[Code of Federal Regulations]
[Title 26, Volume 15]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR36.3121(l)(9)-1]

[Page 454-455]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 36_CONTRACT COVERAGE OF EMPLOYEES OF FOREIGN SUBSIDIARIES--Table of Contents
 
Sec. 36.3121(l)(9)-1  Domestic corporation as separate entity.

    A domestic corporation which enters into an agreement as provided in 
Sec. 36.3121(l)(1)-1 shall, for purposes of the regulations in this 
part and for purposes of section 6413(c)(2)(C), relating to special 
credits or refunds, be considered an employer in its capacity as a party 
to such agreement separate and apart from its identity as an employer 
incurring liability for the employee tax and employer tax on the wages 
of its own employees. Thus, if a citizen of the United States performs 
services in employment for the domestic corporation and at any time 
within the same calendar year performs services covered by the agreement 
as an employee of one or more foreign subsidiaries named therein, the 
limitation on wages provided in section 3121(a) (1) has application 
separately as to the wages for employment performed in the employ of the 
domestic corporation and as to the remuneration for services covered by 
the agreement performed in the employ of such foreign subsidiary or 
subsidiaries. All services covered by the agreement whether performed in 
the employ of one or more than one such foreign subsidiary are regarded 
for purposes of the wage limitation as having been performed in the 
employ of the domestic corporation in its separate capacity as a party 
to the agreement. Similarly, any remuneration for such services which, 
if the services were performed in the United States, would be excluded 
from wages unless a certain amount of such remuneration is paid by a 
single employer within a specified period (for example, remuneration for 
agricultural labor) is regarded, for purposes of determining whether the 
domestic corporation incurs liability under its agreement with respect 
to such remuneration, as having been paid by the domestic corporation in 
its separate capacity as a party to the agreement. All remuneration 
received by an employee for services covered by the agreement is deemed, 
for purposes of the special credit or refund provisions

[[Page 455]]

contained in section 6413(c), to have been received from the domestic 
corporation as an employer in its separate capacity as a party to the 
agreement.