income taxes withholding taxes transfer pricing make sure B u s i n e s s F i n a n c e
You are working as an accountant for a U.S. company, USco, that designs and manufactures specialized equipment used in various manufacturing applications. Your company is contemplating expanding its operations overseas. The CEO has requested that you choose a country that has a tax treaty with the United States, analyze the impact of global expansion to your proposed country in several key areas, and prepare a report detailing your findings. Of particular importance to the CEO are the following areas for investigation:
What steps should the company take to expand to the proposed expansion country?
What options are available for how to structure the foreign operation and what are the tax implications of each structure (branch, subsidiary, hybrid, etc.)? Consider:
Legal and business factors
Taxation of profits
- What structure do you recommend for expansion and why?
- Based on the recommended structure, what are the tax implications for USco’s employees? Consider:
U.S. or foreign employees
- Implications of living arrangements and time spent in the foreign country
- Employment taxes, insurance, and benefits
- Options for eliminating double taxation (exclusion vs. credit)
- Based on the recommended structure, what are the tax implications for USco as a whole? Consider:
- Withholding taxes
- Transfer pricing
- Make sure to include a brief historical and economic overview of the country you chose for your analysis, details on why you feel the proposed country is a good choice for expansion, and important treaty provisions relevant to your analysis.
- You will want to use the textbook, IRS website, and other professional literature to determine relevant information that should be contained in each report. Your completed report should be well organized, well documented, and clearly focused on the relevant issues appropriate to the course project. Each report should conform to the following parameters:
- Misey, J., & Schadewald, M. S. (2018). Practical guide to U.S. taxation of international transactions (11th ed.). CCH.