Baker
Tilly International provides a range of publications that
cover subjects of interest to companies with an international
presence or those considering international expansion.
Baker Tilly International Publications include: Global
Annual Review 2009, Country
Tax Guides, International INSIGHT,
International TAX INSIGHT,
Doing Business in Country Guides.
Click
here to access these helpful publications.
For
more information on our international business services,
contact:
Areas
of expertise include:
Foreign-Owned
Businesses Operating in the U.S.
Foreign-owned businesses operating in the U.S.
have certain compliance requirements including required
reporting of transactions to the IRS and the Department
of Commerce. We prepare these and all other necessary tax
reporting forms as required. One of the most important issues
to businesses interacting globally is transfer pricing.
We spend considerable time with our clients advising them
on current IRS pricing issues. Additionally, we review the
options of operating as a subsidiary or as a branch of a
foreign-owned business, including all short- and long-term
business tax issues.
U.S.-Owned
Businesses Operating Abroad
An important issue to businesses headquartered
in the U.S. is foreign tax credit utilization and deferral
income. We review with our clients the need to incorporate
when expanding into foreign markets. In many cases, we introduce
our clients to both our associates in Baker Tilly International
and legal counsel outside the U.S. Advising on Controlled
Foreign Corporation (CFC) status is an ongoing activity
with clients expanding overseas. There are many changing
tax issues relating to CFCs, ranging from change in deferral
of income to reporting requirements.
As businesses
begin operating in a global environment, questions arise
regarding the need to withhold U.S. taxes on payments. We
work closely with our clients advising them on what type
of payments and agreements requiring to withholding U.S.
income taxes.
Exporting
The U.S. has many export incentives ranging from
borrowing export funds to the tax incentives of forming
a Domestic and International Sales Corporation (DISC). We
advise and assist clients in maximizing their profits by
reviewing options and alternatives in debt structures that
enhance exporters’ businesses. We also analyze exporters'
profits in order to determine the advantages of forming
an DISC outside the U.S.
What
are the Benefits of Forming a DISC?
Under
DISC rules, the exporter pays commissions to the DISC.
The commission the exporter pays to the DISC is deductible
and is computed under special pricing rules. The DISC,
however, is a tax-exempt entity, and thus pays no tax
on the commissions it receives. The exporter receives
a deduction of 35% on the commission payments they make
to the DISC, and the DISC shareholders pay a 15% tax rate
on the income distributed from the DISC. This results
in a permanent tax saving for US exporters with respect
to the export sales. See illustration on the benefits
of a DISC.
Background
of a DISC
DISCs
have been around since the seventies but had fallen out
of favor with the passage of the Foreign Sales Corporation
(FSC) and Extraterritorial Income Exclusion (EIE). In
light of the repeal of both the FSC and the EIE provision,
and the passage of the favorable 15% rate on dividends,
the concept of DISC has come back into favor. A DISC is
a separate domestic corporation which must elect to be
treated as a DISC and is required to maintain a separate
bank account and set of accounting books. A DISC is also
required to file an annual US income tax return even though
it pays no US income taxes.
HA&W
provides customized services ranging from an initial benefit
assessment to a full-scale DISC outsourcing service.
Pricing
Assessment and Feasibility Study
A
basic assessment of the potential benefits of using a
DISC with readily available data. A feasibility study
given the company’s available data and circumstances.
Data
Analysis and Documentation
Analysis
of the company’s self-prepared data and identification
of the grouping and intercompany pricing rules that will
maximize tax savings.
DISC
Outsourcing Service
For
companies wishing to outsource the preparation of the
DISC calculations and supporting documentation, HA&W
will work with your company’s accounting and information
systems personnel to develop each requisite piece of information
including the final transactional database. Once the transactional
database and supporting schedules have been prepared,
we will perform the same steps outlined above for the
data analysis and documentation. With renewed emphasis
on internal controls and documentation under Sarbanes-Oxley,
companies may benefit from our outsourcing service procedures,
schedules, and final calculations required by the IRS
for DISC tax benefits.
Transfer
Pricing Planning and Documention
U.S.
Incentives Abroad
Since the U.S. taxes resident individuals on their
worldwide income and estates, it is important to properly
plan foreign investments so they do not have a negative
tax impact. It is important to not only review the U.S.
tax consequences, but worldwide taxes as well.
Nonresident
Employees
Our services for nonresident employees include
tax planning and return preparation as well as due diligence
with respect to their U.S. assets and investments. We advise
our clients on both income and estate tax issues as well
as investments which, if not properly structured, could
be subject to high U.S. estate taxes.
Immigration
Prior to immigrating to the U.S., there are many
tax issues that a person needs to recognize. Many persons
with substantial income or assets outside the U.S. need
to consider tax planning in order to reduce possible double
taxation. We work closely with U.S. immigration attorneys
and offshore counsel to properly advise our clients moving
to the U.S.
Expatriates
– U.S. Citiziens and Residents Working Abroad
American companies with employees working abroad
must consider how to structure payroll tax policies to achieve
maximum benefit for the company and its expatriate employees.
We can suggest the most advantageous way to compensate expatriate
employees. In addition, we assist expatriates with ways
to maximize foreign earned income exclusion.
Click
here to download and view our Intrnational Accounting
& Tax Services brochure
