At WilkinGuttenplan, we are finely tuned to the needs of our clients with operations outside the United States. We serve clients throughout the world in the areas of financial reporting, tax compliance and strategic planning.
- We advise foreign based businesses on the best way to structure their U.S. operations to minimize U.S. taxes and often serve as hands on advisors to assist them with the nuances of doing business in the U.S.
- For businesses that send executives abroad, we can help design tax equalization programs to ensure that the executive is tax neutral with respect to foreign assignments.
- Our attest department is well versed in International Financial Reporting Standards (IFRS) which enables us to assist our clients in complying with IFRS reporting standards in their home country, if required.
- Our tax department serves the multinational tax needs of both our individual and business clients by providing comprehensive tax planning to maximize the tax benefits that exist in the international tax arena.
Our services for individuals include:
- Preparation of U.S. personal tax returns for individuals with non-U.S. income or assets such as foreign bank accounts, investments in foreign mutual funds and ownership of closely held foreign business entities.
- Pre-immigration tax planning to assist those moving to the US, either permanently or for a temporary assignment to minimize U.S. taxes to the extent possible.
- Consultations regarding U.S. taxation of foreign trusts.
- Assistance to U.S. citizens and residents who have previously unreported offshore holding under the various IRS programs to facilitate tax compliance.
In addition, we also guide our clients with complex U.S. tax reporting.
As an independent member of the BDO Alliance USA, we have the ability to provide a truly global reach. The BDO Alliance USA relationship provides us with access to a global network of advisory services in 138 countries, with almost 55,000 people working out of 1,200 offices worldwide. We work collaboratively with BDO Alliance USA personnel in other countries to provide a worldwide approach to tax minimization and profit maximization.
What Businesses and Individuals Should Expect When In the U.S.
Are you considering coming to the United States to work or start a business? Or, have you recently arrived in the United States and are unsure of what to do next? Click below to explore some ideas about how your work and business life might be different in the United States than what you are used to in your home country.
Business Financial Matters
- Business Formation and Registration – Businesses in the U.S. can be formed using several different legal entity types. The most common are: corporations, partnerships, limited liability companies or proprietorships. There are advantages and disadvantages to each type. Businesses looking to establish U.S. operations should consult with an accountant or attorney in the U.S. to determine the optimal legal and tax structure for the business. Businesses are also required to be registered in the various jurisdictions where business operations are located. As part of the formation process, a company selects a calendar (December 31) or fiscal reporting year. Fiscal year reporting is not available for all types of entities.
- Income Taxes – Income taxes are imposed by the Federal government, as well as by states and localities. The assessment and payment of tax is dependent on the legal structure the business. The U.S. holds tax treaties with many countries which may impact the reporting and taxation of business income.
- Sales and Use Taxes – In many parts of the world, Value Added Taxes (VAT) are imposed on the transfer of goods and services. In the United States, a system of sales tax is used instead. The rates and requirements vary by location. Each state has its own system for determining the taxability of a transaction, and for reporting and remitting the tax. In some situations, such as online purchases, transaction may be subject to sales tax, but the vendor does not collect the tax. In this case, the buyer is responsible for remitting “use tax” on their own.
- Financial Statements –The U.S. government does not require financial statements prepared by an outside accountant; the tax return generally includes the information required to be reported to the government. Financial statements are required for a company whose stock is listed on an exchange, and are frequently required by lenders as part of the loan compliance. Outside accountants can issue financial statements under different levels of service; compilation, review and audit. U.S.-based businesses typically report under U.S. generally accepted accounting principles, but International Financial Reporting Standards are becoming more common. Closely held business may also opt to report using the tax or cash basis of accounting.
Individual Financial Matters
- Social Security Number – Many transactions with the government require use of a Social Security Number. This includes the reporting of wages earned while working in the United States and filing tax returns and opening a U.S. bank account. To obtain a U.S. Social Security Number, an individual must be authorized by the Department of Homeland Security to work in the U.S. To see the requirements and process for obtaining a Social Security Number furnished by the Social Security Administration, click here. (For those who are not authorized to obtain a Social Security Number, we can assist the process of obtaining an Individual Taxpayer Identification Number from the Internal Revenue Service.)
- Lack of Credit – Because expatriates to the U.S. may not have a U.S. employment history, it may be difficult to obtain the credit needed to buy a home or to lease a car. It may be possible for the employer to obtain credit, subsequently leasing the property back to the executive or employee. Keeping in mind there may be tax consequences to this, always consult with an accountant before entering into this type of agreement.
- Insurance – To operate a vehicle, and for many other purposes, insurance is required. This can be difficult for an expat to obtain. In particular, auto insurance is a challenge because most insurance providers will not recognize a foreign driving record. It may be possible to obtain a letter from a foreign insurance company to help facilitate acquiring a policy in the U.S.
- Taxes – Taxes in the U.S. can be complicated! There are taxes at every level; Federal, State, and (sometimes) Local. Additionally, there are taxes imposed on the purchase of certain goods and services (sales tax), and the rate and applicability of these can vary by locality. Income taxes at the Federal level are based on worldwide income of U.S. citizens and residents. Generally, taxes are withheld from your paycheck by your employer to pay your taxes over a period of time, rather than making a large, lump sum payment.
- Employment “At-Will” – In the U.S., contracts for employment are typically only for senior executives or others with special compensation agreements. Most employment arrangements are “At-Will”, meaning either the employee or employer can decide to terminate the employment without cause.
- Employee Benefits – Many employers in the U.S. offer various benefits to their employees, such as paid time-off for vacation or illness, and various insurance programs such as health, dental, vision and life insurances. Employers often require employees to contribute to the cost of the insurance programs offered, and the rate of contribution varies from employer to employer. Many employers also offer some type of retirement savings program, which typically includes employee and employer contributions to fund for future retirement needs.
Offshore Bank Account Compliance Services
The crackdown on offshore bank accounts has been under a growing spotlight in recent years. There are frightening headlines of individuals being sent to prison with sentences for offshore tax evasion.
However, many U.S. taxpayers are simply unaware that the U.S. requires its residents and citizens to pay tax on a worldwide income and to file an annual form completely independent of their tax return, known as a Form 114, Report of Foreign Bank and Financial Accounts, also known as an FBAR. The Internal Revenue Service has established the Streamlined Filing Compliance Procedures, to give those who qualify an opportunity to come forward, file old tax returns, and by paying a pre-determined penalty, be free of criminal or additional civil penalties.
Our International Commerce Group not only understands the technical requirements of addressing the tax filings but we are intimately familiar with the stress of learning that past filings may have been missed. We understand that addressing this problem can be as much an emotional issue as a financial issue.
We have worked with many taxpayers to help them determine the best course of action to address these issues. In addition, our staff has a comprehensive understanding of related tax return issues such as:
- Repatriation Tax and GILTI system
- Passive Foreign Investment Company PFIC taxation rules.
- Treatment of foreign business operations.
- Claiming the foreign tax credits.
- Impact of amended federal filings on state tax.
U.S. – India Practice
Cross Border Solutions
Today’s business environment is truly global with many of our clients taking notice of India’s rapid economic growth. As the world’s second most populous nation with more than one billion people, India is projected to become one of its biggest economies. WilkinGuttenplan’s U.S. – India Practice knows first-hand how cross-cultural dynamics impact your business, and our diverse team has a deep understanding of international business, the local ethos, customs and the cultures that drive it.
We understand that doing business in India is far more regulated and challenging than doing business in the United States. Our U.S. – India Practice focuses on practical solutions to the daily financial hurdles faced by closely held middle market companies and their owners. We understand that waiting days for a fully researched conclusion to a question is useless if action is needed to be taken right away.
We are often our client’s first point of contact with any financial problem due to our ability to brainstorm possible solutions real time about the issue at hand. Working with our strong network of attorneys, Chartered Accountants and other Indian advisors, we are uniquely positioned to provide seamless solutions to clients in India exploring the U.S. markets as well as clients in the U.S. considering operations in India.
Service Offerings for Businesses Entering the U.S.:
- Assisting businesses from India choose the right type of legal entity in which to operate in the U.S.
- Advising on the acquisition or sale of existing U.S. businesses for accounting and tax matters and being an integral part of the transaction team with legal counsel.
- Providing day to day assistance for accounting, tax and other financial matters.
- Assistance with procuring related services such as banking, insurance, payroll services, etc.
- Providing audited financial statements under International Financial Reporting Standards (IFRS).
- U.S. tax return preparation and advisory services for the business and the key executives.
- Advising on transfer pricing matters. By working with our trusted partners, we are able to ensure that clients develop a defendable transfer pricing policy which satisfies both the U.S. Internal Revenue Service and the Indian Tax Department.
- Most importantly, being a trusted business resource for a U.S. or India based management team.
Service Offerings for Businesses Entering India:
- Advise on the best legal structure to minimize U.S. taxes as a result of Indian operations and enabling an efficient exit upon termination of the Indian business. As a result of the Tax Cuts and Jobs Act of 2017, traditional “outbound” planning has changed dramatically. We can assist evaluating current structures to make adjustments to take advantage of the new opportunities in this area.
- Working closely with Chartered Accountants from India to ensure that tax planning done from India is consistent with U.S. tax planning.
- Considering the use of holding companies in other jurisdictions such as Mauritius or Singapore to help minimize worldwide taxes.
Service Offerings for Nonprofits and Individuals:
- Assisting nonprofit organizations (80G) in India obtain U.S. Section 501(c)(3) status so that U.S. donors can make U.S. tax deductible organizations to support the Indian nonprofit organization.
- Pre U.S. immigration tax planning to minimize U.S. tax under the U.S. worldwide taxation system.
- Estate planning for individuals with assets in the U.S. and India and individuals who are not U.S. citizens.
- U.S. tax return preparation for individuals with various investments in India such as Provident Funds, LIC investments, demat accounts, etc.
- Close coordination with trusted Charted Accounting firms in India to provide an integrated approach to tax filings in both the U.S. and India and to take full advantage of the benefits of the Foreign Tax Credit and the U.S. – India Income Tax Treaty.
- A deep bench of expertise with respect to individuals who have previously undeclared bank and securities account outside the U.S. with a special expertise on uniquely Indian issues – – for example the implications of a U.S. taxpayer being named as co-owner of an aging parents account in India, the U.S. tax impact of deferring gain on property sale under Indian law which promote investment in property, the U.S. treatment of Hindu Undivided Family (HUF) structures.