Introduction to U.S. International Tax Publicaiton

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Introduction to U.S. International Tax Publicaiton

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Introduction to U.S. International Tax
Seminar Publication

Introduction to U.S. International Tax

  • Overview of U.S. International Taxation
  • Residence vs. activity based tax jurisdiction
  • Taxation of foreign income of U.S. corporations
  • U.S. income and sourcing rules
  • Permanent establishment principles and double taxation
  • Claiming a deduction or credit for foreign income taxes

Source of Income, Allocation and Expense Apportionment

  • Residence For Taxation
  • Income From Single and Mixed Sources
  • Establishing Foreign Title Passage-The Use of Incoterms
  • Tax Planning to Create or Increase Foreign Source Income
  • The Basic Rules of Allocation and Apportionment
  • The Apportionment of R&E Expenses
  • Asset Apportionment of Interest Expense
  • Tax Planning in Expense Apportionment

Controlled Foreign Corporations (CFCs), Subpart F Income and Passive Foreign Investment Companies (PFICs)

  • What is a Controlled Foreign Corporation (“CFC”)
  • Effect of Voting Agreements on CFC Determination
  • Overview of Subpart F Provision
  • Subpart F Income Definition
  • Exceptions to Subpart F Income Definition
  • E&P Limitation
  • De Minims Exception
  • Full Inclusion Rule
  • High-Tax Exception
  • Qualified Deficit
  • Calculating the Section 960 Credit for Deemed Inclusions
  • Previously Taxed Income

The Foreign Tax Credit

  • Key concepts of the foreign tax credit
  • Taxes available for the credit
  • § 901 direct credits
  • § 902 indirect (deemed paid) credits and § 960
  • Tax Pools & E&P Pools
  • § 78 gross-up
  • Foreign tax credit limitation formula
  • Applying the foreign tax credit limitation formula for passive and general baskets
  • § 905 and Redeterminations

Cross-Border Mergers & Acquisitions

  • Section 367(a) – Outbound Transactions
  • General Rule, Exceptions, and GRAs
  • Indirect Stock Transfers
  • Section 367(a)(5)
  • Outbound Transfers of Intangibles – Section 367(d)
  • Inversion Transactions – Section 7874
  • Section 304 Transactions v. Cash D Reorganizations
  • Section 367(b):
  • Inbound Transactions
  • Foreign-to-Foreign Transactions
  • Section 367(e)(2) Liquidations

Tax Reporting Requirements for Foreign Operations

  • Form 5471, Controlled Foreign Corporations
  • Form 8858, Foreign Disregarded Entities
  • Form 8865, Controlled Foreign Partnerships
  • Form 1118, U.S. Foreign Tax Credits
  • FinCen Form 114, Foreign Bank Account Reporting
  • Form 8833, Treaty Based Return Positions

Transfer Pricing

  • Introduction to transfer pricing
  • Sources of U.S. transfer pricing law
  • Overview of U.S. transfer pricing methods
  • Transfer pricing methods for transfers of tangible property
  • Transfer pricing methods for transfers of intangible property
  • Transfer pricing methods for services
  • Comparability
  • Application of the CPM
  • Penalties and documentation
  • Non-U.S. transfer pricing rules

Income Tax Treaties

  • Doing business Abroad- Overview of Tax and Non-Tax considerations
  • Overview of the Tax Treaty Approach to Double Taxation Relief
  • The Essential Elements of Income Tax Treaties
  • Permanent Establishments
  • Business Profits
  • Withholding Taxes on Source Income
  • Qualifying for Treaty Benefits
  • Accessing Treaty Benefits- Resident Requirement
  • Limitation on Benefits
  • Double Tax Treaty Relief Example

Earnings and Profits

  • Earnings and profits (“E&P”) generally
  • Common E&P adjustments
  • The steps in preparing an E&P study
  • Preparing a computation of E&P pre-1987
  • Preparing a computation of E&P post-1986
  • Practical issues in calculating E&P
  • The importance of E&P in international tax