#### § 1.883-0 Outline of major topics.

This section lists the major paragraphs contained in §§ 1.883-1 through 1.883-5.

## § 1.883-1 Exclusion of income from the international operation of ships or aircraft.

(a) General rule.

(b) Qualified income.

(c) Qualified foreign corporation.

(1) General rule.

(2) Stock ownership test.

(3) Substantiation and reporting requirements.

(i) General rule.

(ii) Further documentation.

(A) General rule.

(B) Names and permanent addresses of certain shareholders.

(4) Commissioner's discretion to cure defects in documentation.

(d) Qualified foreign country.

(e) Operation of ships or aircraft.

(1) General rule.

(2) Pool, partnership, strategic alliance, joint operating agreement, code-sharing arrangement or other joint venture.

(3) Activities not considered operation of ships or aircraft.

(4) Examples.

(5) Definitions.

(i) Bareboat charter.

(ii) Code-sharing arrangement.

(iii) Dry lease.

(iv) Entity.

(v) Fiscally transparent entity under the income tax laws of the United States.

(vi) Full charter.

(vii) Nonvessel operating common carrier.

(viii) Space or slot charter.

(ix) Time charter.

(x) Voyage charter.

(xi) Wet lease.

(f) International operation of ships or aircraft.

(1) General rule.

(2) Determining whether income is derived from international operation of ships or aircraft.

(i) International carriage of passengers.

(A) General rule.

(B) Round trip travel on ships.

(ii) International carriage of cargo.

(iii) Bareboat charter of ships or dry lease of aircraft used in international operation of ships or aircraft.

(iv) Charter of ships or aircraft for hire.

(g) Activities incidental to the international operation of ships or aircraft.

(1) General rule.

(2) Activities not considered incidental to the international operation of ships or aircraft.

(3) Other Services. [Reserved]

(4) Activities involved in a pool, partnership, strategic alliance, joint operating agreement, code-sharing arrangement or other joint venture.

(h) Equivalent exemption.

(1) General rule.

(2) Determining equivalent exemptions for each category of income.

(3) Special rules with respect to income tax conventions.

(i) Countries with only an income tax convention.

(ii) Countries with both an income tax convention and an equivalent exemption.

(A) General rule.

(B) Special rule for claiming simultaneous benefits under section 883 and an income tax convention.

(iii) Participation in certain joint ventures.

(iv) Independent interpretation of income tax conventions.

(4) Exemptions not qualifying as equivalent exemptions.

(i) General rule.

(ii) Reduced tax rate or time limited exemption.

(iii) Inbound or outbound freight tax.

(iv) Exemptions for limited types of cargo.

(v) Territorial tax systems.

(vi) Countries that tax on a residence basis.

(vii) Exemptions within categories of income.

(i) Treatment of possessions.

(j) Expenses related to qualified income.

## § 1.883-2 Treatment of publicly-traded corporations.

(a) General rule.

(b) Established securities market.

(1) General rule.

(2) Exchanges with multiple tiers.

(3) Computation of dollar value of stock traded.

(4) Over-the-counter market.

(5) Discretion to determine that an exchange does not qualify as an established securities market.

(c) Primarily traded.

(d) Regularly traded.

(1) General rule.

(2) Classes of stock traded on a domestic established securities market treated as meeting trading requirements.

(3) Closely-held classes of stock not treated as meeting trading requirements.

(i) General rule.

(ii) Exception.

(iii) Five-percent shareholders.

(A) Related persons.

(B) Investment companies.

(4) Anti-abuse rule.

(5) Example.

(e) Substantiation that a foreign corporation is publicly traded.

(1) General rule.

(2) Availability and retention of documents for inspection.

(f) Reporting requirements.

## § 1.883-3 Treatment of controlled foreign corporations.

(a) General rule.

(b) Qualified U.S. person ownership test.

(1) General rule.

(2) Qualified U.S. person.

(3) Treatment of bearer shares.

(4) Ownership attribution through certain domestic entities.

(5) Examples.

(c) Substantiation of CFC stock ownership.

(1) In general.

(2) Ownership statements from qualified U.S. persons.

(3) Ownership statements from intermediaries.

(4) Three-year period of validity.

(5) Availability and retention of documents for inspection.

(d) Reporting requirements.

## § 1.883-4 Qualified shareholder stock ownership test.

(a) General rule.

(b) Qualified shareholder.

(1) General rule.

(2) Residence of individual shareholders.

(i) General rule.

(ii) Tax home.

(3) Certain income tax convention restrictions applied to shareholders.

(4) Not-for-profit organizations.

(5) Pension funds.

(i) Pension fund defined.

(ii) Government pension funds.

(iii) Nongovernment pension funds.

(iv) Beneficiary of a pension fund.

(c) Rules for determining constructive ownership.

(1) General rules for attribution.

(2) Partnerships.

(i) General rule.

(ii) Partners resident in the same country.

(iii) Examples.

(3) Trusts and estates.

(i) Beneficiaries.

(ii) Grantor trusts.

(4) Corporations that issue stock.

(5) Taxable nonstock corporations.

(6) Mutual insurance companies and similar entities.

(7) Computation of beneficial interests in nongovernment pension funds.

(d) Substantiation of stock ownership.

(1) General rule.

(2) Application of general rule.

(i) Ownership statements.

(ii) Three-year period of validity.

(3) Special rules.

(i) Substantiating residence of certain shareholders.

(ii) Special rule for registered shareholders owning less than one percent of widely-held corporations.

(iii) Special rule for beneficiaries of pension funds.

(A) Government pension fund.

(B) Nongovernment pension fund.

(iv) Special rule for stock owned by publicly-traded corporations.

(v) Special rule for not-for-profit organizations.

(vi) Special rule for a foreign airline covered by an air services agreement.

(vii) Special rule for taxable nonstock corporations.

(viii) Special rule for closely-held corporations traded in the United States.

(4) Ownership statements from shareholders.

(i) Ownership statements from individuals.

(ii) Ownership statements from foreign governments.

(iii) Ownership statements from publicly-traded corporate shareholders.

(iv) Ownership statements from not-for-profit organizations.

(v) Ownership statements from intermediaries.

(A) General rule.

(B) Ownership statements from widely-held intermediaries with registered shareholders owning less than one percent of such widely-held intermediary.

(C) Ownership statements from pension funds.

(*1*) Ownership statements from government pension funds.

(*2*) Ownership statements from nongovernment pension funds.

(*3*) Time for making determinations.

(D) Ownership statements from taxable nonstock corporations.

(5) Availability and retention of documents for inspection.

(e) Reporting requirements.

## § 1.883-5 Effective dates.

(a) General rule.

(b) Election for retroactive application.

(c) Transitional information reporting rule.

(d) Effective/applicability dates.

[T.D. 9087, 68 FR 51399, Aug. 26, 2003, as amended by T.D. 9332, 72 FR 34604, June 25, 2007; T.D. 9502, 75 FR 56861, Sept. 17, 2010]