Delphi, now based in Britain, to contest IRS push for U.S. tax filings
DETROIT (Reuters) -- Delphi Automotive said it would "vigorously contest" pressure by U.S. tax authorities to file taxes in the United States as a domestic company, when its tax base is in the United Kingdom.
The Internal Revenue Service told Delphi in June that it would be taxed as a U.S. company due to the sale of its assets to Delphi Holdings LLC after it emerged from bankruptcy in 2009, the company said in a regulatory filing on July 31.
The automotive supplier said it was reincorporated in the United Kingdom as a limited liability partnership, which allows it to reduces taxes. The company said it had filed U.S. federal partnership tax returns between 2009-11.
"We will continue to prepare and file our financial statements on the basis that neither Delphi Automotive LLP nor Delphi Automotive Plc is a domestic corporation for U.S. federal income tax purposes," the company said in the filing.
Delphi, which operates out of Detroit, is among several American companies locked in a battle with the IRS over the use of offshore tax shelters.
The IRS contends that U.S.-based companies operating globally are manipulating tax laws.
Under the U.S. tax code, domestic companies must pay tax on total global income, including income generated in other countries. To avoid U.S. taxes, many companies incorporate in those countries.Contact Automotive News