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International Tax Practice Overview  

JPC International Tax Advisors (formerly known as Ogle International Tax Advisors) has sustained a reputation for our experience and expertise in international tax matters.  Our certified public accountants and attorneys are well versed in critical international tax areas positioning us as a leading firm for clients requiring not only tax planning but also the management consulting needed to coordinate the tax and operational aspects of the business.  In addition to advising our clients, we are often retained by other accounting and law firms to provide tax advice to their clients. We advise and consult with our corporate and individual clients in the following International Tax Practice Areas: 

Corporate:

Structuring of Foreign Investments (Outbound)

We provide practical cross-border tax planning strategies on structuring U.S. owned investments in foreign markets. We understand our client’s specific business goals and objectives as they expand on a global basis and guide them through the complexities of cross-border tax laws and relevant business issues.

Whether you are at the start of a new foreign investment, planning additional foreign investments or desire to restructure and make it more tax efficient, our professionals tailor and employ business-driven structures and uncover planning opportunities that address your needs.

Our U.S. Outbound tax planning strategies focus on number of factors that potentially impact foreign investment, including:

  • Local country tax rules and comprehensive income tax treaties
  • Client's foreign investment portfolio and foreign tax credits management
  • Legal entity structure
  • The need for a holding company
  • Partnership planning
  • Profitability and foreign loss planning
  • Repatriation strategies
  • Debt financing and restructuring
  • Transfer pricing

In the area of tax compliance, our professionals can prepare all of the annual tax forms for U.S. taxpayers related to foreign investments permitting a seamless integration of tax planning and compliance functions with one advisory group. We also offer accounting support for the foreign entities that will allow for the preparation of U.S. tax reporting forms.

Anti-Deferral Tax Strategies

We can advise you with the deferral planning inherent in cross-border transactions. Deferral planning is one of the most important strategies utilized by U.S. multinationals and individuals to reduce their global effective income tax rate.

In general, the anti-deferral tax rules can apply when U.S. individuals, U.S. corporations, U.S. limited liability companies or partnerships composed of U.S. members or partners engage in foreign business or investment activities.

The deferral privilege is the feature of U.S. international income tax law that generally allows a U.S. person to conduct business activities abroad through a foreign corporation without paying U.S. tax on the corporation's foreign-source earnings until they are distributed to the U.S. person or the U.S. person sells the foreign corporation's stock.

To prevent abuse of the deferral privilege, Congress over the years has enacted anti-deferral tax regimes, which curtail deferral in certain specified circumstances. The Internal Revenue Code contains anti-deferral tax provisions relating to controlled foreign corporations (CFC’s), and passive foreign investment companies (PFIC) that require their U.S. owners to include certain types of income (e.g. Subpart F income) of foreign companies in their U.S. taxable income on an annual basis, regardless of whether such income is repatriated to the U.S. owners as dividends.

In the area of tax compliance, our professionals can prepare all of the annual tax forms for U.S. taxpayers related to foreign investments permitting a seamless integration of tax planning and compliance functions with one advisory group.  We also offer accounting support for the foreign entities that will allow for the preparation of U.S. tax reporting forms.

Structuring of U.S. Investments (Inbound)

We provide tailored inbound tax planning and compliance services to foreign companies and their U.S. subsidiaries. Our experienced international tax professionals assist clients in understanding and navigating through the complexities of U.S. tax laws impacting foreign-owned U.S. companies.

Understanding that the U.S. tax regime can negatively impact non-U.S. companies, our professionals offer cross border tax planning strategies to the U.S. subsidiary and its foreign parent corporation in order to minimize their global effective tax rate while fulfilling their business needs.

Our U.S. Inbound tax planning strategies focus on a number of factors that potentially impact U.S. investments, including;

  • The tax rules of the foreign jurisdiction where the foreign corporation is located
  • The foreign corporation's other foreign investments and overall global tax position
  • The foreign corporation's legal entity structure
  • The need for a holding company
  • The current and expected profitability of the foreign corporation and their U.S. investments(s)
  • The cash flow requirements of the foreign corporation and their U.S. investment(s) (Repatriation Strategy)
  • Current and planned debt financing for the foreign corporation and their U.S. investment(s)
  • Activities, functions, and ownership risks of the U.S. investment (Transfer Pricing)

In the area of tax compliance, our professionals can prepare all of the annual tax forms related to a foreign corporation’s U.S. investments permitting a seamless integration of tax planning and compliance functions with one advisory group.  We also offer accounting support for the U.S. entities that will allow for the preparation of U.S. tax reporting forms.

Mergers, Acquisitions and Corporate Transactions

We assist clients on tax issues related to multi-national mergers and acquisitions (“M&A”). We represent purchasers, sellers, financing sources, management, and advisors in a wide variety of transactions, including equity and asset acquisitions of both entire companies and subsidiaries or divisions.

Our multi-national M&A tax planning and compliance services include but are not limited to the following areas:

  • Performing M&A tax due diligence
  • Reviewing tax provisions in acquisition agreements
  • Providing tax planning solutions in both the pre and post merger periods
  • Advising on tax free and partially tax free acquisitive reorganizations, and
  • Advising on tax divisive strategies including spin-offs, split-offs and split-ups
  • Profitability and foreign loss planning
  • Repatriation strategies
  • Debt financing and restructuring
  • Transfer pricing

The complex and technical tax planning issues and considerations addressed during the M&A period extend to the post M&A period after the acquisition is complete. Our professionals have the experience to advise and assist clients during the post M&A period.

In the area of tax compliance, we can prepare all of the annual tax forms and statements for U.S. taxpayers related to M&A permitting a seamless integration of tax planning and compliance functions with one advisory group. We also offer accounting support that will allow for the preparation of U.S. tax reporting forms.

Transfer Pricing

We offer comprehensive transfer pricing studies that permit our clients to minimize tax exposure, defend their U.S. tax return positions, and develop efficient transfer pricing practices across borders. We understand transfer pricing, how it is treated by various tax jurisdictions, and “best practices” for managing global policies and procedures.

Our experienced professionals perform a thorough transfer pricing study process involving:

  • Identification of products/services transferred through a detailed review of related parties and related transactions
  • Identification of best transfer pricing methodology for your particular business offering the most reliable measure of arm's length results
  • Identification of reasonable arm's length price ranges
  • Preparation of reports for compliance with the "best method rule", including supporting documentation

Our completed transfer pricing study report enables our clients to:

  • Ensure that compliance requirements are satisfied, thereby minimizing the risk of transactional or net adjustment penalty exposure
  • Identify future tax planning opportunities to minimize your overall global tax rate

Ogle International Tax Advisors bring the needed transfer pricing experience and partnership approach that can simplify the technical complexities our clients face with multiple overlapping tax jurisdictions. This is important because tax authorities are demanding stricter penalties, additional documentation requirements, increased information exchange, and increased audit/inquiry activity.

Export Tax Incentives

We have the expertise and experience to help clients realize the highest level of immediate and permanent tax savings. We specialize in assisting exporting companies maximize both export tax savings and foreign tax credits for all open tax years.

The Interest-Charged Domestic International Sales Corporation (“IC-DISC”) is a vital part of the corporate tax plan as the only 100% safe harbor tax benefit available. Our professionals help structure and implement the IC-DISC, providing exporters with significant savings, increased cash dividends, increased cash flow, and a reduced taxable base.

We work closely with our client’s accounting, tax, and legal departments to obtain the necessary information to prepare the IC-DISC calculations and supporting documentation, allowing a smooth integration of tax planning and compliance functions with one advisory group.

IRS Representation

We represent clients before the IRS regarding examinations, appeals, litigation, and private letter rulings. We also assist U.S. taxpayers such as U.S. based companies and foreign companies with a taxable presence in the U.S. who may not have filed, or filed incomplete or inaccurate tax returns in previous years.

Due to inadvertent errors or omissions, or differences in tax laws between the U.S. and foreign countries, the historical accounting may require additional analysis to correct previously filed returns. We work closely with our client’s accounting, tax, and legal departments to provide any necessary accounting analysis to ensure compliance with U.S. tax laws.     

During certain client representations, we work with a client's law firm under a Kovel arrangement to assist the lawyer in rendering legal advice. Our services in this area may include tax accounting and return preparation for prior years where there is a desire to maintain an attorney-client privilege for sensitive tax matters.

Individual:

IRS Voluntary Disclosure

We assist U.S. taxpayers, U.S. citizens and foreign individuals, who may have not filed, or filed incomplete or inaccurate tax returns in previous years. 

The IRS offers a couple of methods to file prior year returns:

  • Offshore Voluntary Disclosure Program (OVDP) works with taxpayers whose penalties may be reduced. It encourages taxpayers to disclose foreign accounts voluntarily rather than risk detection by the IRS and incur possible criminal prosecution. Taxpayers who are concerned that their failure to report income, pay tax, and submit required information returns was due to willful conduct and who therefore seek assurance that they will not be subject to criminal liability and/or substantial monetary penalties should consider participating in the Offshore Voluntary Disclosure Program. 

  • Streamlined Filing Compliance Procedures are available to taxpayers certifying that their failure to report foreign financial assets and pay all tax due in respect of those assets did not result from willful conduct on their part. Certain restrictions apply.

Our professionals advise and assist taxpayers on various planning and compliance issues related to historic filing requirements. We are experienced in each of the different methods of disclosing prior-year tax filings for taxpayers that failed to properly report their foreign investments. We work closely with each client and their attorney to ensure tax compliance and to minimize tax and penalty exposure. We often assist a taxpayer's legal adviser under a Kovel arrangement when the client is determining whether to particpate in the OVDP.

Foreign Account Reporting

We assist taxpayers to comply with reporting requirements for financial accounts held outside of the United States. 

Foreign Account Tax Compliance Act (FATCA) was enacted in 2010 under the Hiring Incentives to Restore Employment (HIRE) Act. The act not only requires U.S. taxpayers to report financial accounts held outside of the United States, but also requires foreign financial institutions to report to the Internal Revenue Service (IRS) their U.S. account holders. U.S. taxpayers owning these foreign accounts or other specified financial assets, over certain thresholds, must report them on IRS Form 8938, Statement of Specified Foreign Financial Assets, with their Federal tax return. Failure to report these assets may result in a $10,000 initial penalty and additional penalties up to $50,000.

U.S. taxpayers are also required to report foreign financial accounts to the U.S. Treasury. This reporting is done separately from a U.S. taxpayer’s Federal income tax return, on FinCEN Form 114 "Report of Foreign Bank and Financial Accounts" (FBAR).  U.S. taxpayers are required to report foreign financial accounts if they have a financial interest in OR signature authority when the aggregate value of the account(s) exceeds $10,000.  Failure to file this form, if required, may result in a $10,000 penalty per violation. A person who willfully fails to report an account or account identifying information may be subject to a civil monetary penalty equal to the greater of $100,000 or 50 percent of the balance in the account at the time of the violation. If there is reasonable cause for the failure and the balance in the account is properly reported, no penalty will be imposed.

From a tax planning and compliance perspective, our professionals advise and assist taxpayers related to current and historic filing requirements. We are experienced in utilizing the different methods of disclosing prior-year tax filings for taxpayers that failed to properly report their foreign investments.

Earned Income Exclusion (Living and Working Abroad)

We understand the difficulties encountered by many Americans and permanent residents who work abroad dealing with the additional expenses and difficulties of living abroad. Day to day issues are further complicated at year end when income tax returns are due.

Generally speaking, U.S. citizens must pay income tax to the country in which they work while remaining subject to U.S. taxation. The fact that the U.S. is the only developed country in the world that imposes taxes based upon citizenship and not on residence can result in double taxation. This double taxation can be particularly detrimental to U.S. citizens working in foreign countries with high income tax rates.

U.S. tax law, however, provides some relief by allowing U.S. taxpayers who meet certain requirements to elect to either exclude from U.S. taxation a limited amount of foreign earned income plus housing costs or to claim in certain instances a credit for foreign income taxes.

We assist clients with the complexities of the earned income exclusion as well the foreign tax credit calculation. Our professionals advise clients on how to meet and document tax requirements and how to review employment agreements for base compensation, bonuses, and reimbursement of housing and moving costs. We also provide tax advice as to whether to elect the exclusion or use the foreign tax credit and subsequently, whether to leave the exclusion election in effect or to revoke it.

Expatriation Planning (Renouncing Citizenship)

We assist U.S. citizens and long-term U.S. residents who have relinquished their citizenship or terminated their “green card status” or who are considering to do so with tax planning and ongoing tax compliance needs.

U.S. citizen(s) or U.S. permanent resident(s) living and working abroad are required to file annual U.S. tax returns, reporting both U.S. and foreign sourced income. Those who choose to relinquish citizenship or terminate residence also have U.S. tax obligations pursuant to Internal Revenue Code Section 877A. The Heroes Earnings Assistance and Relief Tax Act of 2008 amended the provisions of Section 877, establishing objective standards for determining whether expatriating individuals are subject to taxation under the new tax regime. The current method applies to individuals who expatriate after June 17, 2008. Individuals meeting certain criteria may be considered a “covered expatriate” subject to tax upon expatriation. All property of a covered expatriate shall be treated as sold on the day before the expatriation date for its fair market value. Any gain arising from such sale shall be taken into account for the taxable year of the deemed sale. The gain shall be reduced by $600,000 (adjusted for inflation for calendar years after 2008) but not below $0.

Our professionals help clients determine whether Section 877A is applicable and ensure the proper forms are filed initially and annually to comply with IRS regulations. We work closely with each client and their immigration attorney to ensure tax compliance, minimize tax exposure, and bring the most value to their expatriation. Note that expatriation before June 17, 2008 are subject to a different Internal Revenue Code section. Please contact us for more information.

Non-residents with Financial Activities (FDAP)

We offer both international tax planning and compliance services to non-U.S. residents and foreign corporations receiving FDAP income.

We work very closely with our clients to understand the economic and business objectives underlying their current or proposed U.S. financial activities and investments.

From a tax planning perspective, our professionals advise and assist foreign investors on various planning issues specifically related to financial activities such as:

  • Purpose of investment - income generation or capital appreciation
  • Ownership acquisition - by a corporation, partnership, trust or an individual
  • If Corporation ownership - using a foreign or domestic corporation
  • Investment financing - equity or debt
  • If debt financing - from non- or U.S. sources
  • How to restructure existing investments

In the area of tax compliance, our professionals can prepare all of the year-end income tax and property disposition withholding tax returns for foreign investors.

Non-residents owning U.S. Real Estate Interests (FIRPTA)

We offer both international tax planning and compliance services to non- U.S. residents and foreign corporations investing in, acquiring and selling “U.S. Real Property Interests.”

We work very closely with our clients to understand the economic and business objectives underlying their current or proposed investment(s) in “U.S. Real Property Interests.”

From a tax planning perspective, our professionals advise and assist foreign investors on various planning issues specifically related to “U.S. Real Property Interests” such as:

  • Purpose of investment - income generation or capital appreciation
  • Ownership acquisition - by a corporation, partnership, trust or an individual
  • If Corporation ownership - using a foreign or domestic corporation
  • Investment financing - equity or debt
  • If debt financing - from non- or U.S. sources
  • How to restructure existing investments

In the area of tax compliance, our group can prepare all of the year-end income tax and property disposition withholding tax returns for foreign investors.

Puerto Rican Tax Incentives

We offer both international tax planning and compliance services to U.S. citizens who are considering relocating to Puerto Rico. 

The U.S. Internal Revenue Code of 1986, as amended (the “Code”), provides special rules for an individual who is a bona fide resident of Puerto Rico. Under these special rules, income from sources within Puerto Rico is not included in gross income and is not subject to US federal income tax.

In January 2012, Puerto Rico passed Act No. 22 of 2012 (“Act No. 22”). Act No. 22 contains numerous incentives to encourage individuals to relocate to Puerto Rico. The law provides the following benefits to new Puerto Rico bona fide residents on qualified investments (more on who qualifies as a new bona fide resident below):

  • 100% tax exemption from Puerto Rico income taxes on all dividends
  • 100% tax exemption from Puerto Rico income taxes on all interest
  • 100% tax exemption from Puerto Rico income taxes on all long-term capital gains

The new resident must not have been a resident of Puerto Rico at any time during the 15-year period preceding the effective date of Act No. 22 (i.e., January 16, 1997 through January 16, 2012).

Other complementary laws were enacted in 2012, mainly:

  • The Export Services Act (Act 20 of 2012), which provides for 4% maximum tax rate on income related to services for exportation provided by new Export Services businesses in Puerto Rico.

  • The International Financial Center Regulatory Act (Act 273 of 2012), with the objective of making Puerto Rico an international banking and financial center by providing tax incentives (mainly, a 4% income tax rate) for new banking and financial activity in Puerto Rico that is done for clients outside of Puerto Rico.

In summary, dividends, interest or long-term capital gains received by a new Puerto Rico bona fide resident from sources within Puerto Rico, will not be subject to U.S. or Puerto Rican income taxes.

The IRS must be notified when an individual becomes or ceases to be a bona fide resident of Puerto Rico. The notification must be filed by the due date of the U.S. income tax return for the year.

From a tax planning perspective, our professionals advise and assist U.S. citizens on how to meet the requirements under the applicable laws and to restructure their existing investments to minimize their global tax rate.

In the area of tax compliance, our professionals can prepare all of the forms required to report the change in residence to Puerto Rico and reflect the changes on the annual Federal U.S. tax return.