Company: BIPC
Filing Date: 2025-03-24
Form Type: 20-F
Source: 0001628280-25-014377
Chunk: 329

Company: Brookfield Infrastructure Corp
Filing Date: 2025-03-24
Form: 20-F
Item: Item 10
Chunk 329
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 a Section 871(m) transaction is treated as directly referencing the assets of a partnership that holds significant investments in certain securities (such as stock of a U. S. corporation). The partnership indirectly holds stock of a U. S. corporation through Holding LP, and the exchangeable shares are intended to be structured so that distributions are identical to distributions on units. Accordingly, the contractual arrangements relating to the exchangeable shares could be subject to Section 871(m) of the U. S. Internal Revenue Code, as discussed below.

Whether U. S. withholding tax applies with respect to a Section 871(m) transaction depends, in part, on whether it is classified for purposes of Section 871(m) of the U. S. Internal Revenue Code as a “simple” contract or “complex” contract. No direct authority addresses whether the contractual arrangements relating to the exchangeable shares constitute a simple contract or a complex contract. Our company intends to take the position and believes that such contractual arrangements do not constitute a simple contract. In such case, under Treasury Regulations, as modified by an IRS Notice, such contractual arrangements should not be subject to Section 871(m) of the U. S. Internal Revenue Code before January 1, 2027, and no portion of a distribution made on exchangeable shares before such date should be subject to U. S. withholding tax by reason of treatment as a dividend equivalent under Section 871(m). For distributions made on exchangeable shares on or after January 1, 2027, Section 871(m) of the U. S. Internal Revenue Code will apply if the contractual arrangements relating to the exchangeable shares meet a “substantial equivalence” test. If this is the case, U. S. federal withholding tax (generally at a rate of 30%) is expected to apply to any portion of a distribution on exchangeable shares that is treated as a dividend equivalent and paid on or after January 1, 2027.

This 30% withholding tax may be reduced or eliminated under the U. S. Internal Revenue Code or an applicable income tax treaty, provided that the Non-U. S. Holder properly certifies its eligibility by providing an IRS Form W-8. If, notwithstanding the foregoing, our company is unable to accurately or timely determine the tax status of a Non-U. S. Holder for purposes of establishing whether reduced rates of withholding apply, then U. S. withholding tax at a rate of 30% may apply to any portion of a distribution on exchangeable