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March 25,2022

Anna Murray 

On Mar. 22, Jack Taylor as a LLM Candidate from University of Minho analyzed Whirlpool’s tax case at MNE Tax. US Sixth Circuit Court rules that profit of Whirlpool Luxembourg was regulated by “branch rule,” the Internal Revenue Code Section 954(d)(2). 

At first, Whirlpool thought their revenue was from production process in Mexico. Since it was not foreign base company sales income (FBCSI), they could save tax. However the court turned down their appeal and reaffirmed their USD 45 million tax payment.

Whirlpool-Lux, as Whirlpool’s Luxembourg branch, was established in 2007. The court rules that Its Mexico company ensured a lower tax rate in Luxembourg. Meanwhile, when selling to the US, their competitive price assisted to transfer profit back to the US.