Issues typically addressed on behalf of foreign (non-U.S.) companies and individuals doing business or investing in the United States:
For companies (including pooled capital and private equity funds):
- Analysis and structuring to, where possible, avoid crossing the threshold of activity or presence that would trigger U.S. income taxation, especially under the “permanent establishment” concept of international income tax treaties (including activities on the U.S. “outer continental shelf”);
- Selection of entity and structuring of ventures to avoid multiple tiers of U.S. income taxation;
- Balancing equity vs. debt financing of the U.S. operation, including maximizing use of special exemptions for interest, such as interest on “portfolio debt,” with an awareness of the U.S. “anti-earnings-stripping rules”;
- For closely-hold companies, coordination with U.S. estate tax concerns of the individual owners and addressing differences in corporate and non-corporate income tax rates, especially on capital gains;
- Cross-border aspects of Section 409A rules applicable to “nonqualified” deferred compensation plans;
- For foreign banks, investment brokerage firms, and other financial institutions, applying the U.S. rules for “qualified intermediaries” and “nonqualified intermediaries” with respect to U.S. investments of both U.S. and non-U.S. clients;
- Arranging cross-border corporate re-structurings to take advantage of tax-deferral opportunities (U.S. “tax-free reorganization” rules), purge disadvantageous tax attributes, and to avoid certain punitive U.S. anti-expatriation (“anti-inversion”) rules;
- For banks, investment brokerage firms, and other financial institutions, ensuring compliance with U.S. rules to confirm tax status of clients (e.g. Form W-8BEN or Form W-9);
- “Transfer pricing” issues, that is, minimizing the risk of an IRS challenge to pricing on transactions between related companies;
- Responding to the IRS on international tax issues.
For individuals:
- Structuring to minimize the U.S. estate tax while retaining exemptions and lower capital gain tax rates available to individuals and non-corporate entities under the U.S. income tax;
- Dealing with the U.S. “anti-expatriation rules” for individuals renouncing U.S. citizenship or long-term permanent residency (“green card holders”).