Source: https://intltax.typepad.com/intltax_blog/2009/12/sourcing-rules-for-telecoms-international-communications-income.html
Timestamp: 2019-04-18 10:23:02+00:00

Document:
Telecommunication companies often earn several different types of income. The Internal Revenue Code and the regulations provide special sourcing rules for “international communications income.” Code § 863(e)(2) defines international communications income as income derived from the transmission of communications or data between the United States and a foreign country (or possession of the United States).
Code § 863(e)(1)(A) provides that any international communications income of a United States person is sourced 50 percent in the United States and 50 percent outside the United States (50/50 source rule). Code § 863(e)(1)(B)(i) provides that any international communications income of a foreign person is sourced outside the United States, except as provided in regulations or in Code § 863(e)(1)(B)(ii).
When a taxpayer cannot establish the two points between which the taxpayer is paid to transmit the communication, Treas. Reg. § 1.863-9(f) provides a default source rule under which all the income derived by the taxpayer from such communications activity is U.S. source income.
the U.S. office or other fixed place of business.
The regulations provide that international communications income derived by a controlled foreign corporation, within the meaning of Code § 957, is 50 percent U.S. source income and 50 percent foreign source income (the same as for United States persons). Treas. Reg. § 1.863-9(b)(2)(ii).
The three criteria for determining the amount of U.S. source income for foreign persons with fixed places of business in the U.S. and for foreign persons engaged in the conduct of a U.S. trade or business in are the same --- the functions performed, the resources employed, and the risks assumed.
Most sourcing rules are bright-line, objective tests. The sourcing rules for foreign persons with international communications income are much more subjective. In fact, such foreign persons may require an analysis similar to a transfer pricing study under Code § 482 merely to determine the source of their international communications income.

References: § 863
 § 863
 § 863
 § 863
 § 1
 § 957
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 § 482