Inbound tax consultancy services
Issues considered in investing and/or expanding to the US
- Structuring US real estate investment including optimising use of debt.
- Providing optimal tax structures for US expansion with a focus on US federal and state tax on short and a medium-term cash flow and long-term exit strategy. For example, a US business that will reinvest profit into growing the US business is likely better placed to be structured as a US corporation enjoying the lower US corporate rate (21%) than using (for example) a partnership owned by individuals taxed at higher US individual income tax rates (currently to 37%).
- Planning for withholding tax. US withholding tax rates are currently at 30% for interest, dividends, royalties, etc. There are a number of exceptions to these domestic rates that may be available through proper planning
- Treaty analysis – There are over 60 US tax treaties that Inbound taxpayers can access to reduce US withholding and other federal tax.
- Optimising the overall tax position through inter-company charges. US tax may be mitigated through a review of the overall business and, where possible, having non-US affiliates charge fees to a US enterprise for items such as use of IP, management and other services, etc.
- Planning with intellectual property – Intellectual property, being a highly “mobile” asset may, sometimes be placed in an optimal tax jurisdiction to enhance the overall tax position of the group.
- Assisting with pre-immigration planning for high-net worth individuals. Individuals moving to the US can enhance their overall US tax position by looking at what they own in the way of business interests, investments and consider what measures should be taken prior to US arrival achieve US tax “basis” step ups, or otherwise mitigate the impact of US anti-tax deferral rules including the Controlled Foreign Company and Passive Foreign Investment Company regimes.
- Advising on disposals of interests in US real property. The US imposes a 15% withholding tax on the disposal of various interests in US entities, real estate, etc. this withholding can be reduced prior to a disposal through proper planning or compliance.
- Financing US operations and investments. Proper planning with financing a US operation or investment can yield significant overall tax efficiency which most often needs to be implemented at the beginning of the investment or expansion.