IRS Form 5472 is known as Information Return of a 25% Foreign Owned US Corporation or a Foreign Corporation Engaged in a US Trade or Business. As the name of the form suggests, it is for US businesses which have at least 25% of foreign ownership and are involved in a US business or…
IRS Form 5471 is a tax form for foreign companies owned by US persons. In most cases, form 5471 applies to US citizens and residents who own foreign corporations. It does not matter which country a US person lives in. If that person owns stock in a foreign company as a director or officer, then…
What is Residency? When we talk about residency for tax purposes and you only live and do business in one country the rules that apply are very simple. If you are a resident of Canada (you live there) Canadian tax rules apply. As you start to do business in multiple countries, have customers elsewhere,…
Inheritance tax in the UK is the tax that one is liable to pay on any assets which a deceased person has passed on to a legal heir or inheritor. These assets could include property, money, investments, vehicles, payouts from life insurance policies, and any other possessions. When a person dies, the government estimates the…
Things to consider when building an international structure It’s very important thing to notefromthe beginning that there is no one size fits allstructure for a business, investment, operation, etc. Every case is different and there are lots of things to consider: Who aretheowners? Who arethecustomers? Where are thesuppliers? What type of business is it? Where…
What is“Withholding Tax”? Most people only think of one, in some cases two layers of tax. In fact, we generally, have three layers of taxto consider whenever we’re doing international tax planning and structuring. The first layer iscorporateincome tax,which is what most people are trying to reduce by going to a low or zero…
What is“Taxation Basis”? Taxation basis in simple words means – which portion of your income is the country going to tax. The two most common you will hear about are worldwide income taxation and territorial taxation. There are few otherforms oftaxation basis that are not so common, including zero taxand remittance or blends of these.…
What is“Transfer pricing”? Lots of people have the idea of setting up an offshore company in a low or zero tax jurisdiction and then chargingthe original company (that’s in high tax jurisdiction) with management or marketing fees(or similar fees). Well, there are rules against doing this. These rules are called“transfer pricing rules”. If you are…
What areCFC Rules (Controlled Foreign Company rules)? There are lots of misunderstandings when it comes to CFC rules(controlled foreigncompaniesrules)and CMC rules (management control rules, part ofCorporate Residency Rules). Lots of people get confused about which is which. You have to pay attention to both. However,not every country has them, some countries will have CFC but…
WhatDoesSource IncomeMean? Today we’re going tolearn about“incomesource”. Have youheard about territorial taxsystems? What it means, in theory, is that they only tax you on your locally sourced income. Bycontrast, some countries will tax you on your worldwide income, meaning you paytax on everything you make everywhere.(For the differencesee taxation basis) Most places will tax…
