Foreign branch
(vii) Foreign branch(A) In general. The term foreign branch means a qualified business unit (QBU), as defined in 1.989(a)-1(b)(2)(ii) and (b)(3), that conducts a trade or business outside the United States. For an illustration of the principles of this paragraph (f)(3)(vii), see paragraph (f)(4)(i) of this section (Example 1). (B) Trade or business outside the United States. Activities carried out in the United States, whether or not such activities are described in 1.989(a)-1(b)(3), do not constitute the conduct of a trade or business outside the United States. Activities carried out outside the United States that constitute a permanent establishment under the terms of an income tax treaty between the United States and the country in which the activities are carried out constitute a trade or business conducted outside the United States for purposes of this paragraph (f)(3)(vii)(B). In determining whether activities constitute a trade or business under 1.989(a)-1(c), disregarded payments are taken into account and may give rise to a trade or business, provided that the activities (together with any other activities of the QBU) would otherwise satisfy the rule in 1.989(a)-1(c). (C) Activities of a partnership, estate, trust, or corporation(1) Treatment as a foreign branch. For purposes of this paragraph (f)(3)(vii), the activities of a partnership, estate, trust, or corporation that conducts a trade or business that satisfies the requirements of 1.989(a)-1(b)(2)(ii)(A) (as modified by paragraph (f)(3)(vii)(B) of this section) are