Instructions For Schedule S (Form 1120-F) - 2012 (Page 3 of 4) in pdf

section 1.883-2(d)(3) as a qualified

Line 10b(ii). Enter the applicable

shareholders and maintained in a

shareholder if such person's interest in the

two-letter codes from the list of country

dematerialized or immobilized book-entry

foreign corporation, or in any intermediary

codes at

system. The denominator is the total value

corporation, is held through bearer shares

of all the CFC's outstanding stock.

Part III — Stock Ownership

that are not maintained in a dematerialized

Line 12. Specify the days of the foreign

or immobilized book-entry system during

Test for Controlled

corporation's tax year during which more

the relevant period. See Regulations

Foreign Corporations

than 50% of the total value of its

section 1.883-2(d)(3)(ii).

outstanding stock was owned (within the

A foreign corporation satisfies the stock

For purposes of the above rules, a 5%

meaning of section 958(a) and

ownership test of Regulations section

shareholder is a person who owns at

Regulations section 1.883-3(b)(4)) by

1.883-1(c)(2) if it satisfies the qualified

least 5% of the total vote and value of the

qualified U.S. persons.

U.S. person ownership test (see below)

outstanding shares of a class of stock. For

Line 13. Specify the days of the foreign

and it satisfies the substantiation

these purposes, persons related within the

corporation's tax year during which it was

requirements of Regulations section

meaning of section 267(b) shall be treated

a CFC (as defined in section 957(a)).

1.883-3(c).

as one person. In determining whether two

or more corporations are members of the

Qualified U.S. person ownership test.

Part IV — Qualified

same controlled group under section

This test is met only if:

Shareholder Stock

267(b)(3), a person is considered to own

1. The foreign corporation is a CFC

stock owned directly by such person,

Ownership Test

(as defined in section 957(a)) for more

stock owned through the application of

than half the days in the corporation's tax

A foreign corporation satisfies the stock

section 1563(e)(1), and stock owned

year, and

ownership test of Regulations section

through the application of section 267(c).

1.883-1(c)(2) if more than 50% of the

2. More than 50% of the total value of

In determining whether a corporation is

value of its outstanding shares is owned,

its outstanding stock is owned (within the

related to a partnership under section

or treated as owned, by applying the

meaning of section 958(a) and

267(b)(10), a person is considered to own

attribution rules of Regulations section

Regulations section 1.883-3(b)(4)) by one

the partnership interest owned directly by

1.883-4(c), for at least half of the number

or more qualified U.S. persons (defined

such person and the partnership interest

of days in the foreign corporation's tax

below) for more than half the days of the

owned through the application of section

year by one or more qualified

CFC's tax year, provided such days of

267(e)(3).

shareholders, as defined below. A

ownership are concurrent with the time

shareholder may be a qualified

Note. An investment company (as

period during which the foreign

shareholder with respect to one category

defined in Regulations section 1.883-2(d)

corporation was a CFC (as defined in item

of income while not being a qualified

(3)(iii)(B)) shall not be treated as a 5%

1 above).

shareholder with respect to another. A

shareholder.

foreign corporation will not be considered

A qualified U.S. person is a U.S. citizen,

Line 8. Enter on line 8 a description of

to satisfy the qualified shareholder stock

resident alien, domestic corporation, or

each class of stock the foreign corporation

ownership test unless the foreign

domestic trust described in section 501(a),

relied upon to satisfy the requirements of

corporation meets the substantiation and

but only if the person provides the CFC

the “regularly traded” test described

reporting requirements described in

with an ownership statement as described

earlier. The description must include:

Regulations section 1.883-4(d) and (e).

in Regulations section 1.883-3(c)(2), and

An indication as to whether the class of

the CFC meets the reporting requirements

A shareholder is a qualified

stock was issued in registered or bearer

of Regulations section 1.883-3(d) with

shareholder only if the shareholder:

form and whether such bearer shares

respect to that person.

were maintained in a dematerialized or

1. With respect to the category of

immobilized book-entry system.

Line 11a. Enter the percentage of the

income for which the foreign corporation is

The number of issued and outstanding

seeking an exemption, is:

value of the shares of the CFC that is

shares in that class of stock as of the

owned by all qualified U.S. persons

(A) An individual who is a resident of a

close of the tax year, and

identified in the qualified ownership

qualified foreign country. An individual

The value of each class of stock in

statements. In determining the percentage

is a resident of a qualified foreign

relation to the total value of all the

to enter on line 11, the numerator is the

country only if the individual is fully

corporation's shares outstanding as of the

total value of the CFC's outstanding stock

liable to tax as a resident in such

close of the tax year.

that is owned (within the meaning of

country (e.g., an individual who is

section 958(a) and Regulations section

liable to tax on a remittance basis in a

Line 9. See Regularly traded, earlier, for

1.883-3(b)(4)) by all qualified U.S.

foreign country will not be treated as a

instructions for completing this line 9.

persons, not including the value of any

resident of that country unless all

Line 10. If the answer to line 9 is “Yes”

bearer shares (unless such shares are

residents of that country are taxed on

with respect to more than one class of the

maintained in a dematerialized or

a remittance basis only) and, in

corporation's stock, the foreign

immobilized book-entry system). The

addition (1) the individual has a tax

corporation must complete lines 10a and

denominator is the total value of the CFC's

home, within the meaning of

10b with respect to each such class. To do

outstanding stock, including the value of

Regulations section 1.883-4(b)(2)(ii),

so, complete these lines as follows:

any bearer shares.

in that qualified foreign country for 183

Complete line 10 of the actual schedule

days or more of the tax year or (2) the

Line 11b. Enter the percentage of the

for the class of stock with respect to which

individual is treated as a resident of a

value of the outstanding shares of the

5% shareholders own the largest

qualified foreign country based on

CFC that are bearer shares maintained in

percentage of the vote and value of the

special rules pursuant to Regulations

a dematerialized or immobilized

outstanding shares of the class of stock.

section 1.883-4(d)(3).

book-entry system. In determining the

For all other classes of stock, attach a

(B) The government of a qualified

percentage to enter on line 11b, the

schedule that uses the same format as

foreign country (or a political

numerator is the total value of bearer

lines 10a and 10b.

subdivision or local authority of such

shares owned by the qualified

country).

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Instructions For Schedule S (Form 1120-F) - 2012 Page 3

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