International Tax

Businesses operating internationally face unique tax challenges not found solely in domestic operations. Indeed, engaging in cross-border activities requires consideration of additional layers of tax law and regulations.

US operating companies and private equity funds should carefully plan their purchases and sales of foreign businesses or US businesses with foreign operations. They need to consider the complex regulations that govern how US taxpayers are taxed on income from foreign investments and activities. While investing and operating overseas can offer potential tax savings, it also carries risks, such as double taxation and the obligation to report phantom income.

Foreign businesses operating in the US and private equity funds must carefully structure their acquisitions and sales of US entities while taking into account applicable US tax laws. This includes understanding provisions related to debt and equity classification, restrictions on deducting payments to related parties, the branch profits tax, withholding rules, and the US Foreign Investment in Real Property Tax Act ("FIRPTA").

Individuals investing abroad should be aware of the complex and often punitive US tax laws that may impact their investments, including the subpart F, GILTI, and PFIC regimes. It is also important to understand the US reporting requirements for these investments. Utilizing common estate planning structures like trusts can further complicate the situation.

It is crucial not only to minimize tax exposure, but also to prevent compliance errors that could lead to costly penalties.

The withholding rules should not be considered in isolation. It is crucial to also take into account tax treaties and anti-abuse rules, such as the so-called "conduit" regulations.

Foreign investors in US real estate may be subject to US tax, including federal and state income taxes, as well as estate tax. Utilizing corporate and trust structures can help reduce exposure to estate tax; however, investors must also consider the income tax implications of these structures, both in the US and abroad.

It is essential for foreign companies and individuals investing in the US, as well as US residents making payments to foreign individuals, to understand the withholding rules. This involves knowing when and how these rules apply, whether any reduced withholding rates might be available under specific circumstances, along with the associated compliance obligations.

US investments may be structured or restructured to eliminate or minimize withholding tax. The associated documentation must be completed where applicable, such as Forms W-8BEN, W-8BEN-E, W-8IMY, and W-8EXP, non-foreign person certificates, and other certifications.

Dealing with the complex and frequently changing regulations surrounding foreign tax credits is essential for US taxpayers engaged in international operations. Key considerations include the credibility of these credits under US tax law and relevant tax treaties. Additionally, important factors to consider are the limitations on foreign tax credits, the requirements for substantiation, the deemed-paid credit, and the accounting, currency, and carryover rules related to the deemed-paid credit.

Sometimes, the Mutual Agreement Procedure (“MAP”) is advisable, which is a dispute resolution mechanism that allows authorized officials to interact with foreign tax administrations to resolve two issues: double taxation and taxation not in accordance with a convention. Under the MAP procedure, residents in either country may request assistance in resolving an issue covered by their convention. These cases often involve disputes about a taxpayer's residence for treaty purposes, or whether a taxpayer residing in one country has a permanent establishment in another.

Kramer International Law provides services to multinational families, high-net-worth individuals, foreign corporations, trusts, and various entities, all aimed at improving tax efficiency and preserving global wealth. We understand that each individual, family, or business owner faces unique challenges and has specific goals. Our firm develops customized strategies that effectively address these objectives and interests.

We provide assistance with tax planning and structuring for foreign joint ventures. Our services also cover US deferral structures and strategies for repatriating dividends. We help with acquisitions and divestitures, guide clients in choosing the right entity, and assist with tax classification.

Mergers, acquisitions, financings, reorganizations, and divestitures can lead to taxes no matter where they occur. We provide advice and other services respecting international mergers and acquisitions transactions, financings, licensing arrangements, and joint ventures.

We offer effective and innovative strategies to manage and reduce the impact of US, Canada, UK, and international taxation on businesses.

Tax treaties may provide entitlement to tax credits, tax exemptions, reduced rate of tax, or other benefits.

The US, Canada and the UK have tax treaties with a number of foreign countries. These treaties allow residents (who are not necessarily citizens) of these foreign countries to potentially pay a reduced tax rate or be exempt from US, Canada or UK income taxes on certain types of income earned from sources within the US, Canada or the UK, as the case may be. The specific reduced tax rates and exemptions can vary based on the country and the type of income.

We help clients effectively interpret and utilize bilateral tax and trade treaties.

At Kramer International Law, we offer essential strategic tax planning advice for taxpayers involved in both inbound and outbound foreign direct investments.

We develop effective tax-risk mitigation strategies for businesses involved in international transactions and operations.

We create innovative strategies to reduce costs, minimize risks, and maximize tax benefits for cross-border clients with a view to providing ideal service to clients operating across multiple jurisdictions.

We advise respecting issues involving:

• Minimizing worldwide effective tax rates;

• International mergers and acquisitions;

• International public and private debt and equity offerings;

• Choosing tax-efficient locations for holding companies;

• Cross-border financing and treasury operations;

• Expatriate planning, including tax issues related to immigration and visa matters;

• Tax treaties;

• Foreign affiliate tax planning;

• International real estate investment issues;

• Development of tax-efficient supply chains;

• Managing value chains;

• Repatriation of profit;

• Transfer pricing;

• Management of intellectual property and other intangible assets;

• Pre-immigration tax planning; and

• Hybrid structures and debt instruments.
  
  

At Kramer International Law, we help reduce tax exposure and prevent costly compliance errors that could lead to penalties.

We assist businesses in understanding how to properly navigate the provisions of subpart F, GILTI, FDII, PFIC, BEAT, FIRPTA, and foreign tax credits, as outlined in US tax law and treaties.

We provide guidance on income tax filing requirements as well as the withholding and reporting obligations for international payments or activities.