New Regulation Provides Clarification regarding the Tightened CFC and Anti-Tax Haven Rules

In this note the author considers Regulation No. 51/E, which clarifies certain uncertainties regarding the application of the tightened CFC and anti-tax haven rules introduced in August 2009. Essentially, these rules have introduced: (1) an exception from CFC rules where the CFC predominantly carries on its activities in the local “market”; (2) an “active test” to bless the above-mentioned exception; and (3) an extension, if certain tests are satisfied, of the CFC rules to entities residing in non-blacklisted countries or territories.