This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

47439 

Vol. 71, No. 159 

Thursday, August 17, 2006 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

21 CFR Part 101 

[Docket No. 2001N–0548] (formerly 01N– 

0548) 

Food Labeling; Guidelines for 

Voluntary Nutrition Labeling of Raw 

Fruits, Vegetables, and Fish; 

Correction 

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Final rule; correction. 

SUMMARY: The Food and Drug 

Administration (FDA) is correcting a 

final rule that appeared in the Federal 

Register of July 25, 2006 (71 FR 42031). 

The document amended the voluntary 

nutrition labeling regulations by 

updating the names and the nutrition 

labeling values for the 20 most 

frequently consumed raw fruits, 

vegetables, and fish in the United States. 

The document published with incorrect 

units of measures for nutrients and an 

incorrect number in the Final 

Regulatory Impact Analysis section. 

This document corrects those errors. 

EFFECTIVE DATE: January 1, 2008. 

FOR FURTHER INFORMATION CONTACT: 

Mary Brandt, Center for Food Safety and 

Applied Nutrition (HFS–840), Food and 

Drug Administration, 5100 Paint Branch 

Pkwy., College Park, MD 20740, 301– 

436–1788. 

SUPPLEMENTARY INFORMATION: In FR Doc. 

06–6436, appearing in the Federal 

Register of Tuesday, July 25, 2006, the 

following corrections are made: 

1. On page 42037, in the third 

column, in the first full paragraph, in 

the fourth sentence, ‘‘total carbohydrate 

(34 g, 11 percent DV, from 21 mg, 7 

percent DV)’’ is corrected to read ‘‘total 

carbohydrate (34 g, 11 percent DV, from 

21 g, 7 percent DV)’’. 

2. On page 42037, in Table 1, in the 

second and fourth columns for Apples, 

Total Carbohydrate, ‘‘21 mg’’ and ‘‘34 

mg’’ are corrected to read ‘‘21 g’’ and 

‘‘34 g’’. 

3. On page 42038, in Table 1, in the 

fourth column for Tangerine, Sodium, 

‘‘0 g’’ is corrected to read ‘‘0 mg’’. 

4. On page 42038, in Table 1, in the 

second and fourth columns for 

Mushrooms, Sodium, ‘‘0 g’’ and ‘‘15 g’’ 

are corrected to read ‘‘0 mg’’ and ‘‘15 

mg’’. 

5. On page 42041, in the third 

column, in the first full paragraph, in 

the second sentence, ‘‘one-half of the 

48,000 to 68,000 stores’’ is corrected to 

read ‘‘one-half of the 48,000 to 63,000 

stores’’. 

6. On pages 42045 through 42047, in 

Appendices C and D, the unit of 

measure for Total Carbohydrate, ‘‘(mg)’’ 

is corrected to read ‘‘(g)’’; Appendices C 

and D to part 101 are corrected to read 

as follows: 

BILLING CODE 4160–01–S 


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Federal Register / Vol. 71, No. 159 / Thursday, August 17, 2006 / Rules and Regulations 47443 

Dated: August 10, 2006. 

Jeffrey Shuren, 

Assistant Commissioner for Policy. 

[FR Doc. 06–6957 Filed 8–16–06; 8:45 am] 

BILLING CODE 4160–01–C 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Parts 1 and 602 

[TD 9281] 

RIN 1545–BF70 

Determination of Interest Expense 

Deduction of Foreign Corporations 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Final and temporary 

regulations. 

SUMMARY: This document contains 

revised Income Tax Regulations relating 

to the determination of the interest 

expense deduction of foreign 

corporations and applies to foreign 

corporations engaged in a trade or 

business within the United States. This 

action is necessary to conform the rules 

to subsequent U.S. Income Tax Treaty 

agreements and to adopt changes to 

facilitate improved administrability for 

taxpayers and the IRS. 

DATES: Effective Date: These regulations 

are effective starting the tax year end for 

which the original tax return due date 

(including extensions) is after August 

17, 2006. 

Applicability Date: These regulations 

are applicable starting the tax year end 

for which the original tax return due 

date (including extensions) is after 

August 17, 2006. 

FOR FURTHER INFORMATION CONTACT: 

Gregory Spring or Paul Epstein, (202) 

622–3870 (not a toll-free number). 

SUPPLEMENTARY INFORMATION: 

Paperwork Reduction Act 

These temporary regulations are being 

issued without prior notice and public 

procedure pursuant to the 

Administrative Procedure Act (5 U.S.C. 

553). For this reason, the collection of 

information contained in these 

regulations has been reviewed and 

pending receipt and evaluation of 

public comments, approved by the 

Office of Management and Budget under 

control number 1545–2030. Responses 

to this collection of information are 

mandatory. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless the collection of information 

displays a valid control number. 

For further information concerning 

these collections of information, and 

where to submit comments on the 

collection of information and the 

accuracy of the estimated burden, and 

suggestions for reducing this burden, 

please refer to the preamble of the crossreferencing notice of proposed 

rulemaking published in this issue of 

the Federal Register. 

Books and records relating to a 

collection of information must be 

retained as long as their contents may 

become material in the administration 

of any internal revenue law. Generally, 

tax returns and tax return information 

are confidential, as required by 26 

U.S.C. 6103. 

Background 

On December 30, 1980, the Treasury 

Department and the IRS published final 

regulations TD 7749 [46 FR 16100 

(1981–1 CB 390) (see § 601.601(d)(2) of 

this chapter)] under section 882(c) of the 

Internal Revenue Code (Code) regarding 

the determination of a foreign 

corporation’s interest expense allocable 

to income effectively connected with 

the conduct of a trade or business 

within the United States. On March 8, 

1996, the Treasury Department and the 

IRS published final regulations TD 8658 

[61 FR 15891 (1996–1 CB 161) (see 

§ 601.601(d)(2) of this chapter)], and 

new proposed amendments INTL–0054–

95 [61 FR 28118 (1996–1 CB 844) (see 

§ 601.601(d)(2) of this chapter)]. The 

1996 amendments implemented certain 

statutory changes enacted in the Tax 

Reform Act of 1986, Public Law 99–514 

(100 Stat. 2085), and took account of 

developments in international financial 

markets. Comments were received on 

both the final and proposed 1996 

regulations. Since then, two new U.S. 

income tax treaties have entered into 

force that follow a different approach for 

determining the limit on profits 

attributable to a permanent 

establishment in a contracting state and 

for determining interest expense 

allowed in computing such profits. On 

July 14, 2005, the Treasury Department 

and the IRS published Notice 2005–53 

(2005–32 IRB 32, see § 601.601(d)(2)), 

which described those new treaties and 

announced the intention to update the 

final § 1.882–5 regulations to take 

account of changes in the international 

banking sector and to promote both ease 

of administration and certainty of 

application. 

These temporary regulations in this 

document implement Notice 2005–53, 

make effective one part of the 1996 

proposed regulations, make 

miscellaneous clarifications to the 1996 

final regulations, and modify the branch 

profits tax liability reduction regulations 

under § 1.884–1(e)(3). 

Explanation of Provisions 

The following discussion is divided 

into several parts. Section 1 of the 

following discussion summarizes Notice 

2005–53. Section 2 addresses the 

coordination of § 1.882–5 with U.S. tax 

treaties and discusses other 

modifications made by these temporary 

regulations to the three-step calculation 

of interest expense under § 1.882–5. 

Section 3 addresses changes made to the 

branch profits tax regulations under 

section 884. Section 4 then addresses 

miscellaneous technical modifications 

made by these temporary regulations 

that clarify application of the existing 

final regulations. Section 5 describes the 

effective date of these regulations. 

1. Notice 2005–53 

Notice 2005–53 provided guidance 

regarding the interaction of § 1.882–5 

and U.S. income tax treaties and 

explained that since the recent treaties 

with the United Kingdom and Japan 

entered into force, § 1.882–5 no longer 

provides the exclusive rules for 

determining the interest expense 

attributable to the business profits of a 

U.S. permanent establishment. The 

Notice also provided guidance and 

requested comments regarding certain 

potential modifications to certain 

elements of the three-step calculation of 

interest expense under § 1.882–5. More 

specifically, the Notice requested 

information regarding a possible 

increase to the existing 93-percent fixed 

ratio in Step 2 of the calculation and 

announced the intention to allow the 

use of a safe-harbor interest rate for 

determining excess interest under the 

‘‘adjusted U.S.-booked liabilities’’

method in Step 3. The Notice also 

requested comments regarding the effect 

of intangibles on the Step-1 

determination of U.S. assets under the 

elective fair market value method and 

the Step-2 determination of U.S. 

liabilities using the fixed or actual ratio. 

2. Modifications to Three-Step 

Calculation Under § 1.882–5 

a. Introduction/Background 

Section 1.882–5 generally requires a 

foreign corporation to use a three-step 

calculation to determine the amount of 

interest expense that is allocable under 

section 882(c) to income effectively 

connected (or treated as effectively 

connected) with the foreign 

corporation’s conduct of a trade or 

business within the United States. 


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