International Tax Reporting and Planning

PRIMARY CONTACTS: Mary D. Richter CPA

Transactional analysis and support services including due diligence. 

Base Erosion and Anti-Abuse Tax (BEAT)

BEAT is an additional tax on certain corporations that make specific types of payments to foreign related parties. The determination as to whether a corporation has made a payment that would be subject to such tax is made by looking at a company’s base erosion percentage and gross receipts. If a taxpayer falls within the requirement to pay BEAT, then a complex calculation, as indicated by the Service, is done each year with the corporation’s tax return. 

There are certain industries that might be more impacted by BEAT than others. Importers and those in the energy sector seem to be uniquely susceptible to BEAT, and should be cautious when making payments to their foreign related entities without carefully considering the tax impact. If you are concerned about BEAT and want to know how Schneider Downs can help, reach out to the Schneider Downs international tax team. These tax professionals can: 

• Aid in making the determination of whether BEAT applies to you, 
• Engage in tax planningto model the best options for your unique business need, and 
• Ensure compliance with all relevant reporting requirements as issued by the Service. 

GILTI, Subpart F, Repatriation 

Prior to the passage of the Tax Cuts and Jobs Act (TCJA) in 2017, U.S. owners of foreign businesses were able to defer U.S. taxation on certain income earned outside of the U.S. until such income is repatriated to the United States (via payment of a dividend from the foreign entity to the U.S. owner). When Congress passed the TCJA, it allowed U.S. shareholders a new benefit, but added some new burdens, all aimed to incentivize those doing business abroad to bring profits and investmentsback to the United States. 

Per the TCJA,U.S.corporate shareholders that repatriate income via dividend are now afforded a deduction in the amount of the dividend, effectively allowing U.S. shareholders to bring profits held offshore back to the United States tax-free.Additionally, taxpayers that are leaving profits abroad in their foreign companies, are now subject to stricter subpart F rules, as well as a newer tax on GILTI, or global intangible low-taxed income. The rules for calculation of subpart F income and GILTI, respectively, are both complex and time-consuming. It takes significant modeling on the planning side and detailed analysis on the compliance side to determine the best course of action for a taxpayer. Schneider Downs’ talented Global Tax team has experience in both of these areas, and is ready to help you determine your individual needs. 

About Schneider Downs Tax Advisors 

With one of the largest regional tax practices in the country, Schneider Downs Tax Advisors’ personal focus on clients and in-depth understanding of current issues ensures that clients are complying with tax filing requirements and maximizing tax benefits. Our industry knowledge and focus ensures delivery of technical tax strategies which can be implemented as practical business initiatives. Learn more at www.schneiderdowns.com/tax-services.