Are you searching for an integrated provider of legal and tax services for U.S. owners of offshore companies and corporate interests and investments? The ownership of an offshore company has become much more complex over the past several months. While international holdings open the door to global markets, tax benefits, and investment opportunities, they also expose their owners to complex, integrated legal, tax, and accounting issues.
3 Primary Concerns Regarding Legal and Tax Services for U.S. Owners of Offshore Companies
- One cannot overstate the complex inter-relationship of legal, tax, and accounting issues for those who hold offshore corporate interests and investments.
- Legal and tax planning, reporting, and compliance is the cornerstone of any global business or investment strategy for a U.S. taxpayer.
- Profit and Risk are always intertwined. The financial and legal risks associated with offshore investment require extensive planning and constant vigilance.
Without the right advice and service support, even experienced, sophisticated business owners and investors face serious risks and challenges, as well as a complex spread of legal and tax obligations. Is it possible in the present political and business climate to minimize risks and fulfill reporting and compliance obligations, while reducing tax exposures and planning for continued growth?
Legal and Tax Compliance Provides Important Protections for U.S Taxpayers with Offshore Corporate Ownership and Investment
Legal and tax compliance is the most important cornerstone in any offshore business or investment strategy. Legal and tax compliance provides important protections for U.S. taxpayers with offshore corporate ownership and investment. The proper integration of entities, accounting, contracts, transfer pricing, treaty protections, estate planning, and tax planning provides essential (one might suggest “crucial”) protections from genuinely substantial legal and financial exposures and consequences.
The IRS and state tax agencies such as California’s FTB place U.S. taxpayers with offshore corporate interests and investments under extensive reporting requirements and scrutiny. Detailed disclosures involving FATCA filings, FBAR reporting, IRS Forms 5471, 8938, and 8621, Controlled Foreign Corporation (CFC) rules, Global Intangible Low-Taxed Income or GILTI, Passive Foreign Investment Company or PFIC rules, as well as state requirements regarding worldwide income require an integrated legal, tax, and accounting strategy.
U.S. GAAP Accounting is Quite Different From International IFRS Principles
How does accounting come into play in this equation? Legal and tax services for U.S. owners of offshore companies must include integrated accounting strategies. One of the most complicated challenges U.S. taxpayers face with foreign corporate ownership and investment lies in the stark contrast and complete disconnect of accounting when moving from International Financial Reporting Standards (IFRS) and the Generally Accepted Accounting Principles (GAAP) here in the United States.
Most foreign businesses manage their books under IFRS. The IRS requires U.S. taxpayers to convert that information into the GAAP concepts in order to properly calculate
While both systems now follow a five-step model for revenue recognition, GAAP follows specific industry-based guidance, while IFRS applies a different, more generalized principle in this arena. Most foreign businesses manage their books under IFRS. The IRS requires U.S. taxpayers to convert that information based upon GAAP concepts in order to properly calculate taxable gains and relevant losses to meet extensive IRS and state tax reporting and compliance requirements.
Inconsistencies between IFRS and GAAP accounting standards often require extensive reconciliations, if not a separate set of books (dual accounting records) for each accounting standard and associated tax requirements. Misreporting foreign or offshore income, overstatement or understatement of gains (income) or losses, exposes the U.S. taxpayer to draconian fines, penalties, interest, investigation, audit, and even potential criminal exposure for tax evasion. Profit and risk are always intertwined. This is the genuine reason for integrated accounting, legal and tax services for U.S. owners of offshore companies, and those with international investments.
The Need for Integrated Accounting, Legal and Tax Services for U.S. Owners of Offshore Companies
Offshore businesses generate compliance issues. The Foreign Account and Tax Compliance Act or FATCA has revolutionized the transparent exchange of information between foreign sovereign tax authorities, as well as foreign banks and financial institutions and the IRS and U.S. state tax agencies. AI applications and advanced data processing systems make it easy for the IRS and state tax authorities to connect up the dots and compare real world accounts, assets, and transactions with the tax reporting compliance of U.S. taxpayers.
The need for integrated accounting, legal and tax services for U.S. owners of offshore companies and those with foreign investments is inescapable. The risks and costs of non-compliance or tax reporting mistakes are just too high.
Allen Barron is uniquely structured to provide business advisory, legal, accounting and tax services for foreign corporate owners and those with offshore investments and interests. We can help you to establish a foreign entity, or evaluate the benefits of a joint venture or the licensing of intellectual property to establish your goals for expanding your business presence and profitability in offshore markets. Global business and investment is more challenging than ever. Allen Barron, Inc. and Janathan L. Allen, APC provide deep expertise and integrated services for those working to comply with international business and tax matters. We will help you to structure your entity or constellation of entities, and set up the internal accounting and reporting systems that will inform your decisions and maximize your return on investment. We can help you to structure your transactional planning, estate planning, accounting and tax systems and strategies, to ensure reporting and compliance obligations are met.
The global economy provides significant business opportunity for the right types of business owners and investors. We provide the integrated legal, tax, and accounting services for foreign corporate owners to ensure compliance with international and local laws and regulations, while balancing IRS and state business and personal taxation requirements.
Are you searching for an integrated provider of accounting, legal and tax services for U.S. owners of offshore companies and corporate interests and investments? Allen Barron is a single-source integrated vendor who is a valued counselor at every stage of foreign business ownership, from business formation through investment and acquisition, to operations, taxation and ultimately sale or disposition of a foreign investment or corporate interest.
We invite you to learn more about the integrated tax, legal, accounting and business consulting services of Allen Barron and contact us or call today to schedule a free consultation at 866-631-3470.
