English to Serbian Bus/Financial Law: Taxation & Customs propisi o sprečavanju izbegavanja poreza

(nastavak teksta uz pitanje "conduit financing")
In some circumstances, instead of using a foreign affiliate as an intermediary for the FP-USA loan, FP might instead cause USA to establish a branch in FA’s jurisdiction (“DE”) and to treat that branch as an entity the separate existence of which is disregarded for U.S. tax purposes under the “check-the-box” regulations of Code section 7701. Using this structure relies on a form of regulatory arbitrage whereby (i) the loan between USA and DE is not recognized for U.S. tax purposes (because DE is treated as a branch of USA), but (ii) DE is permitted to claim the benefits of its jurisdiction’s tax treaty with the United States in accordance with Code section 894.
The finalized regulations may deny tax benefits otherwise available from U.S. tax treaties when a multi-party financing transaction is executed with a disregarded entity serving as an intermediary.