International Tax

Topics

July 1, 2007

Increased Compliance Burden under New Sec. 987 Prop. Regs.

Editor: Annette B. Smith, CPA Increased Compliance Burden under New Sec. 987 Prop. Regs. In September 2006, the IRS issued new proposed regulations (REG-208270-86, 9/7/06) (2006 Prop. Regs.) that provide guidance under Sec. 987 in determining foreign currency gains and losses of qualified business units (QBUs) operating in a functional

July 1, 2007

Hybrid Financing Structures

Editor: Annette B. Smith, CPA Over the years, hybrid financing structures (Structures) have attracted scrutiny from the IRS and Treasury. Structures generally use a combination of hybrid entities and hybrid notes to achieve a “double dip”—i.e., a deduction in two different taxing jurisdictions on the same loan, through intercompany financing

July 1, 2007

Choice of Entity for Expansion of Operations into a Foreign Country

Executive Summary When flowthrough treatment is desired, a U.S. business may expand into a foreign country with a branch office or plant. A foreign partnership is advantageous when foreign operations are expected to generate flowthrough losses to a U.S. partner, and foreign taxes are high. A foreign corporate entity

May 1, 2007

Withholding Requirements for Nonresident Directors’ Fees

Editor: Terence E. Kelly, CPA Multinational corporations are taking advantage of worldwide expertise to adapt to the changing economic landscape. Corporations frequently have foreign nationals on their boards of directors. This item will assist U.S. companies and/or tax professionals dealing with the taxation of such directors. Cross-Border Example A resident

May 1, 2007

U.S. Investment in German REITs

Investment in German real estate has increased significantly, in part because the German market is perceived as less inflated than others. In response to such demand and to offer an internationally recognized investment vehicle, on Nov. 2, 2006, the German government issued a draft bill for the introduction of German

May 1, 2007

Changes to Subpart F Services “Substantial Assistance” Test

Editor: Terence E. Kelly, CPA Subpart F of the Code provides that U.S. taxpayers doing business through the use of certain controlled foreign corporations (CFCs) may be subject to current income inclusion when a CFC derives foreign base company services income (FBCSI). FBCSI generally includes income from services a CFC

April 1, 2007

Time to Evaluate Cost-Sharing Arrangements

Co-Editors: Michael Metz, CPA; Nick Gruidl, CPA, MBT Treasury proposed new regulations on cost-sharing arrangements (CSAs) in REG-144615-02 (8/29/05). CSAs can help businesses operate in the global marketplace in a tax-efficient manner; however, the proposed regulations need to be carefully reviewed. Definition CSAs, formally prescribed by regulations effective on Jan.