U.S. Multinational Corporations: Strategic Cash Movement Between Foreign Affiliates

By: Goran Vukicievic As multinational corporations expand their operations, they are often faced with executing transactions that involve multiple taxing jurisdictions.  Without proper planning, cross-border movement of capital, products, services, and intellectual property can result in significant tax costs and corporate earnings erosion.  When considering an international tax…

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Should I Take that Job Overseas?

By: Megan Miller An exciting job offer, or perhaps job transfer, has been presented to you. The thought of living abroad sounds enticing.  Before packing your bags, gather the facts about how this may affect you financially, and more specifically, what happens once you are an expatriate. U.S. individual income tax returns for U.S. citizens and residents are typically due on April 15…

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Broad Changes to Canada’s Sales Tax Rules May Affect Your Reporting Requirements

By: Jennifer Dowdy Recent sales tax legislation in Canada set to take effect on July 1, 2021, makes changes to its Goods and Services Tax (GST/HST) that will have consequences for many non-resident companies selling goods and services to customers in Canada.  The legislation was intended to address economic changes that occurred in the digital era and to capture e-commerce (digital a…

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Expanding Outside the U.S.? Take Care with Transfer Pricing

U.S. companies expanding to other countries must consider how their new foreign operation will interact with its related party in the U.S. When intercompany transactions exist, as they almost always do when a subsidiary is established, transfer pricing rules apply. For new operations, it is not uncommon for the activities of the new subsidiary to change as the operation grows and matures. …

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IRS = I Request Service

Both taxpayers and tax preparers find themselves in a strange situation: craving more – not less – interaction with the IRS.   The last 15 months during the pandemic have taken what was an already tenuous relationship and made it worse.  The pandemic has had a significant impact on companies’ and individuals’ interactions with the IRS; whether it be r…

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State Income Taxes in a Remote World

By: Donna Holm With the recent passing of the American Rescue Plan, states have received some much-needed help from the Federal government to aid in jump-starting small business and enabling expansion initiatives. Many business owners have also realized that while some state funds have been made available to retain employees and stay afloat, they are forced to understand a complex set of …

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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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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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