Par. 6. Section 1.964-1 is amended by: 1. Revising the first sentence of paragraph (c)(2); 2. Removing the language “domestic shareholders” in the first sentence of paragraph (c)(3)(ii) and adding “United States persons” in its place; 3. Revising paragraph (c)(3)(iii); 4. Removing the language “noncontrolled section 902 corporation” in paragraphs (c)(4)(i)(B) and (c)(4)(ii) and adding “noncontrolled foreign corporation” in its place; 5. Revising paragraph (c)(5)(ii); 6. Redesignating paragraph (c)(8) as paragraph (c)(9); 7. Adding a new paragraph (c)(8); and 8. In paragraph (d): i. Revising the heading; ii. Removing “Paragraphs (c)(1)(v) through (c)(6),” “26 CFR 1.964-1T(c)(1)(v) through (c)(6),” and “paragraphs (c)(1)(v) through (c)(6)” everywhere they appear and adding “Paragraphs (c)(1)(v) and (vi) and (c)(2) through (6),” “26 CFR 1.964-1T(c)(1)(v) and (vi) and (c)(2) through (6),” and “paragraphs (c)(1)(v) and (vi) and (c)(2) through (6)” in their places, respectively; and iii. Adding two sentences to the end of the paragraph. The revisions and additions read as follows:
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(c) * * *
(2) * * * For the first taxable year of a foreign corporation in which such foreign corporation first qualifies as a controlled foreign corporation (as defined in section 957 or 953) or a foreign corporation (other than a controlled foreign corporation as defined in section 957 or 953) as to which a United States person that is a United States shareholder (within the meaning of section 951(b)) owns stock (within the meaning of section 958(a)) (such corporation, a “noncontrolled foreign corporation”), any method of accounting or taxable year allowable under this section may be adopted, and any election allowable under this section may be made, by such foreign corporation or on its behalf notwithstanding that, in previous years, its books or financial statements were prepared on a different basis, and notwithstanding that such election is required by the Code or regulations in this chapter to be made in a prior taxable year. * * *
(3) * * *
(iii) Notice —(A) In general. Except as otherwise provided in paragraph (c)(3)(iii)(B) of this section, on or before the filing date described in paragraph (c)(3)(ii) of this section, the controlling domestic shareholders must provide written notice of the election made or the adoption or change of method or taxable year effected to all other persons known by them to be United States persons that own (within the meaning of section 958(a)) stock of the foreign corporation ( domestic shareholders ) and to any other United States person that is a “Category 4 filer” of Form 5471, “Information Return of U.S. Persons With Respect to Certain Foreign Corporations,” with respect to the foreign corporation (that is, certain United States persons that control, within the meaning of section 6038(e), the foreign corporation). Thus, for example, this notice is required to be provided to domestic shareholders that own (within the meaning of section 958(a)) stock in the foreign corporation through one or more domestic partnerships. The notice required in this paragraph (c)(3)(iii)(A) must set forth the name, country of organization, and U.S. employer identification number (if applicable) of the foreign corporation, and the names, addresses, and stock interests of the controlling domestic shareholders. Such notice must also describe the nature of the action taken on behalf of the foreign corporation and the taxable year for which made, and identify a designated shareholder that retains a jointly executed consent confirming that such action has been approved by all of the controlling domestic shareholders and containing the signature of a principal officer of each such shareholder (or its common parent). However, the failure of the controlling domestic shareholders to provide such notice to a person required to be notified does not invalidate the election made or the adoption or change of method or taxable year effected.
(B) Special rule for domestic partnerships. A controlling domestic shareholder will be deemed to satisfy the notice requirement of paragraph (c)(3)(iii)(A) of this section with respect to any domestic shareholder that is a partner in a domestic partnership by providing notice to a domestic partnership (known to the controlling domestic shareholder) through which the domestic shareholder owns stock of the foreign corporation, instead of to the domestic shareholder.
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(5) * * *
(ii) Noncontrolled foreign corporations. For purposes of this paragraph (c), the controlling domestic shareholders of a noncontrolled foreign corporation are its majority domestic shareholders. The majority domestic shareholders of a noncontrolled foreign corporation are those United States shareholders (within the meaning of section 951(b)) that own (within the meaning of section 958(a)) stock in the noncontrolled foreign corporation and that, in the aggregate, own (within the meaning of section 958(a)), or are considered as owning by applying the rules of section 958(b), more than 50 percent of the combined voting power of all of the voting stock of the noncontrolled foreign corporation that is owned by all United States shareholders that own (within the meaning of section 958(a)), or are considered as owning by applying the rules of section 958(b), stock of the noncontrolled foreign corporation.
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(8) Stock owned through domestic partnerships. See § 1.958-1(d) for rules regarding the ownership of stock of a foreign corporation through a domestic partnership for purposes of paragraph (c) of this section and for purposes of any provision that specifically applies by reference to paragraph (c) of this section.
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(d) Applicability dates. * * * Notwithstanding the preceding sentences in this paragraph (d), paragraphs (c)(2), (c)(3)(ii) and (iii), (c)(4)(i)(B), (c)(4)(ii), (c)(5)(ii), and (c)(8) of this section apply to taxable years of foreign corporations beginning on or after [date of publication of the Treasury decision adopting these rules as final regulations in the Federal Register ], and to taxable years of United States persons in which or with which such taxable years end. For taxable years of foreign corporations beginning before [date of publication of the Treasury decision adopting these rules as final regulations in the Federal Register ], and to taxable years of foreign United States persons in which or with which such taxable years end, see § 1.964-1(c)(2), (c)(3)(ii) and (iii), (c)(4)(i)(B), (c)(4)(ii), and (c)(5)(ii) as in effect and contained in 26 CFR part 1, as revised April 1, 2021.