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Navigating Unknown 
Territory: Top 10 
Considerations
Carrie Koshkin, JD
Jennifer Mailhes, CPA
Shareholders at Doeren Mayh...
Tax Considerations
•
•
•
•
•

Export Incentives: IC‐DISC
Taxable Presence
Entity Classification Considerations
Foreign Tax...
Consideration 1: Export Incentives
• IC‐DISC: Export incentive
– IC‐DISC is paid a commission by the related party
– The r...
Consideration 2: Taxable Presence
• Statutory: U.S. trade or business 
• Income tax treaties: Permanent establishment 

Co...
Consideration 3: Business Form
• Entity classification election
• Deferral v. flow‐through structures

Copyright © 2014. 
Consideration 4: Foreign Tax Credits
• U.S. provides a credit for foreign taxes
– Limited to U.S. tax on foreign sourced i...
Consideration 5: U.S. Tax Filings
• U.S. companies must file U.S. informational 
returns for the foreign entities they con...
Consideration 6: Leveraging Skill Sets
General Manager Skill Set
• All the skills of a CEO and more
• Typically a GM is hi...
Consideration 6: Leveraging Skill Sets
Entrepreneurial
• Decisions on allocation of resources ‐ money, people, effort
• Co...
Consideration #7: Executing the Strategy
Carrying Out the Vision
• Understand why the parent company came to the 
United S...
Consideration 8: Reporting
Understanding What to Report Back
• Key communications tool
• Use to build successes and explai...
Consideration 9: Rethinking What Works
Understanding That Practices That Worked in 
Parent Country May Not Work Here
• Com...
Consideration 10: Communicating
Maintaining Appropriate Dialogue Back & Forth
• Understand company cultures in both office...
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Navigating Unknown Territory: Top 10 International Considerations

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Entering the U.S. market or taking your U.S. business abroad adds a whole new set of complex laws, operating regulations and country-specific policies to the challenges of running a business. At Houston CPA and advisory firm Doeren Mayhew's 2014 client conference, international tax and advisory leaders Carrie Koshkin and Jennifer Mailhes shared best practices and real client experiences for steering clear of risks, managing tax implications and improving intra-company operations.

Published in: Business, Technology
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Transcript of "Navigating Unknown Territory: Top 10 International Considerations"

  1. 1. Navigating Unknown  Territory: Top 10  Considerations Carrie Koshkin, JD Jennifer Mailhes, CPA Shareholders at Doeren Mayhew Copyright © 2014. All Rights Reserved.
  2. 2. Tax Considerations • • • • • Export Incentives: IC‐DISC Taxable Presence Entity Classification Considerations Foreign Tax Credits U.S. Reporting Requirements Copyright © 2014. 
  3. 3. Consideration 1: Export Incentives • IC‐DISC: Export incentive – IC‐DISC is paid a commission by the related party – The related party receives a deduction for this  commission payment – IC‐DISC is not taxed on the commission income – The IC‐DISC is deemed to make dividend  distributions to its shareholders, which are taxed  at the dividend rate Copyright © 2014. 
  4. 4. Consideration 2: Taxable Presence • Statutory: U.S. trade or business  • Income tax treaties: Permanent establishment  Copyright © 2014. 
  5. 5. Consideration 3: Business Form • Entity classification election • Deferral v. flow‐through structures Copyright © 2014. 
  6. 6. Consideration 4: Foreign Tax Credits • U.S. provides a credit for foreign taxes – Limited to U.S. tax on foreign sourced income Copyright © 2014. 
  7. 7. Consideration 5: U.S. Tax Filings • U.S. companies must file U.S. informational  returns for the foreign entities they control • Foreign‐owned U.S. companies must file U.S.  tax returns and informational returns – Foreign business with U.S. trade or business must  also file Copyright © 2014. 
  8. 8. Consideration 6: Leveraging Skill Sets General Manager Skill Set • All the skills of a CEO and more • Typically a GM is hired to grow U.S. or foreign sales, but  they must have hand in all three areas of the business: CEO/GM Sales & Marketing Operations Administration Copyright © 2014. 
  9. 9. Consideration 6: Leveraging Skill Sets Entrepreneurial • Decisions on allocation of resources ‐ money, people, effort • Communicating vision • Motivating team • Understanding all areas of the business Corporate • Understanding of culture and differences in practices • Knowing overall vision • Influencing direction so it can be embraced by the local  team • Optimizing leverage between locations • Appropriateness of controls • Not full autonomy of business owner Copyright © 2014. 
  10. 10. Consideration #7: Executing the Strategy Carrying Out the Vision • Understand why the parent company came to the  United States or the other way around and  articulate that to your team on the ground here • Make sure the local vision is compelling to attract,  retain, motivate in that culture Copyright © 2014. 
  11. 11. Consideration 8: Reporting Understanding What to Report Back • Key communications tool • Use to build successes and explain challenges Copyright © 2014. 
  12. 12. Consideration 9: Rethinking What Works Understanding That Practices That Worked in  Parent Country May Not Work Here • Competitive compensation • Appropriate benefits • Structure of local office to service clients Copyright © 2014. 
  13. 13. Consideration 10: Communicating Maintaining Appropriate Dialogue Back & Forth • Understand company cultures in both offices • Use foreign resources where appropriate • Make sure you have appropriate authority in the local  office to be successful and flexible Copyright © 2014. 
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