Stephen C. Fox, CPA
U.S. International Tax
Stephen C. Fox, CPA, CMA
PO Box 880695
Port Saint Lucie,  FL  34988
+1(973) 610-5669
   International Tax      Ideas
 

Ideas

Stripped Distributors

Distribution operations in high tax countries should be structured as commissionaires or stripped distributors.  Functions and risks are reduced for the distribution company, thus reducing the profit properly allocable to that company.
 

Avoid 956

U.S. shareholders of controlled foreign corporations (CFCs) must include in their income the amount of any loans by the CFC to the shareholder or a related U.S. person. Multinational corporations with treasury activities overseas can avoid this income inclusion with the right planning.
 

Unitary Commissionaire/First Sale

Use California as a tax haven!  Taxpayers who export products from the U.S. to their foreign sales subsidiaries can reduce foreign income tax, foreign customs duty, and state income taxes and defer federal income tax on sales overseas.
 

Intangibles Migration

Reduce foreign tax and defer U.S. tax by developing foreign marketing intangibles in an offshore sales subsidiary.  With careful planning and structuring, a low tax foreign subsidiary can earn a substantial portion of profits from foreign sales activities without triggering U.S. tax.
 

Deconsolidate with Preferred

In computing the foreign tax credit limitation and DISC benefits, interest expense must be apportioned on an consolidated group basis.  This can be mitigated if foreign subsidiaries and sales are placed in a deconsolidated affiliate.
 

Cross Chain Sale to Free Trapped Taxes

Use a sale between foreign subsidiaries of shares of another foreign subsidiary to move E&P and taxes. Careful planning and E&P studies are required to avoid artificial income.  The utility of this idea has been limited in the jobs bill (HR 1586) passed and signed August 10, 2010.
 

 
It's your business:  get personal.  Call Steve Fox at  1(973) 610-5669  or  email steve @ sfoxcpa .com
Get the best tax reference source, available for your desktop or portable device:   Income Tax in the USA 2016