Archive for International

Real Estate Expenses After Acquisition Of Property For Tax Purposes

After a property is purchased, there is generally a time period that a property is held before it is developed. Common expenses that are incurred are property taxes and interest. Other expenses incurred can be classified as an operating expense, added to inventory cost or capitalized for tax purposes.

Property taxes and interest on vacant land are generally capitalized or added to the cost of inventory for real estate. These expenses on vacant land can only be deducted in the same tax year if there is property income received and the corporation is not in the business of development. Read More

Written by | Posted in Canada • International • Property Tax • Real Estate

Tax Consequences For Corporate Entry Into Canada

A company is considered to have immigrated to Canada if the corporation’s central management and control has moved to Canada, regardless if initially incorporated in Canada or not. Therefore, when a business owner moves to Canada, so does the business.

When the company enters Canada, the company is deemed to have disposed of and reacquired all of the company’s assets and liabilities at their fair market value (FMV) right before coming to Canada. As the assets and liabilities of the company are being re-valued at the FMV, this is considered to be the company’s valuation date. Read More

Written by | Posted in Canada • International

Non-Active Canadian Corporations Are Not Required To File A Corporate Tax Return…Or Are They?

Non-resident corporations that have no activity in Canada during its fiscal year are not required to file a Canadian corporate tax return. However, without filing a Canadian corporate tax return, the Canada Revenue Agency (CRA) will not know that you did not have activity in Canada. Therefore, CRA may send you a letter requesting that a return is required to be filed.

If CRA requests that a return be filed, even though your company had no activity in Canada, you may be tempted to file a return in order to be in compliance. Read More

Written by | Posted in Canada • International • Tax Refund

Real Estate Expenses During Pre-Acquisition

Grant Gilmour, Tax Advisor, Tax Blog, Vancouver, Canada, TaxConnections

There are various real estate expenditures that are deductible to the corporation and others that are capitalized or allocated to inventory. In this FAQ, we will discuss the real estate expenses that are deductible during the pre-acquisition phase as an operating expense to the corporation in the fiscal year that expenditures were incurred.

There are many “soft” costs in real estate such as representation costs, site investigation costs and financing expenses.

Representation costs are eligible for a deduction for amounts paid in the year. Examples of these costs are rezoning applications, project planning and preliminary design costs. Read More

Written by | Posted in Canada • International • Real Estate

FinCEN Further Restricts North Korea’s Access to the U.S. Financial System and Warns U.S. Financial Institutions of North Korean Schemes

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a final rule under Section 311 of the USA PATRIOT Act that severs Bank of Dandong, a Chinese bank that acts as a conduit for illicit North Korean financial activity, from the U.S. financial system. FinCEN also issued today an advisory to further alert financial institutions to schemes commonly used by North Korea to evade U.S. and United Nations (UN) sanctions, launder funds, and finance the North Korean regime’s weapons programs.

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Written by | Posted in Financial Institutions • FinCEN • International • Treasury Regulations • United States

Petty Cash Management: A Good Practice System

Petty cash is a float that gets replenished monthly and is a convenient way to reimburse staff for company purchases or to cover minor expenses. Petty cash is considered a current asset on the balance sheet.

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Written by | Posted in Canada • International

Corporate Tax Executive Compensation in 2017 – The Real Story

When you spend years acquiring compensation data on corporate tax executives you learn a lot! TaxConnections conducts a compensation study every two years given the enormity of the project. This requires an extraordinary amount of effort to compile information, match up technical responsibilities for specialized tax roles, organize the information by geographical regions, and make sense of a wide range of equity programs. We conduct compensation studies in order to help corporate management teams attract the tax talent they need. These studies are not money-makers given the great deal of time it takes to prepare them. It is difficult to obtain salary information as people must trust you in order to get the real story! We must also organize it in a fashion that makes sense when you step out of the realm of base plus bonus and into the realm of equity and perks which are as vast as the sea. What you need to know is the real story behind corporate tax compensation if you want to successfully retain and keep the very best tax talent on the market..

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Written by | Posted in Corporate • International • Tax Management • Tax Reform • United States

What Are the Implications for Partnerships and Partnership Taxation Under the Republican Proposals for Tax Reform?

Charles Lincoln, Esq. (LL.M. International Tax) authors this article analyzing from an international tax law perspective, what might be the effects of the new proposed partnership rules in the US?

Partnerships are a complex combination of sole proprietorship rules, corporate rules, and financial accounting rules—the tax consequences are outlined primarily in Subchapter K of the US Internal Revenue Code.[1] Partnerships often involve individuals and individuals with corporations acting as partners engaging in business. However, when comparing the US approach to partnerships, there can be differences—especially in the concept of opaque and flow entity through taxation. Opaque is when the profits are taxed at the corporate entity level and flow through is when the profits are taxed at the individual level.

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Written by | Posted in International • Tax Reform • United States

The Global Forum on Tax Transparency Intensifies the Pressure on Tax Evaders Worldwide

In the aftermath of the release of the “Paradise Papers”, 200 delegates from more than 90 delegations met in Yaoundé, Cameroon for the 10th meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes which now includes 147 countries and jurisdictions.

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Written by | Posted in International • Tax Compliance • Tax Fraud • Tax Penalties

Foreign Real Estate Investments & Taxation in Italy

Italian taxation of foreign investments in Italian real estate is complex.

Transfer taxes charged upon the acquisition of the real estate (alternatively, registration tax or VAT) vary depending on the nature and tax status of the buyer (foreign private individual, foreign company purchasing and owning the real estate directly, or foreign individual or corporate investor purchasing and owning the real estate through an Italian controlled entity), as well as the nature and tax status of the seller (private individual vs. unincorporated business or commercial company registered as a VAT taxpayer).

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Written by | Posted in Income Tax • International • Real Estate

Declaration of Tax Residence for Entities in Canada

In December 2016, an additional section was added to the Income Tax Act (ITA) that requires Canadian financial institutions to collect certain information about your company. The information is not automatically sent to the Canada Revenue Agency (CRA); however, if the financial institution determines the information needs to be reported to the CRA they will. CRA will then determine if the information needs to be sent to the foreign government related to the company’s residence or the company’s controlling person’s residence. Exchanging information is a new international standard of tax cooperation.

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Written by | Posted in Canada • International

International Tax Reform & Can Wealthy Americans Move to Virgin Islands and Not Pay Federal Capital Gains Tax?

The Senate Finance Committee Modified Mark has published the modification to source rules involving possessions; the following is a description and analysis of the proposal:

The proposal modifies the sourcing rule in section 937(b)(2) by modifying the U.S. income limitation to exclude only U.S. source (or effectively connected) income attributable to a U.S. office or fixed place of business. The proposal also modifies section 865(j)(3) by providing that capital gains income earned by a U.S. Virgin Islands resident shall be deemed to constitute U.S. Virgin Islands source income regardless of the tax rate imposed by the U.S. Virgin Islands government.

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Written by | Posted in Expatriate • International • Tax Reform
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