Inter-company pricing embraces some basic concepts. Those principles emanate from virtues of corporate structures that have related ownership of entities. The dealings between related entities brings into play arms length standards applicable to related entities. (See TaxConnections, April 24, 2014, Introduction to Section 482 and International Financial Centers) These governing guidelines are promulgated by regulation particularly to conduit entities that provide sales, services, personal property, and intangible property entities that compliment global enterprise of a parent or subsidiary. This writing focuses upon the guidelines that establish the borders of intangible property. Read More


As an introduction to International Financial Centers and the pricing concepts between structures of entities, an integration of international law principles and taxation concepts is desirable. This is the essence and difficulty of understanding Financial Centers Offshore. It requires a melding of international financial law, international civil and criminal law, and international taxation rules. It is the bifurcation of these disciplines that makes International Financial Centers so elusive.

The foundation to a discussion of entity structure concepts is melding the taxation rules peculiar to foreign corporate entities; controlled entity rules, source of income Read More

A Licensing Company is a type of offshore company that involves intangible property and the licensing of its use. It involves a variety of issues relating to country disparity. This use of the offshore situs usually is a result of a particular foreign situs imposing withholding tax upon royalty income and is not treaty accommodating. Also, one may find peculiar foreign situs rules that effect the disposition of industrial property rights.

Licensing Companies seek International Financial Centers that provide more reliable substantive judicial systems to protect intangible and substantive rights, as compared to a country situs of licensing use. Licensing Companies also provide flexibility. The flexibility lies in the contracting for rights to use in different foreign locations. The issues of Subpart F Income, source of income concepts, and arm’s length pricing of related parties are the focus of structural planning. Read More

TaxConnections Blog PostINTRODUCTION

With all the attention that is focused upon the inability of the United States government to facilitate harmony and solution in the legislative and executive branches regarding national debt, it might be a moment to reflect upon just where the implications of debt default arise. In a more indirect way, those implications do have a bearing upon taxation and governmental policy. They present real issues for accountant’s managing international business structures. (For reference see Currency and International Financial Centers, 30/September 2013, TaxConnections, International, Tax Blogoshere, United States.)

Government policy impacts and has transmission effects that ripple across foreign investment considerations regarding direct investment in the United States from offshore. That impacts integration of the global market place. As will be touched upon, the international financial system is integrated to the extent that a decision by a sovereign as to its monetary policy, alone, impacts its base currency, its eurodollar currency, and all the cross currency relationships across the globe. The uncertainty created by loggerhead dramatics does not promote global stability requisite to sound financial taxation planning.


In connection with considerations given to these financial effects, it is appropriate to engage the concepts referred to as Sovereign Immunity and the Act of State Doctrine. These concepts are enforcement barriers in litigation. Equally important, the Act of State Doctrine impacts one of the vital considerations of sovereigns and policy. To adequately explain the Act of State Doctrine, it is helpful to contrast it with the doctrine of Foreign Sovereign Immunity. Read More