International tax advisory services for US-based businesses
July 14, 2021
Living and working abroad inevitably complicates your tax status. Without adequate counsel or guidance, businesses often overpay on taxes. At Accountants Without Borders, we’re a San Diego-based consultancy committed to helping you expand and succeed. If you’re a US-based company conducting business internationally, our international tax advisory services are unrivaled. It requires extensive expertise and experience to navigate tax regulations in one country. In two, it takes twice as much. Fortunately, we have that and more.
Here’s what to know when filing taxes for US-based businesses:
Where you are matters
Firstly, our international tax advisory services will focus on your location. Where you choose to live significantly impacts your tax rate.
For example, in the UAE, you won’t pay any individual or corporate taxes. However, in Japan, the tax rate on businesses is over 20%. These different tax rates are critical to consider when optimizing your tax situation.
More importantly, it’s crucial to consider tax treaties. To reduce the likelihood of duplicate taxation and support international commerce, the US has agreed to tax treaties with most major countries. Research to see if this applies to you.
These provisions exempt US companies from paying that foreign country’s tax on income from business conducted in that foreign country if the company doesn’t have a permanent establishment there. Permanent establishment equates to having a fixed place of business.
Understanding the nuances of tax treaties requires extensive training and considerable expertise. Lucky for you, that’s what we offer at Accountants Without Borders.
Offshore bank account reporting
Many are oblivious to Foreign Bank Account Reports (FBAR). However, this is a requirement, and failing to comply can have severe repercussions.
FBAR is an effort to identify those evading taxes and hoarding money in offshore accounts. If your business has foreign accounts totaling $10,000 or more at any point during the tax year, you are obligated to file Form FinCEN 114 electronically by June 30th.
However, it’s important to remember this is the cumulative amount. When adding up the value of all your accounts, if the total is at least $10,000, you have to file. FBAR also applies to personal accounts, and penalties for failing to file are steep.
It’s crucial to make sure you’re submitting your FBAR filings each year for both your business and personal finances. Understanding all these unique requirements is complicated, and many business owners are entirely unaware, ultimately to their detriment.
Luckily, our international tax advisory services guarantee you know precisely what and when you need to file, so penalties are a thing of the past.
When running a business, there are abounding expense deductions to capitalize on. Reasonable or ordinary business-related expenses can be deducted from US tax liabilities. These deductions require discretion when determining what constitutes a reasonable expense.
If you started a coffee shop, an oven for baked goods would be a reasonable business-related expense. However, that wouldn’t apply to someone who works in finance. There are general guidelines to follow. Deductible expenses include:
Legal and professional services
Taxes and licenses
Understanding precisely what is and isn’t deductible is crucial, but it requires considerable industry knowledge and acumen to maximize your deductions. That’s why it’s imperative to contract international tax advisory services.
Contact us now for a consultation!
If you need international tax advisory services to optimize your tax situation, Accountants Without Borders is an unparalleled solution. We guarantee you will pay only what you owe, and we promise to maximize your savings. We want to help your business expand. With us, the world isn’t just your marketplace; the world is your oyster. Contact us now for a consultation!