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Provocative International Tax News

offshore tax planning, offshore tax strategies, controlled foreign corporation,

Tax Planning Small Business Are Taxed at 14%

Government Report Shames Businesses Paying More than 14% in Taxes.    Difficult to believe that Senator Bernie Sanders  (who paid tax at 13%) released the report.  It states that business that plan their taxes are taxed at 14%. Here’s what’s going on.   

Small Business Tax Planning. Try very hard to pay the least in taxes

Small Business Tax Planning. President Trump states that he try very hard to pay the least in taxes

Meanwhile, after the defeat of the Health Care Reform,  the Trump Tax Reform is looking at an August vote.   Keep up to date on this link.    As in the case of President Trump,  we all have to work hard to pay the least in taxes.   Tax savings is not as simple as a year-end call to your CPA.    On this link, you will learn how to get your tax rate down to 14%.

International tax planning for the Contract Manufactuere

International tax planning for the Contract Manufacturer

Amazing tax savings for importers of contracted manufacturer of their products.  This new IRS law gives tax savings to small businesses.  Learn more on this link and send it to your CPA.
For additional small business tax savings get my book International Taxation in America for the Entrepreneur on sale for $9.50 on this link.

 

Small businesses are now reaping big tax savings.  Importers, exporters, and e-commerce business can use the same loopholes as big business. I wrote my book to teach you these tried and true strategies in an easy two-hour read.

International tax planning

Buy at Amazon for only $9.50.

But, I did more.  I had an audiobook created.  It downloads onto your smartphone so that you can listen while you are commuting.   Get the 2017 edition of  International Taxation in America for the Entrepreneur for $9.50 at Amazon on this link.

 

saving taxes, how to save taxes, tax planning,

Saving taxes with an IRS approved tax plan is called a private letter ruling.

International Gift Tax Plans with this IRS internal letter on this link. Fantastic legal tax avoidance for the foreign person with family in the U.S. is explained in this letter.

  • Avoiding state income taxes this new IRS  designer  Nevada trust.  IRS tells how to use your Nevada corporation as your trustee to legally stop paying state taxes on your investment income. Here’s what’s happeningon this link.

New- Saving international taxes with this letter from the U.S. Department of the Treasury letter to the U.K. tax authorities on tax planning in the U.S. for UK and EU companies.

Tax planning, with the Supreme Court common tax laws

Tax planning with Supreme Court common tax laws

18th Century Supreme Court case destroys IRS tax penalty law. Using this case, the Tax Court gave the IRS a big defeat.  Here is what happen.   The Supreme Court is the “Law of the Land.”  It rules over the IRS and Congress.   

It works both ways.  The blog on this link explains the most missed Supreme Court Doctrine use by the IRS to blow up this offshore plan.

international tax planning, international, tax, planning,

International tax planning and international tax savings with this Treasury Department report. 

The secret report on tax savings international tax plans that the IRS cannot stop was issued by the U.S. Department of the Treasury (a branch of the White House).

They reported the successful foreign tax plans of international businesses. We have obtained a copy.  It is on this link.   Here you will learn the legitimate foreign tax plans that Congress likes. 

offshore trust, foreign trust, nevada trust, estate planning trust, esbt,    Since the Middle Ages, the wealthy have capitalized on trusts to avoid paying taxes. During the Great Crusades, upon the death of a knight, his entire estate went to the king.    Nine hundred years later, things have not changed much except the ‘King” takes only half.

Trust are the most efficient tax tool. International tax planning should start with a Nevada trust to own the foreign company.  Learn trust tax planning and asset protection on this easy to read blog post.    It has the blueprint for successful trust tax planning.   IRS memo on asset protection and tax planning with an offshore trust.  Get it now on this blog post.

internet tax planning, saving taxes, cloud tax planning

Saving taxes with the cloud-based

Cloud tax planning. Learn how businesses are using the cloud to save taxes on this link.  E-commerce companies are avoiding state income taxes and in some cases deferring U.S. taxes.

Be an IRS tax wizard with our new custom Google search, on this link.  This custom Google app to read 400,000 pages deep inside the IRS’s website and the tax court’s website.

Foreign Investors Learn Why a Corporation and Family Limited Partnership is U.S. Death Tax Trap

The problem for the non-resident alien is that their estate tax exemption is $60,000 and not $5.3 million (as it is for Americans).   And there is one more problem… the U.S. estate tax planner.  While the U.S. has a tax on the estate, other countries tax the recipient.  This tax is called an “inheritance tax.”

Thus the  American tax planner also must know “international inheritance tax planning” for the foreign country of the investor.

They advise the nonresident alien (the term for estate and gift taxes is “nondomiciled“) to own their U.S. investments and U.S. real estate through a foreign corporation (such as a Panamanian company or a British Virgin Island company).  

Since the 1950’s, this tax plan has failed.  The U.S. courts have ruled for the IRS (more on these cases on this link).  These court cases focused on the power to revoke (section 2038) and the right to the corporate dividends (section 2036).  These tax laws  required the assets owned by the foreign entity to be included in the deceased’s U.S. taxable estate

The best estate tax planning method for the foreign investor involves a trust.   Here is a link on the basics.  In Europe and the United Kingdom are subject to an inheritance tax.  Estate taxes and inheritance differ.  This difference challenges international inheritance tax planners. 
Continue reading

Avoiding the Form 1120F- Foreign Corporation Branch Profits Tax Trap

Preparing the Branch Profits Tax section of the IRS form 1120F  has trapped many foreign investors in U.S. real estate and with US business operations.

 In addition to paying income tax on your profit, the foreign corporation pays tax again on the change in the value of its U.S. business. 

The branch profits tax is based upon a law from the 1950’s. The section 531, tax on accumulated earnings, was deadly to a small business.  However, now most small businesses operate in S-corporations or limited liability company. Since entities of this type are pass through, avoid section 531 does not apply.   Because of this many tax professionals are unaware of this law.

The branch profits tax is just as deadly to the foreign business.  This tax applies if the foreign corporation has income effectively connected with a U.S. business. The applies if the corporation has either a permanent establishment of a fixed place of business.

 If you want help preparing your Form 1120F, then call me Brian Dooley, CPA, MBT at 949-939-3414.

Some CPA’s are advising their clients that keeping assets on the American branch office balance sheet avoids the branch profits tax.    Just holding assets on the books,  does prevent the branch profits tax.  The assets must be continued to be used in an active corporate business.

Section 531 (a tax on accumulated distribution) is the concept used when the branch profit tax was enacted.  Under this section, the corporation must prove the business reason for keeping liquid assets.   The point of section 531 is to cause the second tax.  This is a tax on a dividend that the corporation has refused to distribute.

Likewise, the IRS can impose the branch profits tax when a foreign corporation with a US branch merely retains liquid assets just to avoid the tax.   

Upon a distribution of property to the shareholder of a foreign corporation, the 30 percent branch profits tax apply.  Similar to section 531, corporation needs to maintain ongoing director minutes, shareholder minutes and business plans explaining why assets are not distributed to the shareholder or the home office.

Learn about winning the IRS audit of the branch profits tax on this link.   On this link, find out more innovative methods to eliminate both the branch profits tax and foreign corporation income tax on this link.   If you need help with an international tax audit, then contact me at[email protected]

tax planning, international tax strategies, foreign tax strategies, foreign tax plan, international tax plan, offshore tax,

Learn how to save taxes with “International Taxation in America for the Entrepreneur” using tried and true methods.

If you would like to us to prepare your Form 1120F,  then please call me, Brian Dooley CPA, at 949-939-3414.  

Learn move about international tax planning with my easy to read book, International Taxation in America for the Entrepreneur available at Amazon on this link.  The book takes about two hours to read.

 

 

U.K. and Europe’s Tax War on the U.S. Treasury Heats Up.

The Financial Times of London  reported that the Obama administration is continuing its protest of the gangster-like theft by the EU and the UK government’s.   This week President Obama told the EU to back off from taxing Apple (more on this link).

But if you can’t make your wealth, you need to take it from others.  This is called taxes.

As the socialist spending of the UK and the EU countries increase European poverty in France, Spain, Greece and Italy, the EU continues its raid on the U.S. Treasury.  

To get America’s money, these countries merely break the tax treaty that has prevents tax wars.  Each tax treaty has a “permanent establishment”  safeguard.  So, far the White House is silently allowing the English and the Europeans to win this war. 

The Financial Times of London reports, that European Commission is intensifying its attack on American digital and wealth companies.  The list includes, Skype, Netflix, Amazon, Apple and Google.   And why not?  All the U.K  and EU taxes will be paid by you and me.    Why? Will read a little more.  (Update Sept. 17, 2016: Microsoft has moved  Skype from the U.K. laying off all the British employees; Update Sept 19, 2016 the UK wants McDonalds to pay half a $billion despite the U.S-U.K. Tax Treaty). 

Since I first posted this article, the UK intimidated Starbucks to make a “donation” of million of dollars.  The EU has gone after McDonald’s fast food.  Maybe it is time for the U.S. to get tough.  We can save $billions by letting bringing home our troops in Germany.

The Times reports “The EU’s intensifying assault on big American tech groups has triggered mounting criticism in the US, including by President Barack Obama, of European protectionism.”  But there is more at stake.  It is money….lots of money.

The Raid on the U.S. Treasury

The Europeans and the British are simply ignoring the tax treaty with the United States. For a century, these treaties do not tax a foreign business unless they have a “fixed place of business” and a “permanent establishment” in the other country.  The EU and the UK is squeezing money out of American businesses by ignoring these rules.

The raid on the U.S. Treasury is from a flaw in U.S. tax law:  The U.S. is one of the few countries that taxes its businesses on their worldwide income.  EU countries do not tax  worldwide income.    Thus, by targeting American business, they know that Uncle Sam will be force to give them money.  And why not.. .it is the history old battle between the haves (USA) and the have nots (UK and EU).

(Learn how small international businesses are protecting themselves at the end of this article.)

When the UK and the EU violate the treaty and grab taxes from an American business, “foreign tax credit” law requires the US Treasury to pay the foreign income tax. 

 The U.S. Treasury needs U.S. companies to compete in the global market.  The  Federal, and state are about 43%.   While EU companies pay taxes at 25% and  foreign profits are tax free. EU firms have more money to expand into international markets and into their domestic markets.

The U.S. Treasury reimburses Americans their foreign taxes.  This is known as the “foreign tax credit” (American business pays tax at 43%  while EU firms pay tax at 20% to  25% and nothing on foreign profits).

 Congress Blasts EU for Raiding the U.S. Treasury, on this link, but does nothing. 

Starbucks is an example of the EU and UK successful raid on the U.S. Treasury.   Starbucks announced that it was moving its headquarters to Britain so that it can pay more taxes.  Yes, it is moving to increase their taxes which will be paid by us.  

By the way Starbucks and Amazon have both paid more than a $billion dollars in value added tax each year and every year to the UK and the EU.  But, these governments want more… they want all that they suck from you and me. 

 U.K. and E.U. international taxation is based on the location of the firm headquarters.  Starbucks headquarter is in Holland.  The Netherlands is one of the few European countries that provides a lower tax to  create jobs.  The Dutch tax laws are always in the news.  The U.S., U.K. and E.U. disdain Holland for its tax policy. 

Starbucks UK tax is paid by the American population.  Because the U.S. taxes everyone’s worldwide income, we all get a credit for the foreign income taxes we pay (the “foreign tax credit”). The British Government  knows  this.

Starbucks, after being bullied in the British press and threaten by the UK Government, gave up and move  its headquarters to the UK to pay more UK taxes. 

This week, the UK Government is bullying Amazon. As an American company, Amazon is protected by the US-UK Tax Treaty.  However, this protection requires the Department of the Treasury to say “no” to the UK.

Small business international tax planning

The advantage of being a small business is being small.  They do not have    1000s of employees in the UK and Europe.  So, small business with the help of a smart computer can run their operation from zero tax haven countries.

The two best are the Isle of Man (in the North Irish Sea) and the British Virgin Islands.  In third place are two U.S. tax havens – Puerto Rico (business and personal tax at 4%) and the U.S. Virgin Islands with a 90% tax abatement.
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