By WTS US on February 7, 2011
WTS is pleased to announce the opening of its office in Boston, at 180 Canal Street. The office will be lead by Rick Gardner (CPA, MST), who will be supported by a team of seasoned corporate and fund tax professionals. Rick joined WTS after a distinguished career as VP of Tax for a major multinational. Prior to that, Rick served in the Boston and Frankfurt Germany offices of a Big 4 firm. Rick and his team bring vast experience in the areas of cross-border tax planning as well as tax accounting. According to David Neuenhaus, partner in charge of WTS New York: “With the addition of Rick Gardner and the Boston team, WTS is well-positioned to continue its rapid growth and client-oriented initiatives. We look forward to being able to enhance our service capabilities in the Boston area as well as continue our roll-out of value-added tax service offerings.”
For further information, please contact: info@wtsus.com
By David Neuenhaus on November 2, 2010
Comment Letter to IRS Re: Notice 2010-60, Submitted October 12th, 2010 [.pdf]
We are pleased to provide you with the following comments to the Foreign Account Tax Compliance Act (“FATCA”) provisions of the Hiring Incentives to Restore Employment Act. Our comments focus particularly on the potential application of the FATCA provisions, in light of the preliminary guidance provided in Notice 2010-60 (“Notice”),1 to foreign pension and retirement funds.
I. Overview
The substantive FATCA rules of section 1471 apply to foreign financial institutions (“FFIs”). An FFI is broadly defined2 and generally appears to encompass foreign retirement accounts including pension funds. Accordingly, absent specific guidance to the contrary the obligations of section 1471 can apply to most types of foreign retirement funds. Section 1471 does not apply, however, to the extent that the beneficial owner of a subject payment is part of a class of persons posing a low risk of tax evasion as identified by the Secretary.3
A foreign entity that is not an FFI is a nonfinancial foreign entity (“NFFE”). NFFEs are subject to substantive FATCA provisions found principally in section 1472.4 Similar to the section 1471 provisions, the section 1472 provisions do not apply to the extent that the beneficial owner is part of a class of persons identified by the Secretary as posing a low risk of tax evasion.5
Continue reading “Foreign Account Tax Compliance Act — Comments on Notice 2010-60″
By David Neuenhaus on October 15, 2010
Reprinted from Tax Notes Int’l, April 26, 2010, p. 335 [.pdf]
Fund structures are often developed with a goal of accommodating favorable tax treatment for various types of investors (for example, pensions and individuals) from multiple jurisdictions. This requires satisfying often inconsistent statutory requirements, leading to the complexity inherent in many investment fund structures. When funds confront the practical difficulties of satisfying competing requirements, pragmatic approaches are sometimes adopted. For U.S. withholding taxes and U.S. tax reporting obligations, those approaches can result in overwithholding for investors and penalties for funds. For inbound funds (that is, non-U.S. investment funds investing into the U.S.), the risks and inefficiencies can be particularly acute.
Continue reading “Inbound Investment Funds and Withholding Foreign Partnership Status”
By Francis Helverson on October 15, 2010
Reprinted from The Journal of Private Equity, Winter 2004 [.pdf]
A Dollar of Prevention Is Worth a Pound (or Euro) of Cure
Domestically, private equity and venture capital investment structures have become increasingly standardized. Due to their familiarity, this has lead to a tendency for funds to use the same or similar structures for non-U.S. investments. This can lead to unanticipated tax consequences and loss of cash flow.
This article addresses special tax considerations applicable to U.S. private equity and venture capital funds with non-U.S. investments. It briefly explains the general U.S. tax rules applicable to investments in foreign companies and provides some planning suggestions. It then describes certain tax issues encountered in three typical investment structures: 1) the outright ownership of a foreign portfolio company; 2) the acquisition of convertible preferred shares in a foreign portfolio company; and 3) a mezzanine loan to a foreign company. A basic understanding of the relevant U.S. tax rules is beneficial in terms of investment analysis, investor solicitation, deal
structuring, and fund management.
The matters addressed in this article are of a technical nature; however, it is not written in “tax speak,” but rather in plain English and is intended to provide investment professionals, fund administrators, and corporate counsel with a working knowledge of the matters addressed.
Continue reading “U.S. Tax Planning for Investments in Foreign Portfolio Companies”
By David Neuenhaus on October 15, 2010
Financial and retirement planning for high net worth individuals frequently involves international tax planning. This article focuses on certain U.S. international income tax considerations that arise in the cross-border context. These considerations can arise, for example, where an investment portfolio includes non-U.S. assets (e.g., foreign situs real estate or stock in non-U.S. companies), a second home is purchased in a foreign country or an individual retires to a foreign country. Each situation requires a close analysis of the tax, legal and relevant treaty related issues. Many practitioners are comfortable with the general estate and gift tax planning considerations in the international context. This article, therefore, focuses on certain U.S. international income tax considerations that arise in the cross-border context.
Continue reading “Investing Overseas: Tax Issues for Foreign Investments and Retirement”
By Francis Helverson on October 14, 2010
On June 1, 2006 representatives of Germany and the United States signed a new Protocol to amend the existing income tax treaty between the two countries (the “Treaty”).
Continue reading “Protocol to German / U.S. Tax Treaty (2006)”
