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Tag Archive for Tax Provision

7 Habitual Mistakes Companies Make – Chapter 4 (11)

TaxConnections Blog Post
What Should Taxpayers Do When the IRS Queries Their Tax Affairs? –

FIRSTLY, IT IS recommended that any request for information or documentation be reduced to writing as this will help set the parameters of the audit going forward.

The taxpayer should also check which tax years are involved and which taxes.

Where the IRS requests information beyond a typical three-year period, a defense may lie under the appropriate tax provision that a statutory limitation period may apply where a taxpayer may successfully argue that it does not have to provide any information or documentation, as the period for raising any additional assessments may have prescribed in that the original tax assessment has become final and conclusive. Obviously, the taxpayer Read more

A Practical Guide To Identifying, Gathering, And Documenting A Sustainable Research Tax Credit Claim

Introduction

The Research and Experimentation Tax Credit (hereinafter “RTC”) was added to the Internal Revenue Code (hereinafter “the Code”) in 1981 as a temporary provision of the Code at a time when research and development based jobs were significantly declining in the United States due to these jobs being moved overseas where labor rates and overall operating costs were considerably less. For this very reason, the RTC was introduced into the Code in 1981 to motivate business entity taxpayers to incur significant and qualifying research and development expenditures with the high expectations that such an advantageous tax incentive would facilitate in stimulating job growth and investment in the United States and Read more

China Relaxes Procedures To Send Cash Out Of Country

iStock_000015914943XSmallAccording to a recent Deloitte webcast China is simplifying its procedures for outbound payments.

Bulletin [2013] No. 40 and Huifu [2013] No. 30 removes the requirements of tax clearance certificates for outbound payments.

Also, SAFE is allowing cross-border cash pooling for pilot multinational companies and state-owned enterprises. This allows for cross-border intercompany borrowing, lending and netting or cash pooling (within limits). Tax considerations include deductibility of intercompany interest expense, withholding tax on interest payments, and transfer pricing issues concerning intercompany charges.

Further, excess cash from the China operations of an MNC could be used to finance overseas cash needs of sister companies via equity or debt. Read more