creditable under §901; foreign tax creditability depends not on the way a foreign Government characterizes its tax but on whether the tax, if enacted in the U. S., would be an income, war profits, or excess prof­its tax; the U. K. windfall tax’s predominant character is that of an ex­cess profits tax, a category of income tax in the U. S. sense; the windfall tax is nothing more than a tax on actual profits above a threshold (U.S.S.Ct., 20.05.13, PPL Corp. v. Commissioner, J. Thomas, unanimous).

Crédit d'impôts : les impôts sur le revenu au sens large payés à l'étranger peuvent être déduits de l'impôt U.S. sur le revenu. Savoir si un impôt payé à l'étranger peut être ainsi déduit se détermine en se demandant comment un tel impôt étranger serait caractérisé aux U.S. si une loi U.S. devait être promulguée à ce sujet. Le cas d'espèce (imposition suite aux privatisations au Royaume Uni) permet d'obtenir un crédit d'impôt.

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