3rd Annual International Tax & Wealth Planning Conference

Bilzin Sumberg’s International Tax Practice is hosting its 3rd Annual International Tax & Wealth Planning Conference November 7, 2019 in Miami, Florida.

This invite-only conference will highlight the latest developments in the ever changing international tax and wealth planning environment, including inbound financing structures with a focus on recent regulatory guidance and planning, U.S. federal tax and succession planning for non-U.S. persons investing in U.S. private equity investments, and estate planning consideration post-immigration


Thursday, November 7, 2019

2:00 PM – 2:30 PM
Registration and Networking

2:30 PM – 2:35 PM
Opening Remarks by Jeffrey L. Rubinger, Partner and Practice Group Leader in Bilzin Sumberg’s Tax Practice

2:35 PM – 3:30 PM
Session #1: Structuring Inbound and Financing for Funds and Businesses

Summary: Panelists will highlight the current state of inbound financing structures, focusing on the impact of recent guidance under Sections 163(j) and 267A, as well as creative financing techniques utilizing, for example, Irish “Section 110 companies”, low-tax Hungarian companies, and other structures for minimizing US income and withholding taxes on such investments.

Panelists: Ted Brooks, Managing Shareholder of Kawa Capital Management, Inc.; Summer Ayers LePree, Partner in Bilzin Sumberg’s Tax Practice; Jeffrey L. Rubinger, Partner and Practice Group Leader in Bilzin Sumberg’s Tax Practice.

3:45 PM – 4:45 PM
Session #2: US Federal Tax and Succession Planning for Non-US Persons Investing in US Private Equity Investments

Summary: This panel will discuss tax and practical planning considerations related to foreign investment in U.S. private equity. Topics covered will include choice of investment vehicle; U.S. federal income tax concerns during the lifetime of the foreign investor; and planning considerations for U.S. beneficiaries.

Panelists: Hal J. Webb, Head of Bilzin Sumberg’s International Private Client Services and Partner in the Firm’s Tax & Estate Planning Group; Jennifer Wioncek, Partner in Bilzin Sumberg’s Tax and Estate Planning Group; Paul J. D’Alessandro, Jr., Attorney in Bilzin Sumberg’s Tax and Estate Planning Group.

5:00 PM – 6:00 PM
Session #3: Estate Planning Considerations Post-Immigration

Summary: This panel will discuss estate planning considerations related to immigration, including: (1) immigrating to the U.S. with an optimal tax and wealth transfer structure; (2) domestic tax and estate planning considerations once a person becomes a U.S. resident; and (3) how to maintain an offshore structure while incorporating domestic issues.

Panelist: Stephanie A. Diaz, Attorney in Bilzin Sumberg’s Tax and Estate Planning Group.

6:30 PM – 8:30 PM
Networking Reception


This event is by invite only. If you are interested in attending, please email events@bilzin.com.



Looking for a GILT(I)-Free Structure? Try Estonia

Estonia, the small Baltic country of just 1.3 million people situated halfway between Sweden and Russia, was named “the most advanced digital society in the world” by Wired magazine. According to recent figures, Estonian residents complete their taxes online in under five minutes, 99 percent of Estonia’s public services are available on the internet 24 hours a day, and nearly one-third of its citizens vote via the internet. With these advanced technological features, it is not surprising that its government boasts that Estonia is home to more tech unicorns (i.e., private companies valued at more than $1 billion) per capita than any other small country in the world.

As a result of the high number of technology companies that call Estonia home, one might think that the U.S.’s new global intangible low taxed income (or GILTI) tax was enacted specifically to go after U.S. taxpayers doing business in countries such as Estonia, where intangible assets presumably make up a significant portion of the value of these tech companies.  The new GILTI regime, enacted as part of 2017 tax reform, generally triggers immediate U.S. tax on active income earned by a Controlled Foreign Corporation (CFC), other than an annual carve-out for 10 percent of the CFC’s adjusted basis in its tangible depreciable assets used in its trade or business.  In essence, all active income above this assumed return is deemed to be from intangibles (regardless of any actual relationship to intangible assets), and is thus subject to the GILTI provisions, which now reach most offshore income that was previously possible to defer from U.S. taxation. There is no high-tax exception to GILTI, although income that would otherwise be Subpart F income but for the Section 954(b)(4) high-tax exception is excluded from GILTI. Continue Reading

Feeling GILTI Enough to Make a Section 962 Election?

choiceAfter the passage of Public Law No. 115-97, formerly known as the Tax Cuts and Jobs Act (the “Tax Reform Act”),[1] U.S. individual shareholders of controlled foreign corporations (“CFCs”) were faced with a difficult decision. As a general rule, when it comes to CFCs, the Tax Reform Act treats U.S. corporate taxpayers more favorably than U.S. individual shareholders, sometimes drastically so.  Individual U.S. shareholders thus had to consider, beginning in tax year 2018, whether to contribute their CFC interests to a U.S. C corporation (or a U.S. LLC that is treated as a corporation for U.S. federal income tax purposes), or instead to continue to hold their CFC interests directly. In the case of continuing direct ownership of CFC shares, many U.S. individual shareholders planned to utilize elections under Section 962, which cause such individual shareholders to be taxed like corporations for certain limited purposes of U.S. outbound taxation. Continue Reading

The Ins & Outs of Domestication of Foreign Trusts

StrategyTrusts are a classic planning tool for the transfer of a family’s wealth down to future generations. Cross-border families will often consider establishing a trust governed by local law or outside of the United States if the matriarch or patriarch is not a U.S. resident (i.e., is not a U.S. taxpayer). However, if any of the current or future beneficiaries are, or will become, a U.S. taxpayer (“U.S. beneficiary”), a foreign trust will create additional tax complexity for such beneficiary at some point. In the past few years, there also has been a push to consider the United States as a place to govern trusts where no beneficiary is expected to be a U.S. beneficiary. This is largely driven by the OECD’s implementation of the Common Reporting Standard (“CRS”), under which jurisdictions agree to exchange financial account information with each other in an effort to combat offshore tax evasion. Almost 100 jurisdictions have agreed to participate in CRS but, as of the date of this article, the United States continues to be a non-participating jurisdiction, resulting in a number of trusts either being established in or transitioned to the United States. In this article, I will discuss some of the tax, planning, and practical issues involved in considering the domestication of foreign trust structures.

Please click here to read the full article on Bloomberg Law‘s website.

International Tax Breakfast Series: The Impact of U.S. Tax Reform on Inbound and Outbound Planning

Join us April 26th for the next edition of Bilzin Sumberg’s International Tax Breakfast Series. Tax and Private Wealth Services attorneys Hal J. Webb and Jennifer J. Wioncek will explore the Tax Cuts and Jobs Act legislation and its impact on inbound and outbound U.S. income tax planning for international private clients.

Topics of discussion include:

  • Changes impacting individual and family planning matters
  • Planning for basic foreign “blocker” structures
  • Misconceptions and traps to the change of attribution rules
  • Planning possibilities for S corporations with non-U.S. clients

Attendees include financial advisors, accountants, family offices, foreign attorneys, tax directors and trust advisors who are working with multinational companies, closely-held businesses, and high net worth individuals engaged in cross-border business or investments. Continue Reading

How Will TCJA Affect Individuals Electing Corporate Taxation?

by Andrew Velarde, Tax Notes International Magazine

The Tax Cuts and Jobs Act (P.L. 115-97) has brought newfound attention to an election by individuals to treat themselves as corporations, as well as important questions about uncertainties surrounding its interplay with newly enacted international provisions.

Section 962 was drafted in 1962 and until recently was largely unknown to many practitioners (2018 TNI 8-46). Under that section, U.S. individual shareholders may annually elect to be taxed at the corporate tax rate for their section 951(a) subpart F inclusions. The taxpayer may also claim the deemed-paid foreign tax credit under section 960. The election has its limits,

however, as under section 962(d), when an actual distribution is made, the earnings and profits from a controlled foreign corporation that exceed the tax applicable under the section 962 election are also treated as income.

The TCJA committee report, in a terse footnote about section 965, cites to the section 962 election as a way for individuals and investors in U.S. passthrough entities to receive corporate rates for the transition tax inclusion, without further explanation. Guidance from the IRS and Treasury may be needed to clarify its operation in conjunction with section 965 or the tax on global intangible low-taxed income (GILTI). Continue Reading

The (Unintended?) Consequences of Tax Reform on Inbound Financing Structures

Most of the attention surrounding the international aspects of Public Law No. 115-97, formerly known as the Tax Cuts and Jobs Act (the “Tax Reform Act”), has understandably focused on outbound provisions, including Section 951A (GILTI), Section 250 (FDII), Section 965 (deemed repatriation tax), and Section 245A (dividends received deduction).[1]  The scope of the implications of inbound changes under the Tax Reform Act, however, particularly in the context of inbound financing structures, will catch many international practitioners by surprise.

The repeal of Section 958(b)(4), which contained a limitation on the inbound attribution of stock in the context of determining whether a foreign corporation is a controlled foreign corporation (CFC) for U.S. federal income tax purposes, may cause many innocuous inbound financing structures to fail to qualify for the portfolio interest exemption.  The introduction of new Section 267A and modifications to Section 163(j) create further complexity and ambiguity, and will prevent deductions of U.S.-source interest payments in some situations where there does not appear to be any abuse.  The new “base erosion and anti-abuse tax” (BEAT) tax under Section 59A may have further implications, although for purposes of this blog, we will assume the relevant taxpayers realize gross receipts below the $500 million threshold such that the BEAT provisions should not be applicable. Continue Reading

Reduction in U.S. Corporate Tax Rates Will Significantly Impact Outbound Tax Planning by U.S. Individuals

The Tax Cuts and Jobs Act (“TCJA”) represents the most significant tax reform package enacted since 1986. Included in this reform are a number of crucial changes to existing international tax provisions.  While many of these international changes relate directly to U.S. corporations doing business outside the United States, they nevertheless will have a substantial impact on U.S. individuals with the same overseas activities or assets.

One notable change under the new law was the reduction of the maximum U.S. corporate income tax rate from 35% to 21%. Not surprisingly, this change will have a corresponding impact on the ability of U.S. shareholders (both corporations and individuals) of controlled foreign corporations (“CFCs”) to qualify for the Section 954(b)(4) “high-tax exception” from Subpart F income.  This is because the effective foreign tax rate imposed on a CFC that is needed to qualify for this purpose must be greater than 90% of the U.S. corporate tax rate.  Therefore, this exception now will be available when the effective rate of foreign tax is greater than 18.9% (as opposed to 31.5% under prior law). Continue Reading

International Tax & Wealth Planning Conference

Bilzin Sumberg’s International Tax Practice is hosting its Annual International Tax & Wealth Planning Conference November 2nd – 3rd in Miami, Florida.

This conference will highlight the latest developments in the ever changing international tax and wealth planning environment and will cover current topics such as the impact of the new multilateral tax treaty, the use of private trust companies in the U.S. and abroad, and pre-immigration planning from EB-5 investor visas and beyond.

Continue Reading

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 foreign corporation (CFC) rules typically achieves the first goal of deferral, and utilizing holding companies resident in treaty jurisdictions generally accomplishes the second goal of minimizing U.S. federal income tax on the eventual repatriation of profits (for U.S. corporate taxpayers, the use of foreign tax credits may be used to achieve this latter goal).

In a purely domestic setting, limited opportunities exist to defer paying U.S. federal income tax on income or gain realized through any type of entity, and fewer opportunities, if any, exist for the beneficial owners of such entities to receive tax-free distributions of the accumulated profits earned by these entities. A Roth IRA may be the best vehicle available to achieve these goals. Continue Reading


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