Amy's International tax

 For the distribution, then we have the intercompany agreement for the sale of the products less a discount.  For those, we need to take a look at the returns (like Australia) and adjust the intercompany price if the results aren't within an arms-length range. Royalty exp. <=> Royalty income (under the License agreement)  Commission income & expense for others without the agreement IP, residual royalty, know-how (intangible)- Does treaty protect no matter what? 

What is a Service Permanent Establishment (PE)? A Permanent Establishment (PE) is a concept in international tax law that determines whether a foreign company has a sufficient business presence in another country to be subject to that country's corporate income tax. A Service PE is a specific type of PE that is created not by having a fixed office, but by the physical presence of employees or personnel of a foreign company furnishing services within another country. How is a Service PE Triggered in India? Most of India's Double Taxation Avoidance Agreements (DTAAs), including those with the USA and Singapore, contain a Service PE clause. This clause is typically triggered if a company's employees or personnel provide services within India for a period exceeding a certain threshold (e.g., more than 90 or 183 days) within any 12-month period.   Example 1. Who: Employees of your company 2. What: They provided services in India 3. Where: They were physically present in India t...

Firstly, transitioning a portion of the business to a C corporation means that the income will be subject to corporate income tax rates, which are generally higher than individual rates applied to S corporation income .  C corporations face double taxation, where income is taxed at the corporate level and again at the shareholder level when dividends are distributed   . The remaining S corporation portion will continue to pass income directly to shareholders, who will report it on their personal tax returns, potentially benefiting from lower individual tax rates   . Additionally, the change in structure may affect the business's eligibility for certain tax credits and deductions, as C corporations and S corporations have different rules regarding these benefits . The business must also c onsider state-level tax implications , as states may have different rules for C corporations and S corporations, affecting state income tax liabilities . Furthermore, the transi...

1. General Principles of Pass-Through Taxation Pass-through entities (PTEs) include partnerships, S corporations, LLCs taxed as partnerships or S corporations, and certain trusts. These entities generally do not pay income tax at the entity level. Instead, their income, deductions, credits, and other tax items "pass through" to the owners, who report and pay tax on their share of the entity’s income on their own tax returns . States vary widely in their treatment of PTEs. Some conform closely to federal flow-through principles, while others impose entity-level taxes or have unique rules for allocation, apportionment, and compliance . 2. State-Level Pass-Through Entity Taxes (PTETs) In response to the federal limitation on the state and local tax (SALT) deduction under  IRC § 164(b)(6) , many states have enacted elective entity-level income taxes on PTEs. These allow the entity to pay state income tax at the entity level, which is deductible for federal tax purposes, there...

  Mergers and acquisitions (M&A) transactions present a wide array of tax issues that must be carefully analyzed at both the federal and state/local levels, as well as in international contexts. The key tax issues related to M&A transactions include: 1. Federal Income Tax Treatment of the Transaction Structure The form of the transaction (asset purchase, stock purchase, merger, or divisive reorganization) determines the federal income tax consequences for both buyers and sellers. For example, certain corporate separations and reorganizations may qualify for nonrecognition of gain or loss under subchapter C of the Internal Revenue Code, provided specific requirements are met (e.g., sections 355, 361, 368). The IRS has proposed enhanced multi-year reporting requirements for corporate separations and related transactions to ensure compliance with nonrecognition provisions, requiring annual filings and record retention for up to five years after the transaction. 2. State and Lo...

  There would be appetite for dividends from a US standpoint. We typically don't like to issue dividends under $5m, especially in jurisdictions with a WHT, so I'm wondering whether that may have been the issue in the past.   The US E&P balance was INR xxx (approx. $xxx) as of 12/31/2024, which aligns closely with the free reserves amount highlighted below (INR xxxm). So that is a substantive enough balance that I think it makes sense to proceed with a dividend, assuming that is recommended by the local team / advisor. Unless there is a need to distribute the cash for a strategic reason (e.g., something like a net wealth tax), my recommendation would be to defer and have this picked up in our 2026 dividend process. We could put a plan in place for next year for there to be a subsequent distribution as well from ABC to XYZ such that this cash is includible in our total Swiss/Lux repat distribution to the US.   While I'm sure Treasury wouldn't mind having this at Sw...