U.S. Treasury Department Publishes List Of Boycott Countries That Result In Restriction Of Tax Benefits

February 7, 2019by TPA Global

The U.S. treasury department has issued the list of the countries that require cooperation with, or participation in, an international boycott as a condition of doing business.

Countries Lists

The U.S. treasury department enacted an antiboycott law and associated guidelines in response to the Arab league’s boycott of Israel. Consequently, the treasury periodically publishes an official boycott list to alert the public to those countries that require or may require participation in, or cooperation with, an international boycott.

On 6 February 2019, the treasury published its list by including Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, the United Arab Emirates and the Republic of Yemen in its list. The new list is unchanged from the list that was dated 2 January 2018 and was published in the Federal Register on 16 May 2018.


The listed countries are identified pursuant to section 999 of the US Internal Revenue Code (IRC). To the extent US taxpayers including members of a controlled group, regardless of whether a transaction involves any U.S. goods or services, doing business in that listed countries, the taxpayers require to file reports and some tax benefits will be denied accordingly.

Concerning the reporting obligation, U.S. taxpayers and their related companies are required to report operations in or related to boycotting countries. The receipt of boycott requests, and boycott agreements on IRS Form, should be filed with the taxpayer’s federal income tax return.

In addition, as the consequences conducting business in boycotting countries, the treasury will also deny certain tax benefits as a penalty for participating in or cooperating with an international boycott that is not sanctioned by the United States. The benefits including the denial of U.S. foreign tax credits (FTCs) for taxes paid to those countries and income inclusion under subpart F of the IRC in the case of US shareholders of controlled foreign corporations (CFCs) that conduct operations in those countries.

Source: US Government


TPA Global

Transforming the World of Tax

Copyright © 2020. Transfer Pricing Associates BV. All rights reserved.