The US Tax Court has held that a complex finance structure was in substance dividend payments taxable under the US tax law (Barnes Group, Inc. and Subsidiaries v. Commissioner of Internal Revenue, T.C. Memo. 2013-109, Docket No. 27211-09, 16 April 2013).
The case involved a US corporation that had a second-tier subsidiary in Singapore. The US corporation entered into a domestic and foreign finance structure, referred to as the reinvestment plan, for the purpose of using the Singaporean s…