Cross-border business brings great opportunity—but also complexity. Discover how Moss Adams can help you mitigate your tax exposure and increase your chances for success.
Whether you operate distribution channels in Europe; procure from Malaysia, Vietnam, and China; expand into emerging markets; or simply trade in the global economy, understanding international tax systems can enhance your returns and align with your future business plans.
Many of our clients trade internationally or have offshore subsidiaries or joint ventures. As a result, Moss Adams has a keen understanding of the tax services needed by businesses that operate multinationally. Of course, complex issues arise, but there are also tremendous opportunities—both to reduce tax exposure and to drive greater business success.
Our International Tax group can support all tax aspects of your international businesses, including foreign taxation, financing arrangements, sourcing, import-export considerations, and new markets. Our specialists have technical and hands-on experience evaluating business restructuring or business rationalization and determining the resulting tax implications. We also have a dedicated China Practice 中国业务 with bilingual professionals who can handle all your inbound and outbound needs.
You’ve just identified a strategic acquisition for your business. What collateral will the bank require? Does the collateral create taxable income? As you move toward shared services and synergies, will there be an unexpected tax bill? Will there be any benefit to centralizing that distribution? Did someone make the appropriate tax elections? The tax process around an acquisition and how that acquisition is integrated into your existing business must start before an agreement is signed. We can help you understand indemnities related to tax issues and project effective tax rates.
Whether you’re selling or transferring assets from one country to another, gaining a better understanding of international tax complexities and your disposition options can help improve your bottom line.
Sale of Non-US Assets
Knowing your after-tax rate of return: For US companies or individuals disposing of non-US business or investment assets, this is crucial. What’s more, many transactions involving non-US assets require a number of foreign disclosure forms, which, if not completed properly, can result in significant penalties.
Structuring your dispositions for maximum benefit can mean the difference between a poor investment and a profitable one. This includes fully understanding:
Sale of US Assets
Two of the most important considerations for non-US companies disposing of US real estate are withholding under the Foreign Investment in Real Property Tax Act (FIRPTA) and available treaty benefits.
Generally, FIRPTA imposes a withholding tax on the gross proceeds of a sale when a non-US person sells US real estate (or a company that owns US real estate). This can impair the seller’s liquidity. Also, depending on the countries involved, there may be treaty benefits available that could reduce the worldwide effective tax rate on the disposition.
Inbound and Outbound Transfers
If your transactions are structured correctly, you can move assets or business units across borders in tax-free, tax-deferred, or tax-efficient ways. If your transactions are structured incorrectly, or if you don’t take tax considerations into account, you may have negative tax consequences that could affect your global operations and your bottom line.
As it turns out, not every company is fully compliant with the various reporting and disclosure laws for the jurisdictions in which they operate. When under audit by a taxing authority, most make the assumption that valuations are understated and start down the path of making adjustments and asserting penalties. There is no evidence that this will slow in the coming years. Once under audit, you must follow appropriate audit and appeals procedures. Additionally, your service providers must understand all the options available to mitigate the global tax impact of adjustments and penalties.
When it comes to planting your global footprint, there’s great news: The U.S. government is still providing incentives to emerging exporters through the Domestic International Sales Corporation. Even better, you can access knowledgeable leaders to realize these incentives for you.
Our International Tax group professionals have proven experience evaluating and implementing export strategies. We can provide you with a road map for every step, from legal referrals to filing your tax return, so that realizing your tax benefits couldn’t be easier.
Much of global tax planning comes down to avoiding double tax. This relatively mundane area of practice holds the secret to moving your company’s effective tax rates from up to 70 percent to close to zero. What’s your rate? What could it be? We work with you to design a tax structure that meshes with your organizational structure yet takes advantage of efficiencies and opportunities.
One of the challenges of competing in a global marketplace is optimizing your international workforce. This includes issues such as expatriate benefits, federal and state taxes, tax equalization calculations, payroll compliance, and compensation reporting. We work with you to design a strategy that provides a return on the investment you make in people.
There are tax consequences to your operational business decisions—whether you extract an underperforming business unit for disposition, acquire a company, or rationalize your current organizational structure. Partnering with Moss Adams gives you the confidence you need to make good decisions.
Our International Tax group has technical and hands-on experience evaluating restructuring or business rationalization and determining the resulting tax implications. Reviewing your options thoroughly will help you make sound decisions during potential transition times.
The deployment of intangible property has been used over the decades to efficiently and effectively execute on business plans.
For those companies that execute on well-designed business plans that take into account the tax consequences of redeploying intangible property, there are opportunities to significantly reduce your taxes and tax rates. On the other hand, for those companies that don’t understand the tax ramifications of their business strategies, the IRS will likely use any number of statutes available to extract exit taxes and penalties. In fact, many companies with intellectual property may inadvertently move it to unfavorable tax jurisdictions.
We work with you to understand the tax consequences of your business plans and provide insight into advantageous tax planning.
The best time to understand the impact of transfer pricing on your business, tax footprint, and financial statements is before you’ve committed to expansion or restructuring. That’s why we focus first on the future rather than on historical reporting. We give you the information and tools you need to make thoughtful business decisions when transactions are still open by modeling the economics of a transaction, including the anticipated margins by taxing jurisdiction, the associated income and indirect taxes, and the exposures that need to be considered on financial statements. And if and when documentation is needed, we provide a straightforward approach to compliance.
Learn more about our transfer pricing services.
When planning cross-border operations, are you factoring in all relevant international tax considerations? Trapped and deferred loss planning could allow you to obtain a deduction in the United States for foreign operation losses and built-in offshore losses. Proper planning in this area can help you manage your cash flow, overall tax liability, and effective tax rate for financial statement reporting purposes; it can also help your bottom line.
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