2017 is dawning on a new world of financial transparency and international tax cooperation between global sovereign tax authorities and the world’s banks and investment houses. What does this mean for international investors, US taxpayers with offshore accounts and assets and international business? In short – a reckoning.
The primary fact one needs to clearly understand is the amount of information about each financial account and the specific individual(s) with beneficial ownership interest that is being shared directly with the IRS.
FATCA has wrought significant changes to the global financial marketplace. International banks are requiring extensive personal information from account holders that will be provided back to their home nation’s tax authorities. In many cases, a 30% tax is being withheld on financial transactions. In response to FATCA and the information required by the United States, many countries through the Organization for Economic Co-operation and Development (OECD) have developed a global version of FATCA called the Common Reporting System or CRS. CRS is more widely known as “GATCA” a bit of a sarcastic twist on Global FATCA. CRS collects information regarding bank and investment accounts, the taxpayer associated with the account and transactional details and transmits it to the account holder’s home nation of residence.
What does this mean for individuals with offshore accounts, assets and income, as well as international business owners and investors? A new playing field. A changed reality that requires new decisions making paradigms. Global financial transparency and international tax cooperation are the new norm. Have you adjusted your strategy accordingly?
This is much more than IRS FBAR compliance or participation in the OVDP or streamlined domestic offshore procedures. This is about PFIC calculation and the amount of tax you actually face versus the cost of attempting to creatively avoid it. The new reality may require a restructuring of your business entities and transfer of intellectual property or other assets and operations. Integrated financial and operational systems must collect raw data at every point of your company’s operations and feed this information to decision makers in a way that facilitates sound business strategy.
Allen Barron is uniquely positioned to support our international clients to help them thrive in the new reality of financial transparency and international tax disclosures. The strong protections of the attorney-client privilege are backed by extensive accounting and tax preparation teams. This “single source” relationship allows Allen Barron to provide deeper insight from a broader perspective, while reducing the separate costs you presently pay for a business attorney, tax attorneys, tax preparation, accounting, CPAs and even estate planning.
It’s a new world. You need a new partner who increases your competitive edge while reducing operational cost and taxation. We invite you to contact us for a free consultation at 866-631-3470.
Are you ready for 2017?