Container Corporation, Successor to Interest of Container Holdings Corporation, Successor to Interest of Vitro International Corporation v. Commissioner

OPINION

Holmes, Judge:

The Code puts a 30-percent tax on “fixed or determinable annual or periodical” income received by foreign corporations from sources within the United States. Vitro, S.A. is a Mexican corporation that charged one of its U.S. subsidiaries a fee to guarantee the subsidiary’s debt to U.S. lenders. The question presented in this case is whether that fee is from a source within the United States.

Background

In 1901, Vitro, S.A. started making glass bottles for the local beer makers of Monterrey, Mexico. Over the next century, Vitro became one of Mexico’s most successful…