US Tax Court Limits Section 245A: The Varian Decision and the Direct Ownership Rule
- World Tax & Law Editorial Team
- May 1
- 2 min read
Updated: May 4
The US Tax Court has fundamentally narrowed the scope of the Section 245A dividend received deduction (DRD) in its recent opinion on Varian Medical Systems, Inc. and Subsidiaries v. Commissioner, 166 T.C. No. 8. This landmark ruling resolves critical ambiguities from previous litigation and enforces a strict "direct ownership" requirement, compelling multinationals to reassess their tiered foreign structures.
