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Curbs on foreign-paid NQDC pass Senate; enactment may be near

A Senate-passed tax "extenders" package would impose harsh tax rules on nonqualified deferred compensation (NQDC) paid by some foreign companies to US taxpayers, generally effective for services performed after 2008. The bill would cover NQDC paid by a foreign company unless substantially all of its income is effectively connected with a US trade or business or subject to a comprehensive foreign income tax. US taxpayers would be taxed when the NQDC vests, even if payments are not yet due. Though the House favors an extenders bill that offsets tax breaks, the NQDC curbs may yet pass Congress.  (Select News, 24 Sep 2008)


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