General Tax Services

General Tax Services 2018-08-25T13:41:51+00:00

General Tax Services

Individuals

  • Tax Return Reviews as part of the TRM process
  • Tax Clearance Certificate representation
  • Tax Objections against Penalty Assessments and incorrect Revenue Authority determinations
  • Tax Appeals when an Objection is not upheld and requires representation on technical tax matters
  • Tax Clearance Certificate applications to formally represent to a third party that all your tax affairs are up to date and in good standing
  • Tax Directive Applications to present to your representative employer(s) in order to benefit from a reduced effective tax rate
  • Private Binding Ruling applications to agree between Tax Authorities and yourself as to the manner in which the said transaction would be taxed
  • Provisional Tax registration for self employed individuals , the elderly whom earn substantial  interest income and for any other income earned which is not defined as remuneration received from employment.
  • Tax Planning and Structuring to determine if you may benefit from a lower aggregate effective rate of tax

Corporations

  • Tax Return reviews as part of a TRM process
  • Tax Objections against Penalty Assessments and incorrect Tax Authority determinations on all Corporate Tax matters
  • Tax Appeals when an Objection is not upheld and requires representation on technical tax matters
  • Tax Clearance Certificate applications to formally represent to a third party that all your tax affairs are up to date more specifically for BEE purposes or tender purposes.
  • Advanced Tax Rulings or Group Tax Ruling Applications for determination of the way in which Tax Authorities will tax a specific transaction, with the outcome of obtaining a valid agreement for 1 year binding on both parties, provided all conditions stipulated are followed.
  • Provisional Tax registration which is no longer compulsory for Private Corporations however is a efficient tax management tool and should be considered
  • Tax Planning and Structuring to determine if your Corporation may benefit from a lower aggregate effective rate of tax
  • Dividend Tax Computational and Advisory Services including odd payout reviews
  • Payroll Computational and Advisory Services including fringe benefit analysis and review

Hidden traps in US outbound foreign corporations

U.S. persons who form foreign corporations become enmeshed in a labyrinth of tax laws and regulations designed to prevent multinational corporations from deferring income.  Here’s a highly simplified summary:

“U.S. shareholders” are U.S. natural persons, partnerships, corporations, trusts, and estates that own, respectively, 10% or greater interests in a foreign corporation.  If such U.S. shareholders own more than 50% of the shares in an entity classified as a foreign corporation (e.g., a Panamanian S.A.), by vote or value, that entity is a controlled foreign corporation (CFC).  For instance, a foreign corporation with six U.S. shareholders owning 10% each and four foreign shareholders owning 10% each is a CFC.

In general, U.S. shareholders in a CFC can’t defer U.S. tax on its passive income.  This may include rental income from real estate, although not what the IRS calls “actively managed real estate.”  In addition, in a CFC:

* The tax rate on capital gains and dividends isn’t available.  All gains are taxed at your marginal rate.
* Investment losses can’t be allocated against gains until the CFC is liquidated.

One way to avoid these unfavorable tax consequences is to elect to have the CFC taxed as a U.S. C-corporation.  However, like a domestic C-corp, this results in double taxation.  Another option is to file Form 8832 with the IRS and elect to have the CFC treated as a disregarded entity (if there is only one owner) or a partnership (if there are multiple owners).  That way the gains and losses of the CFC flow through to the U.S. owners as if the CFC didn’t exist.

Unfortunately, many foreign corporations are ineligible for this election.  That includes most varieties of the Sociedad Anónima, including those in Panama and Uruguay.

You must also file IRS Form 5471 each year for any CFC (and for certain transactions in non-CFCs) in which you hold a 10% or greater ownership stake.  In addition, you must file IRS Form 926 when you transfer property to a foreign corporation (CFC or otherwise) if you own 5% or more of its stock.  Separate filing requirements apply if your CFC is taxed as a foreign partnership or foreign disregarded entity.