Tag Archives: Treaties

The Malta Pension Plan – A Supercharged, Cross-Border Roth IRA

Relevant US Tax Principles In the cross border setting, two of the principal goals in international tax planning are (i) deferral of income earned offshore and (ii) the tax efficient repatriation of foreign profits at low or zero tax rates in the United States. For U.S. taxpayers investing through foreign corporations, planning around the controlled … Continue Reading

Recent Chilean Tax Reform Reinforces Need for U.S. Tax Treaty

Chile is the fifth largest economy in South America and increasingly one of the most significant U.S. trading partners in the region. U.S. foreign direct investment into Chile was $39.9 billion for 2012 (the latest year for which official figures are available). And in 2013, the U.S. exported $17.6 billion of goods and services to … Continue Reading

Death of the “Double Irish Dutch Sandwich”? Not so Fast.

On October 14, 2014, the Irish Minister for Finance released proposals as part of the 2015 Irish Budget that would cause Irish incorporated non-resident (“INR”) companies to be treated as tax resident in Ireland beginning January 1, 2015. The goal is to shut down the use of so-called “Double Irish” and “Double Irish Dutch Sandwich” … Continue Reading

The Real Tax Benefits of Inverting to Canada

On August 26, Burger King announced that it entered into an agreement to acquire Tim Hortons, Inc., the Canadian coffee-and-doughnut chain, in a transaction that will be structured as an “inversion” (i.e., Burger King will become a subsidiary of a Canadian parent corporation).  The deal is expected to close in 2014 or 2015. The agreement values … Continue Reading

Local Law Shopping Through “Derivative Benefits”

Unlike U.S. persons who are subject to U.S. federal income tax on their worldwide income, foreign persons generally are subject to U.S. taxation on two categories of income: (i) certain types of passive U.S.-source income (e.g., interest, dividends, royalties and other types of “fixed or determinable annual or periodical income,” collectively known as FDAP), which … Continue Reading

Determining Foreigners Insolvency Exception

Can a foreign person exclude foreign-situs assets in determining insolvency exception to cancellation of indebtedness income? With the worldwide global default rate on corporate debt continuing to rise, a taxpayer’s ability to exclude cancellation of indebtedness income from gross income has become increasingly relevant.  This remains true for foreign persons who are also subject to … Continue Reading

Foreign Investment in the U.S. Through Romania Just Became More Interesting

All “modern” income tax treaties concluded by the United States contain a “Limitation on Benefits” (LOB) provision.  The purpose of such a provision is to prevent “treaty shopping.” Romania is one of the few remaining countries that have comprehensive income tax treaties with the United States that do not contain LOB provisions. Romania recently enacted … Continue Reading
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