Difference between revisions of "FAR 52.209-10 - Prohibition on Contracting with Inverted Domestic Corporations"
Line 16: | Line 16: | ||
'''“Inverted domestic corporation”''' means a foreign incorporated entity which is treated as an inverted domestic corporation under 6 U.S.C. 395(b), i.e., a corporation that used to be incorporated in the United States, or used to be a partnership in the United States, but now is incorporated in a foreign country, or is a subsidiary whose parent corporation is incorporated in a foreign country, that meets the criteria specified in 6 U.S.C. 395(b), applied in accordance with the rules and definitions of 6 U.S.C. 395(c). An inverted domestic corporation as herein defined does not meet the definition of an inverted domestic corporation as defined by the Internal Revenue Code at 26 U.S.C. 7874. | '''“Inverted domestic corporation”''' means a foreign incorporated entity which is treated as an inverted domestic corporation under 6 U.S.C. 395(b), i.e., a corporation that used to be incorporated in the United States, or used to be a partnership in the United States, but now is incorporated in a foreign country, or is a subsidiary whose parent corporation is incorporated in a foreign country, that meets the criteria specified in 6 U.S.C. 395(b), applied in accordance with the rules and definitions of 6 U.S.C. 395(c). An inverted domestic corporation as herein defined does not meet the definition of an inverted domestic corporation as defined by the Internal Revenue Code at 26 U.S.C. 7874. | ||
+ | ===Title 6 § 395. Prohibition on contracts with corporate expatriates=== | ||
+ | '''(a)''' In general The Secretary may not enter into any contract with a foreign incorporated entity which is treated as an inverted domestic corporation under subsection (b) of this section, or any subsidiary of such an entity. | ||
+ | |||
+ | '''(b)''' Inverted domestic corporation For purposes of this section, a foreign incorporated | ||
+ | entity shall be treated as an inverted domestic corporation if, pursuant to a plan (or a series of related transactions)— | ||
+ | |||
+ | |||
+ | :(1) the entity completes before, on, or after November 25, 2002, the direct or indirect acquisition of substantially all of the properties held directly or indirectly by a domestic corporation or substantially all of the properties constituting a trade or business of a domestic | ||
+ | partnership; | ||
+ | |||
+ | :(2) after the acquisition at least 80 percent of the stock (by vote or value) of the entity is | ||
+ | held— | ||
+ | |||
+ | ::(A) in the case of an acquisition with respect to a domestic corporation, by former shareholders of the domestic corporation by reason of holding stock in the domestic corporation; or | ||
+ | |||
+ | ::(B) in the case of an acquisition with respect to a domestic partnership, by former partners of the domestic partnership by reason of holding a capital or profits interest in the domestic partnership; and | ||
+ | |||
+ | :(3) the expanded affiliated group which after the acquisition includes the entity does not | ||
+ | have substantial business activities in the foreign country in which or under the law of | ||
+ | which the entity is created or organized when compared to the total business activities of | ||
+ | such expanded affiliated group. | ||
+ | |||
+ | ===Definitions, cont.=== | ||
'''“Subsidiary”''' means an entity in which more than 50 percent of the entity is owned— | '''“Subsidiary”''' means an entity in which more than 50 percent of the entity is owned— | ||
*(1) Directly by a parent corporation; or | *(1) Directly by a parent corporation; or |
Revision as of 14:05, 23 February 2015
Prescribed in 9.108-5(b) | ||
Effective Date: | 1 May 2012 | |
Clause or Provision: | Clause | |
Provision or Clause Number: | 52.209-10 - Prohibition on Contracting with Inverted Domestic Corporations | |
Principle Type And/Or Purpose of Contract: | ||
Required: | ||
Applicable: | Time and Materials/Labor Hour; | |
Optional: | ||
Subject: | Inverted Domestic Corporations | |
ProcurementType: | ||
Contract Threshold: | ||
Prescription Overview: |
Prescription(b) Include the clause at 52.209-10, Prohibition on Contracting with Inverted Domestic Corporations, in each solicitation and contract for the acquisition of products or services (including construction).
| |
Clause Overview: |
Clause(a) DefinitionsAs used in this clause— “Inverted domestic corporation” means a foreign incorporated entity which is treated as an inverted domestic corporation under 6 U.S.C. 395(b), i.e., a corporation that used to be incorporated in the United States, or used to be a partnership in the United States, but now is incorporated in a foreign country, or is a subsidiary whose parent corporation is incorporated in a foreign country, that meets the criteria specified in 6 U.S.C. 395(b), applied in accordance with the rules and definitions of 6 U.S.C. 395(c). An inverted domestic corporation as herein defined does not meet the definition of an inverted domestic corporation as defined by the Internal Revenue Code at 26 U.S.C. 7874. Title 6 § 395. Prohibition on contracts with corporate expatriates(a) In general The Secretary may not enter into any contract with a foreign incorporated entity which is treated as an inverted domestic corporation under subsection (b) of this section, or any subsidiary of such an entity. (b) Inverted domestic corporation For purposes of this section, a foreign incorporated entity shall be treated as an inverted domestic corporation if, pursuant to a plan (or a series of related transactions)—
partnership;
held—
have substantial business activities in the foreign country in which or under the law of which the entity is created or organized when compared to the total business activities of such expanded affiliated group. Definitions, cont.“Subsidiary” means an entity in which more than 50 percent of the entity is owned—
| |
Important Notes/Requirements: | ||
Subcontract Threshold: | ||
Incorporated by Reference: | Yes | |
Uniform Contract Format: | ||
Editor: | Marshall |
Personal notes.