Branch Profits Tax
Also called BPT
A 30% tax on the dividend-equivalent amount of a foreign corporation's U.S. branch earnings.
In full
The branch profits tax imposes a second layer of tax on foreign corporations operating through a U.S. branch, applied to the "dividend equivalent amount" — earnings effectively connected with the U.S. trade or business that are not reinvested in U.S. assets. A number of U.S. tax treaties reduce or eliminate the branch profits tax; the rate that applies is set by the specific treaty and by whether the corporation qualifies for its benefits.
Governed by: Branch profits tax rules.
This definition is general information about how the term is used in U.S. cross-border tax. It is not advice, and how it applies depends on your own facts and on the treaty, if any, in force with your country.