Whether your organization is contemplating a global move or is already involved in international business, you need to know about the activities that create multi-jurisdictional tax exposure and the required tax reporting for each relevant jurisdiction. Information is provided for Tax Reform and the impact of the Tax Cuts and Jobs Act of 2017, this guide covers international tax terminology and regulations that apply to a U.S. entity involved in global operations, or for a foreign entity doing business in the United States.
Key topics include:
- Export income
- Receipts in foreign currency
- Allocation and apportionment of deductions
- U.S. foreign tax credit fundamentals and special rules
- Initiation of foreign operations
- Foreign branches and affiliated companies
- Sale of use of tangible property
- Foreign business operations in the United States
- Foreign business sales of tangible property in the United States
- Foreign business provision of services in the United States
- Exploitation of business assets outside of the United States
- Use of foreign tangible/intangible property in the United States
- U.S. withholding taxes on foreign businesses
- FDII
- GILTI
Table of Contents
Chapter 1 1-1
Overview of U.S. Corporate International Taxation 1-1
Summary 1-2
U.S. Outbound Tax Concepts 1-3
U.S. Inbound Tax Concepts 1-4
Other fundamental U.S. international tax concepts 1-5
International tax fundamental concepts 1-6
Recognition of income 1-8
Introduction of International Tax Provisions enacted by the TCJA 1-10
Introduction and listing of U.S. international tax provisions 1-11
U.S. Export Tax Incentive through an IC-DISC 1-15
Chapter 2 2-1
Foreign Branches 2-1
Operating through a foreign branch - summary 2-2
Form 8832, “Entity Classification Election” - “check-the-box” election 2-8
Threshold of liability to foreign tax 2-10
Foreign currency issues as applied to branches, or QBUs 2-11
QBU 2-14
Section 988 transactions 2-22
Dispositions of nonfunctional currency 2-24
Translations with respect to debt instruments 2-26
U.S. dollar approximate separate transactions method 2-30
Chapter 3 3-1
Determining Source of Income 3-1
Personal property 3-9
Chapter 4 4-1
Allocation and Apportionment of Deductions 4-1
Allocation and apportionment of expenses, losses, and other deductions to U.S.
and foreign-source income 4-2
Allocation and apportionment of certain deductions 4-5
Allocation and apportionment of interest expense 4-6
Special apportionment rules for partnerships 4-11
Special apportionment rules for corporations 4-12
Special allocations of interest expense 4-13
Research and experimentation expenditures 4-15
Chapter 5 5-1
U.S. Foreign Tax Credit System 5-1
FTC system post-TCJA overview and status 5-2
Internal Revenue Code sections dealing with foreign taxes 5-3
FTC expanded rules and examples 5-18
Creditable foreign taxes 5-25
Timing and recognition issue 5-27
Partnerships, LLCs (taxed as U.S. partnerships), and S corps 5-33
Chapter 6 6-1
Outbound International Tax Provisions under Tax Cuts and Jobs Act 6-1
Note to Reader or Practitioner 6-3
CFCs and Subpart F - Outline 6-5
Foreign base company sales income - Examples 6-15
FBC Services Income - Example and details 6-21
TCJA outbound international tax provisions 6-23
PFICs 6-43
Transfers of property by U.S. persons to foreign corporations - Section 367 6-46
Chapter 7 7-1
Inbound Taxation: U.S. Withholding Tax & Tax Treaty Concepts 7-1
Threshold for U.S. inbound taxation 7-3
U.S. trade or business > Effectively Connected Income (ECI) 7-6
Thin capitalization - interest expense limitation rules 7-10
FIRPTA - Section 897 7-14
U.S. inbound tax reporting obligations 7-17
IRC Chapter 3 - U.S. source withholding tax 7-18
IRC Chapter 3 withholding tax rules 7-20
FDAP (not ECI) 7-22
FDAP - Interest payment 7-23
FDAP - Dividends 7-25
FDAP - Royalties 7-28
FDAP - Rents 7-29
FDAP - Compensation for services 7-30
FDAP income 7-31
Gains from sale of personal property (for example, capital gains) 7-32
ECI exemption 7-33
Withholding tax obligations and procedures 7-34
Payment of withholding tax 7-37
Penalties for failure to withhold 7-39
Backup withholding 7-41
Partnership allocations 7-42
Withholding agent’s payment and reporting requirements - U.S. partnership 7-44
IRC Chapter 4 - FATCA “withholding” 7-45
Summary of U.S. tax treaties and conventions 7-48
U.S. bilateral income tax treaties 7-52
Chapter 8 8-1
Transfer Pricing and BEPS Overview 8-1
Summary of U.S. Transfer Pricing rules 8-2
BEPS 8-26
Glossary Glossary 1
Index Index 1
Solutions Solutions 1
Chapter 1 Solutions 1
Chapter 2 Solutions 1
Chapter 3 Solutions 3
Chapter 4 Solutions 4
Chapter 5 Solutions 5
Chapter 6 Solutions 7
Chapter 7 Solutions 8
Chapter 8 Solutions 12
