The GILTI High-Tax Exclusion May Produce a Different Result for State Taxes

By: Max Belsinger In mid-summer of 2020, the Treasury Department issued final regulations on the treatment of the global intangible low-tax income (“GILTI”) high-tax exclusion (“HTE”). In short, the GILTI HTE allows taxpayers the opportunity to exclude GILTI tested income subject to a foreign tax rate in excess of 18.9% from its GILTI determination. See GILTI High-…

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Italy Issues New Transfer Pricing Documentation Rules

In November of 2020, the Italian tax authority issued new instructions in regard to transfer pricing documentation for Italian resident enterprises and permanent establishments. The new measures are applicable starting in 2020, and replace provisions in place since September of 2010. The preparation of transfer pricing documentation in Italy is elective, but is necessary to receive protec…

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Reporting Payments to Foreign Persons – What Types of Payments Get Reported on Form 1042?

By: Ashley Kiel Any time a company makes a payment to a foreign person or foreign company, the company should consider how the U.S. government needs to be notified that this payment has been made. Generally, most payments of U.S. source income made to nonresidents are reportable in some way, even if no tax is due on the payment. Determining whether or not a payment is in fact U.S. source …

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U.S. Sales Tax Nexus Expanded - What it Means for Foreign Sellers

By: Jennifer Dowdy Changes in legislation regarding sales and use tax jurisdiction expanded sales tax collection and reporting responsbilities for many companies.  These changes could have a significant impact on foreign remote sellers, as they may now be required to collect and remit state sales tax on their U.S. sales even when they have no physical presence in the U.S.  Unti…

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When US Tax Residency Is Not So Simple

By: Ashley Kiel In general, for federal income tax purposes, individuals who are U.S. persons (citizens or resident aliens) are subject to tax on their worldwide income. Individuals who are not U.S. persons are usually subject to tax just on their U.S.-source, effectively-connected income. These rules sound like they should be very black and white. When dealing with US taxes, however, unf…

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Employee Retention Credit: It’s Time to Take Another Look!

The CARES Act that came into effect in March 2020 contained many relief provisions for both individuals and businesses due to the COVID-19 pandemic.  One of the lesser known and utilized relief provisions in that Act is the Employee Retention Credit (ERC).  This one-year credit allowed eligible employers to receive a credit against the employer’s portion of Social Security…

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New Paycheck Protection Program (PPP) Guidelines from the SBA and Treasury

The Small Business Administration and U.S. Treasury has issued guidelines for the new PPP that includes several major changes. The guidelines for the reconstituted Paycheck Protection Program (PPP) included two interim final rules (IFRs). The 82-page IFR “Business Loan Program Temporary Changes; Paycheck Protection Program as Amended” consolidates the rules for PPP forgivab…

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Issuance of New Temporary Work Visas Suspended

By: Jennifer Dowdy Companies planning to hire foreign individuals to work in the U.S. may have their efforts stalled by President Trump's executive order suspending the grant of temporary employment visas.  President Trump issued the proclamation on June 22, 2020, and it immediately suspended the issuance of H-1B and H-2B, J and L temporary visas until December 31, 2020.  H-1B …

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GILTI High-Tax Exclusion: What You Should Know

By: Austin Yount and Goran Vukicevic The global intangible low-tax income (“GILTI”) regime was introduced under the Tax Cuts and Jobs Act of 2017 (“TCJA”). Under the old regime, US shareholders were not taxed on income earned by their controlled foreign corporations (“CFC”s) until those amounts were repatriated back to the US entity. This deferral syste…

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As the Global Economy Has Changed, Be Sure Transfer Pricing Follows

The ongoing pandemic’s effect on the global economy has the potential to upend transfer pricing policies for multinational companies. A company’s transfer pricing – which is how it prices intercompany transactions – is particularly vulnerable to a fluctuating and uncertain economy. As companies struggle with the unexpected economy of 2020, transfer pricing models ar…

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