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International Transfer - Passive Source Code Mapping for Foreign Income Inclusions
For tax years 2010 and later, the
Passive Inclusion Mapping
screen includes passive foreign income inclusions in the FTC High Taxed Kick-out calculation. It is available in the Home page under Charts > International Sourcing > Passive Inclusion Mapping
.You can use this screen to associate user-defined passive source codes with a Subpart F Type of 0 (Not Applicable) to specific foreign legal entities. During Subpart F calculations, any passive foreign income inclusions along with any related deemed paid foreign tax credits from an assigned foreign entity will be related to the mapped user-defined passive source code, rather than to the system-defined passive source code of 3. Foreign income inclusions and tax credits are then available for transfer to the domestic (Foreign Tax Credit) parents during the tax accounting system (TAS) compute.
If you do not want to include any passive foreign income inclusions from a related foreign entity in the FTC High Taxed Kick-out calculation, then do not make any foreign entity mappings in this screen.
Income Inclusion Transfer Source Code Mapping Screen
After you make changes in the
Passive Inclusion Mapping
screen, you must run Subpart F computes to update the Foreign Income Inclusion Reports and transfer the data to the domestic parents. Run the TAS Compute to update the domestic parents' tax adjustments, sourcing, and Foreign Income Taxes with the new results from the Subpart F calculations.The
Available Foreign Entities
list displays all entities meeting the following criteria (regardless of the number and type of binders present for each entity):- International Filing Type = Foreign Entity; and
- Entity Type = Parent, Subsidiary, Divisional Consolidation, Corporate Single Entity
You can filter the entity list to display only those entities with Income Tax binders in a specific tax year (2010 and later).
Mapping Passive Inclusion Source Codes
- On the menu bar, selectCharts > International Sourcing > Passive Inclusion Mapping.
- Select theYearfrom the dropdown.
- Select theDisplay only foreign entities with selected year bindersoption.TheUser Defined Passive Source Codelist displays all user-defined passive source codes in the selected year that are defined as having a:
- FTC Type = 3 (Passive Income); and
- Subpart F Type = 0 (Not Applicable)
- To associate (map) a foreign entity to a passive source code, in theAvailable Foreign Entitiespane, select the checkbox next to the appropriate entity(s).
- In theUser Defined Passive Source Codespane, select the box next to the applicable source code. You can only map source codes one at a time.
- ClickMap.
The foreign entity appears under the selected source code in the
User Defined Passive Source Codes
list.Removing Foreign Entities
To remove a foreign entity from a passive source code:
- In theUser Defined Passive Source Codespane, expand the source code list to reveal the foreign entities mapped to it by selecting the left arrow next to the description or the button at the top of the list box to expand all source codes.
- Select the
next to the entity(s) you want to remove or check the box next to the passive source code to remove all entities mapped to that code. The foreign entities are removed from the User Defined Passive Source Codespane and are displayed in theForeign Entitieslist.
Importing Mappings
- Import affects just the selected tax year. Two options are available for the International Transfer Passive Source Code Mapping import,Add and replace entriesandReplace all entries.
- The import template requires two fields, Company Number and Source Code Number.
- Validations exist to ensure that the file contents meet the requirements stated for theAvailable Foreign EntitiesandUser Defined Passive Source Codesboxes in the data entry screen.
- Replace all entriesremoves the mapping for any foreign entities currently associated with passive source codes – the equivalent of selecting theRemove Alloption in the data entry screen. The import process then cross-references the foreign entities in the file to the indicated passive source codes. If the passive source code column is blank for a foreign entity, that foreign entity is ignored.Add and replace entriesupdates the existing mapping for only those foreign entities in the import file. If the passive source code column is blank for a foreign entity, the import process removes the mapping for that foreign entity.
Exporting Mappings
Click
Export
to save the foreign entity list and existing passive source code mappings to an *.xlsx file. You can update this file and import it into the application.Company No. | Company Name | Source Code | Description |
|---|---|---|---|
FGNCFC101 | Foreign CFC 101 | ||
FGNCFC102 | Foreign CFC 102 | 10011 | Passive Income 1 |
FGNCFC103 | Foreign CFC 103 | ||
FGNCFC104 | Foreign CFC 104 | 10032 | Passive Income 3B |
FGNCFC105 | Foreign CFC 105 | 10032 | Passive Income 3B |
FGNCFC106 | Foreign CFC 106 | ||
HTFGN201 | Foreign Entity 201 |
Printing Mappings
- On the Passive Inclusion Mapping screen, selectPrint.
- The report PDF file downloads to your machine.
Mapping and the Foreign Income Inclusion Report
After Subpart F calculations, passive foreign income inclusions along with any related deemed paid foreign tax credits from an assigned foreign entity are reported on the Foreign Income Inclusion Reports under the mapped user-defined passive source code, rather than to the system-defined passive source code 3. Any foreign entities that are not cross-referenced in the Income Inclusion Passive Source Code Mapping screen will continue to use passive source code 3.
Information from the Income Inclusion Report can be transferred to the domestic (Foreign Tax Credit) parents during TAS Compute to the Sourcing Workpaper and the
Foreign Income Taxes
screen.Rollover from Tax Year 2010 to 2011 or Later
During International Enterprise rollover from tax year 2010 to 2011 (or later), all foreign entity to passive source code mappings in the Income Inclusion Passive Source Code Mapping screen will be copied to the new year.
Interaction with the Source Code Definition Screen
You cannot change the FTC Type or Subpart F Type in the
Source Code Definition
screen for a passive source code with mapped entities in the Income Inclusion Transfer Source Code Mapping
screen until you remove the mapping.