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Fixed facilities, (2) management activity, (3) agent activity,
(4) employee activity, and (5) office or other fixed place of
business of a related person. Sec. 1.864-7, Income Tax Regs. We
examine each of the factors in turn.
(1) Fixed facilities. The general rule is that "an office
or other fixed place of business is a fixed facility, that is, a
place, site, structure, or other similar facility, through which
a nonresident alien individual or a foreign corporation engages
in a trade or business." Sec. 1.864-7(b)(1), Income Tax Regs.
"A fixed facility may be considered an office or other fixed
place of business whether or not the facility is continuously
used by a nonresident alien individual or foreign corporation."
Id. Furthermore:
A nonresident alien individual or a foreign corporation
shall not be considered to have an office or other fixed
place of business merely because such alien individual or
foreign corporation uses another person’s office or other
fixed place of business, whether or not the office or other
fixed place of business of a related person, through which
to transact a trade or business, if the trade or business
activities of the alien individual or foreign corporation in
that office or other fixed place of business are relatively
sporadic or infrequent, taking into account the overall
needs and conduct of that trade or business. * * * [Sec.
1.864-7(b)(2), Income Tax Regs.]
(2) Management activity. The regulations take into account
where the "top management" decision-making takes place and where
"the day-to-day trade or business of the foreign corporation”
occurs. Sec. 1.864-7(c), Income Tax Regs.
(3) Agent activity. The regulations provide:
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