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Untaxed Offshore Profits

Forbes reports that there is $2.1 trillion dollars in profits sitting outside the US. Our government wants these US corps to bring the money in and pay 35% tax. The Corporations say no (and the US can't force them to bring the money home). In your opinion who is being short-sighted, The US or the Corporations? And how would you compromise so that both groups can be appeased?

Answers

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

Add INVERSIONS into the mix?

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

Wayne
I don't think the US (if by that you mean the US Govt) is a factor here. But I would accept substituting Taxpayer:).

As long as the US has the tax code it does, the money won't come in. Why would it?

Weird that individual taxpayers with overseas income sources can't retain the income tax free overseas like corporations? The USA is one of a handful of countries that taxes individuals on worldwide income. That's another issue with the current tax code.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Yes, the IRS made it a mandate several years back to start collecting on money held overseas for individuals...

Dan Cronin
Title: CFO
Company: RGI
(CFO, RGI) |

Would this tax on individuals off shore income therefore apply to offshore LLC or S Corp income or would these be treated similarly to a C Corp?

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Good question...

John Herndon
Title: Senior Consultant
Company: NOWCFO
(Senior Consultant, NOWCFO) |

Wayne, the ultimate truth in overseas profits is that those profits HAVE been taxed. The form to reference is schedule 5471, this form gives credit for foreign taxes paid on overseas profits but does not exclude the consolidated profits of multinational corporations.

It is truly sad that the individuals promoting the concept of corporate tax dodging that exist under transfer pricing regulations governed by OECD, IRC 482 and legally passed laws in local jurisdictions. The reason for these laws is to promote foreign direct investment. If not for Tax Free Havens and Holidays Singapore would not have had the desperately needed capital invested by foreign corporations in the early 90's. This not only trained their workforce but created applications in spin off technology that boosted their economy and made their country what it is today; this is the Heinlein Principle at its finest point!

I often hear these arguments, mostly from people who cannot grasp the complexities of multinational taxation. I realize that is not your point by posing this question. One rule I have learned as a consultant is that you cannot fix 'stupid', we can do many miracles and work wonders on everything except that.

John

Anonymous
(CFO) |

These need to be asked...

1. If they have already been taxed, what's the appeal or motivation?
2. Are you saying that these strategies are not being abused?
3. Aren't tax free havens the point of the question?

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

It will be interesting to see the repercussions of the leaked Panama Papers

Anonymous
(CFO) |

Speaking of, So John, what is your opinion on the Panama papers?

Anonymous
(Finance Specialist) |

Mr. Herndon, you can choose to insult me by calling me stupid. I've never needed to know the complexities of multinational taxation, although I think I could grasp the concepts. However, aren't we talking here about a lack of multinational taxation? Also, I don't think your response directly answered the questions.

Anonymous
(CFO) |

The profits are indeed being taxed overseas where the source of income is so why should the Corporation be taxed twice on the same income and on a hefty 35%?

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