Archive: international taxation

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Key U.S. International Tax Provisions in the New Tax Legislation

The new U.S. Federal tax legislation includes some important revisions to the U.S. international tax rules. These rules are applicable to U.S. taxpayers with outbound cross-border activities in other countries. The following are some important highlights that could have an impact on the U.S. Federal tax obligations beginning as of January 1, 2018. 100% U.S. […]

New U.S. International Tax Rules

The new U.S. Federal tax legislation includes some important revisions to the U.S. international tax rules. These rules are applicable to U.S. taxpayers with outbound, cross-border activities in other countries. The following are some important highlights that could have an impact on your U.S. Federal tax obligations beginning January 1, 2018. The participation exemption. The […]

Avoid Penalties Related to International Tax Filings

The IRS Large Business and International Process Unit (LB&I) issues internal practice guidance from time to time regarding U.S. international tax requirements. On May 11, 2017, the IRS provided guidance on the Form 5471 penalties in an International Practice Unit (IPU) release. The U.S. federal Form 5471 is a U.S. international information return that discloses […]

New Form 5472 Filing Requirement for U.S. Disregarded Entities Owned by a Foreign Person

On December 13, 2016, the IRS issued T.D. 9796, new regulations that require U.S. disregarded entities owned by a foreign person to file U.S. Federal Form 5472. The new Form 5472 filing requirement applies for tax years beginning after December 31, 2016 and ending on or after December 13, 2017. Form 5472 is required to […]

G Election Trues Up Timing to Recognize CFC & PFIC Income for Net Investment Income Tax

The “G” election,  provided for under U.S. Treas. Reg. Section 1.1411-10(g), impacts U.S. direct and indirect individual shareholders of controlled foreign corporations (“CFCs”) and passive foreign investment companies (“PFICs”). A U.S. individual shareholder of a CFC or PFIC with a qualified electing fund (“QEF”) election is required to report and pay U.S. federal tax on […]

IRS Issues New Transfer Pricing Audit Roadmap

The IRS released a Transfer Pricing Audit Roadmap on February 18, 2014.  The Roadmap, which was issued through the IRS Transfer Pricing Operations of the Large Business and International (LB&I) division, was developed to provide audit techniques and tools for transfer pricing examinations.  The Roadmap is designed as a comprehensive toolkit based on an audit […]

IRS Rules that Mexican Land Trusts are Not Foreign Trusts for Tax Purposes

On June 6, 2013, the IRS issued Revenue Ruling 2013-14, in which it found that Mexican Land Trust (“MLT”) arrangements were not considered to be foreign trusts.  A U.S. person that owns an interest in a foreign trust is generally required to comply with certain U.S. federal tax reporting requirements by filing the Forms 3520 […]

Caution: FIRPTA Withholding Exemption Certificates—Mirage or Oasis?

The Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”) requires foreign persons who sell U.S. real property (or certain U.S. real property interests) to pay a 10% U.S. withholding tax on the gross sale proceeds. If the foreign person’s final U.S. tax liability on the gain from the sale of the U.S. real […]

The Importance of Sourcing Software License Royalty Income

If a U.S. company pays a royalty to a foreign company for the use of a software license, there is an issue regarding whether the royalty payment is considered to be U.S. source income to the foreign licensor. If the royalty is considered to be U.S. source income to the foreign licensor then I.R.C. Section […]

The Importance of Sourcing Software License Royalty Income

If a U.S. company pays a royalty to a foreign company for the use of a software license, there is an issue regarding whether the royalty payment is considered to be U.S. source income to the foreign licensor. If the royalty is considered to be U.S. source income to the foreign licensor then I.R.C. Section […]