Global Tax Services
We Do Business Where You Do
CO-CREATE | CO-DEVELOP | DELIVER
Co-creating the future with our clients
- International Desk
- Stages of Business
- Energy and Oilfield Services
- Health Care
- Import and Export Assistance
- International Business
- Life Sciences
- Manufacturing and Distribution
- Private Equity and Venture Capital
- Professional Services
- Real Estate
- SEC / Public Companies
- Transportation and Logistics
- Joint Venture Strategic Advisors
Companies today are doing business around the globe almost as easily as they do business around the corner. We think accounting for global businesses should be equally easy for the global entrepreneur. PKF Texas' extensive international tax offering allows us to provide a number of specialized services for these companies. Our international tax advisors are thinking about what's next for your international business.
Cross Border Financing Strategies
Businesses that access capital outside their country of operation face many complex issues. Working closely with the PKF Texas Tax Solutions Group, entrepreneurs can secure financing strategies that meet operational and financial objectives while achieving optimum tax results.
Global Tax Minimization
We work with Houston-based and international companies to integrate an overall structure that is most beneficial to your company from a worldwide tax standpoint. Entrepreneurs often neglect to consider the cost of doing business in other countries. The tax implications are grave and could result in significant incremental taxation. At PKF Texas, we strive to ensure that your business goals are aligned with effective tax minimization strategies.
Interest Charge - Domestic International Sales Corporation Incentive
The Interest Charge - Domestic International Sales Corporation (IC-DISC) remained in place after the Tax Cuts and Jobs Act of 2017 (TCJA). If you are an exporter and are not utilizing this powerful tool, then you are likely paying too much in taxes. Working with our International Tax team, you can assess your eligibility for this incentive, secure refunds from prior years, if one is in order, and ensure you obtain the maximum benefit allowable for your company's situation.
The use of an IC-DISC allows a portion of the profits from export sales (50%) that are paid as a commission to the IC-DISC to not be subject to corporate level taxation at the effective corporate tax rate (maximum 21%) and in effect allows a US C-Corporation (“USC”) to pay tax deductible dividends. Individual shareholder reports dividend at favorable 13% tax rate as qualified dividend.
- The shareholders of USC form and become shareholders of an IC-DISC. To avoid gift tax complications the percentage of ownership of the shareholders in each corporation should originally be and remain identical. If desired, use of a limited liability company ("LLC") holding company structure may provide flexibility with respect to planning around this shareholder level risk.
- USC pays a commission to the IC-DISC on the sale of export property, which is included in the income of the IC-DISC.
- USC deducts the commission, reducing its taxable income.
- At least annually, the IC-DISC distributes its income to the LLC holding company or its shareholders as a dividend.
- There is no Federal income tax at the IC-DISC level. Instead, the shareholders are taxed on the IC-DISC profits at the time the IC-DISC makes distributions.
- No interest charge is generated to the shareholders because the distribution results in no accumulated IC-DISC income and no deferred tax liability.
- Avoid double taxation (at corporate and at shareholder level) on a portion of income from export sales with a deductible commission at corporate effective rate and taxable to shareholder at favorable 15% tax rate.
- Can provide additional cash to fund dividends and/or ongoing operations
- Use of an LLC holding company
- Can provide cash management flexibility
- Can provide control over the actual annual outflow of cash from USC to the shareholders
- Allows a variety of ownership alternatives - e.g., trusts may be shareholders
- Allows shareholders to tax efficiently liquidate some of the value of their USC stock interests
- Converts some of shareholders' wealth from value in the USC stock to cash
- Can provide estate planning flexibility by increasing shareholders' overall liquidity
Transfer pricing allows companies to generate pricing for goods, services, royalties and loans between companies in a cross-border context. In order to minimize exposure to penalties; however, you must maintain certain compliance levels. We work with owners and managers to ensure compliance while meeting IRS requirements and integrating business operations.
International Tax Videos
Three Structuring Options for International Business
Restructuring Strategies for Small- to Medium-Sized Businesses
Debt Financing - What You Need to Know
Tax Planning for Foreign Inbound Investment
How to Maximize Opportunity with FDII
Following Up on FDII Changes from March 2019
Opportunities and Traps in the International Business Space
Foreign Tax Baskets – What to Know
Your IC-DISC Strategy: Does it Need to Change?
How Your Business Can Benefit from IC-DISC
A Closer Look at Transfer Pricing and the International Space
Here’s the Latest on Transfer Pricing
What Tax Payers Need to Know About International Tax Reform
What Entrepreneurs Need to Know About Toll Tax
How Tax Reform Affects Pass-Through Entities
Foreign Income Impact on State Income Tax, Flow-Through Entities and Small Businesses
A Closer Look at IC-DISC and Tax Reform
A Closer Look at FDII - Application and Calculation
IRS Focus on Transfer Pricing - Will it Impact Your Business?
What is Foreign Derived Intangible Income?
GILTI Tax - Who it Impacts and Restructure Planning
How the GILTI Tax Impacts Your Business
International Middle Market and Foreign (Repatriated) Funds
Reconsidering Tax Planning Strategies for International Middle Market
How the TCJA Affects International Middle Market Companies
IC-DISC: Setting It Up for Your Business
IC-DISC: Who Qualifies?
Exporters and Manufacturers Can Benefit from an IC-DISC