The Impact of International Tax Treaties When Doing Business Overseas

by | Jan 30, 2012 | PKF Texas - The Entrepreneur's Playbook®

Note: Running weekly in, PKF Texas – Entrepreneur’s Playbook® is a continuing series of tips brought to you by Greg Price. These run Sunday evenings during the BusinessMakers Radio Show on KPRC 950AM.

PKF Texas: The Entrepreneur’s Playbook® – International Taxes 2 from The Businessmakers on Vimeo.

Greg: This is PKF Texas, and another chapter of the Entrepreneur’s Playbook. I’m Greg Price, director of consulting solutions, and I’m here, again, with Rafael Carsalade, a tax director at PKF Texas that specializes in international tax matters. Rafael, welcome back to the Playbook.

Rafael: Thanks for having me, again, Greg.

Greg: So, Rafael, last week, we were talking about creating a tax presence in international countries, and we got to talking about what the options might be in dealing with that, and we almost ran outta time, so we had to cut it off right then, but you talked about options when you have treaties and don’t have treaties, so can you expand upon what the impact of that means?

Rafael: Yes. It makes a big difference. The US has a web of tax treaties. Part of those treaties talk about creating a taxable presence in the foreign country. If the US does have a treaty with the country with which you’re doing business with, the threshold for you or your company to become taxable in that state is a lot higher, so there’s a lot more room to maneuver.

If the US does not have a tax treaty with that country, then the threshold is much lower, and you become taxable in that country a lot sooner, and a lotta times, a lot sooner than what you might want or expect.

Greg: Wow. That’s a very impressive discussion, and I understand now why we have you here helping our clients that are doing business overseas. Thanks for being here.

Rafael: Thank you.

Greg: This has been a Thought Leader Production, brought to you by PKF Texas, the Entrepreneur’s Playbook. Tune in next week for another chapter. And remember if you’re doing business overseas or internationally, give PKF Texas a call.


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