The tax structure that may be most appropriate for international operations is generally very different from the structure utilized by U.S.-only companies. Our professionals are well-versed in the planning opportunities that are presented by these differences and can help align your initiatives, structure, and tax compliance with your overall business goals – whether through entity classification elections, cross-border mergers and acquisitions, or IC-DISC planning for U.S. exporters.

Maximizing available tax benefits is a critical component of any international strategy. We help both businesses and individuals identify and efficiently utilize opportunities to reduce global tax exposure while aligning with overall financial goals.

This includes optimizing the use of foreign tax credits as well as maximizing the foreign-derived deduction eligible income (FDDEI) deduction for C corporations. We also help clients take full advantage of international tax treaties, minimize withholding obligations, and evaluate strategies such as Section 962 elections for individuals with net controlled foreign corporation tested income (NCTI) or Subpart F inclusions.

Identifying and addressing potential tax risks early is essential to avoiding costly surprises and maintaining compliance across jurisdictions. We help uncover areas of exposure and provide guidance on how to address them in alignment with your broader tax strategy.

This includes identifying potential transfer pricing risks related to transactions between related entities. When needed, we coordinate with appropriate transfer pricing advisors to help ensure appropriate documentation, support, and alignment with applicable regulations.

Deemed Income Inclusions

We assist with the planning and calculations of deemed income inclusions, including NCTI, Subpart F, and passive foreign investment company (PFIC), helping you understand and manage their impact.

Earnings and Profits (E&P)

We perform E&P studies to support repatriation planning and provide insight into key tax attributes that affect global cash movement.

U.S. Tax Compliance and Remediation

One of the major obstacles companies encounter when managing their international assets and activities is tracking and completing the many required U.S. tax forms in order to avoid drastic and costly penalties caused by noncompliance. Through careful analysis and planning, KSM can help with this process, even consulting on a company’s delinquent tax filings and helping them through each step of the delicate process of identifying and implementing the most efficient way to come back into compliance. We have significant experience working through the IRS’ various disclosure programs and draw on our legal contacts as needed to make sure our clients are protected.

Foreign Withholding and Reporting

Navigating the various withholding regimes when making payments of U.S. source income can be confusing and complicated. KSM has experience with fixed, determinable, annual, and periodic (FDAP), effectively connected income (ECI), foreign investment in real property tax act (FIRPTA), and foreign account tax compliance act (FATCA) withholding and can help clients create and institute a process to ensure their continued compliance with all required withholding rules.

• FinCEN Report 114, Report of Foreign Bank and Financial Accounts
• Form 5471, Controlled Foreign Corporations
• Form 5472, Foreign Owned Corporations
• Form W-8 Series, Foreign Person Identification Document for Withholding
• Form 1116 and Form 1118, Foreign Tax Credits
• Form 8865, Controlled Foreign Partnerships
• Form 2555, Earned Income Exclusion for Individuals
• Form 8858, Foreign Disregarded Entities
• Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund
• Form 8832, Entity Classification Elections
• Form 8833, Treaty Based Return Disclosures
• Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons
• Form 8804, Withholding on Partnership Allocations to Foreign Partners
• Form 8992, U.S. Shareholder Calculation of Net Controlled Foreign Corporation Tested Income (NCTI)
• Form 8993, Section 250 Deduction for Foreign-Derived Deduction Eligible Income (FDDEI) and Net Controlled Foreign Corporation Tested Income (NCTI)
• Form 5713, International Boycott Report
• Form 8975, Country-by-Country Report
• Form 8964-TRA, Section 987 Transition Information
• Form 8964-ELE, Section 987 Elections