To effectively navigate the complex international tax laws, Frost Law offers clients a broad range of international tax services. We help our clients understand the laws and regulations and meet their compliance and reporting obligations. More importantly, we help them identify and reduce their tax risks and implement sound, practical and efficient tax strategies that will address their needs today and into the future.
Our approach combines a strong understanding of our client’s business, the economic environment, and technical tax knowledge in different jurisdictions. We assist multi-national organizations and high-net-worth individuals engage in tax planning to minimize the overall tax burden.
We assist our clients with both in-bound and out-bound international tax planning issues such as choice of entity and corporate structuring, anti-deferral (i.e., subpart and GILTI) income analysis, effective tax rate minimization, foreign tax credit utilization, repatriation planning, transfer pricing planning and documentation, information reporting and withholding, tax treaty interpretation and other international tax issues.
We provide services in the following areas:
Structuring, Anti-Deferral Strategies, and Foreign Tax Credit (FTC) Utilization
The U.S. has complicated anti-deferral rules that apply to U.S. owners of controlled foreign corporations (CFCs), passive foreign investment companies (PFICs), and other types of entities that require U.S. owners to include certain types of income (e.g., Subpart F and GILTI income) of foreign companies in their U.S. taxable income. Frost Law can assist with identifying risks associated with these anti-deferral rules and structuring foreign operations to avoid or minimize current income inclusions. Frost Law can also assist in structuring cross-border transactions and operations and optimize the use of foreign taxes for effective tax rate planning.
Tax Treaty Planning
Our team can assist companies with structuring and planning transactions and operations to maximize benefits under applicable U.S. treaties in order to minimize overall combined U.S. and foreign taxes.
International M&A and Group Reorganization
A successful mergers or acquisitions strategy follows a structured and disciplined approach, with clear strategic objectives, detailed implementation plans, and a focus on creating and capturing value. Frost Law can assist companies with the following services: target screening, due diligence, tax structuring, merger integration, and post-transaction implementation.
Transfer pricing rules and regulations are growing and becoming more complex and burdensome. Examinations are expensive, contentious, disruptive, and clearly on the rise in many jurisdictions. We analyze inter-company transactions and provide guidance on TP documentation including competent authority relief assistance.
VAT Advisory & Compliance
Global corporations most likely have exposure to value-added tax (VAT) in many areas of their business, since VAT is the predominant indirect tax outside the U.S. With rates ranging up to 25 percent in various jurisdictions, VAT exposure can grow quickly in the absence of a comprehensive VAT strategy and a firm understanding of each jurisdiction’s specific VAT requirements. We provide advisory, refund, controversy, and compliance assistance.
FATCA is the Foreign Account Tax Compliance Act which was enacted to minimize offshore tax evasion by U.S. persons. There are many complexities associated with FATCA. It affects both the withholding agents and payment recipients. We assist U.S. and non-U.S. entities impacted by these reporting requirements and make sure compliance requirements are met.
Persons with either a financial interest or signature authority over a foreign bank, brokerage, or other financial accounts during a calendar year must report it to FinCEN (not the Internal Revenue Service) electronically using the BSA E-Filing System on FinCEN Form 114 (which has superseded the prior Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts). We assist U.S. persons to navigate the filing intricacies of FBAR and provide remediation assistance to those who are delinquent in their filing obligation.
Taxation of Digital Assets
Digital currency is increasingly becoming more prevalent in the marketplace and the proliferation of digital assets and its iterations makes this new trend even more intriguing. As people navigate the fast-evolving complexities of the digital currency community, the question is open to whether businesses and governments are ready for its effects. Ultimately, the question is how will the virtual currency be taxed? Whether you are buying, selling, exchanging, or accepting digital assets (i.e., cryptocurrencies), you may want to know how these transactions are treated for tax purposes.
Doing Business in the U.S.
With corporate income tax rate now one of the lowest in the world, many foreign-based companies are looking into doing business in the U.S. and avail of the 21% income tax rate, its stable economy, and predictable business and monetary policies. We advise foreign-based companies on appropriate U.S. entity structure coupled and use tax treaty benefits to minimize overall tax exposure.
U.S Real Property Transaction
Foreign Investment in Real Property Tax Act ("FIRPTA) imposes a tax on the gains of non-US person from the sale of U.S. real property. The gain or loss of non-US persons from the disposition of a US real property interest is treated as if the taxpayer were engaged in a trade or business within the US and as if such gain or loss were effectively connected with such trade or business. Investment in US real property interest has many traps for the unwary.
Withholding Tax Due Diligence
Our team can perform due diligence services to U.S. corporations and other entities who are withholding agents of U.S.-source income and determine withholding and information reporting requirements for U.S. federal income tax purposes. We will review current accounts payable and other accounting systems and procedures to determine payments requiring withholding under the rules and recommend controls and processes to comply with the Internal Revenue Code.
Frost Law can provide US international tax information return assistance to companies with operations outside the U.S. In particular, we can assist in reviewing forms 5471, 5472, 8858, 8865, and 1118, among others.
We also provide assistance with regard to the review of U.S. reporting of inbound transactions, such as: (i) form 5472 – for foreign-owned U.S. corporations, (ii) form 1120F – for U.S. federal income tax liability of foreign entities, and (iii) FIRPTA filings for foreign persons owning U.S. real property interest. Do you need help with foreign compliance? Learn about our international tax compliance services to get help with your complex foreign matters.