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Other Taxation Services

Controlled foreign company (CFC)

A Controlled Foreign Company (CFC) refers to a legal entity incorporated in a foreign country, the majority of whose shares are owned or controlled by residents of a different jurisdiction. The concept of a CFC is primarily employed in international tax law to prevent tax evasion by individuals or corporations attempting to shift profits to low-tax jurisdictions. Tax authorities in the home country of the controlling entity have the right to tax the income generated by the CFC, even if that income is not repatriated. The objective is to discourage taxpayers from utilizing offshore entities to artificially lower their tax liabilities and ensure that they pay taxes on foreign income that is under their control. CFC rules vary by jurisdiction, and compliance often involves complex considerations related to ownership structures, income attribution, and anti-avoidance measures.

Passive Foreign Investment Company (PFIC) reporting assistance

A Passive Foreign Investment Company (PFIC) is a classification used by the United States Internal Revenue Service (IRS) to identify foreign-based investment entities characterized by passive income and assets. PFIC reporting is required for U.S. taxpayers who hold shares in such entities, and failure to comply can result in significant tax consequences. Reporting obligations include filing IRS Form 8621, which details the taxpayer’s ownership, income, and distributions from the PFIC. Additionally, there are complex tax calculations associated with PFICs, such as the excess distribution regime and the mark-to-market election, that taxpayers must navigate. Seeking professional tax advice is crucial for individuals dealing with PFIC reporting to ensure compliance and minimize tax liabilities.

Assistance with Foreign Account Tax Compliance Act

The Foreign Account Tax Compliance Act (FATCA) is a United States federal law enacted in 2010 to combat tax evasion by U.S. taxpayers holding financial assets abroad. FATCA requires foreign financial institutions, such as banks and investment entities, to report information about financial accounts held by U.S. persons to the Internal Revenue Service (IRS). Additionally, U.S. taxpayers are obligated to report certain foreign financial assets and accounts on their annual tax returns. FATCA aims to enhance transparency and information exchange between countries to ensure that U.S. taxpayers accurately report their global income and assets. Non-compliance with FATCA can result in financial penalties for both individuals and foreign financial institutions. The law has had a significant impact on global financial institutions and has spurred international efforts to improve tax compliance and information sharing.

FBAR filing assistance

FBAR, or Foreign Bank Account Report, filing assistance involves aiding individuals in fulfilling their legal obligation to report foreign financial accounts to the U.S. Department of the Treasury. This filing requirement is crucial for U.S. taxpayers who hold financial assets abroad, ensuring compliance with anti-money laundering regulations and combating tax evasion. Professionals offering FBAR filing assistance guide individuals through the complex process of accurately reporting their foreign accounts, helping them navigate the intricacies of the FinCEN Form 114 submission. This assistance often includes understanding reporting thresholds, identifying reportable accounts, and ensuring timely and accurate submission to avoid potential penalties.