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Friday, December 16, 2005

European LLC's Deemed Corporations for U.S. Purposes

Since the enactment of the check-the-box regulations, taxpayers have a substantial amount of flexibility in electing to characterize non-U.S. entities as “associations” (taxable as a corporation), or as pass-through entities (taxable as a partnership or sole proprietership). However, taxpayers do not have absolute discretion in this regard - certain listed entities are “per se” corporations that must almost always be taxable as a corporation.

The IRS has now updated its list of “per se” corporations. It now includes the European Union’s new business entity known as the Societas Europaea (SE), which is essentially a European LLC. Also now characterized as “per se” corporations are the Aktsiaselts of Estonia, the Akciju Sabiednba of Latvia, the Aktiengesellschaft of Liechtenstein, the Akcine Bendroves of Lithuania,and the Delniska Druzba of Slovenia.

T.D. 9235, December 16, 2005
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