International Accounting & Compliance IMPORTANT LEGAL INFORMATION PLEASE READ
LEGAL NOTICE This piesentation is piepaieu foi geneial guiuance only, anu uoes not constitute the piovision of accounting, legal oi tax auvice in any mannei, wiitten tax auvice unuei 0.S. Inteinal Revenue Seivice Ciiculai 2Su, oi any piofessional auvice of any kinu. "uiay Inteinational" oi "uiay" iefeis to uiay CPA, PC (a 0.S. Ceitifieu Public Accounting fiim) anu uiay Inteinational Ltu (a Bong Kong Limiteu Company).
The infoimation pioviueu in this piesentation shoulu not be a substitute foi consultation with qualifieu piofessionals who unueistanu youi situation, as it will uiffei fiom otheis. In auuition, when making any tax planning uecisions you shoulu consult with youi own legal, tax, accounting anu othei piofessional auvisois.
IRS Ciiculai 2Su notice: Tax auvice, if any, incluueu in this communication (incluuing any attachments) is not intenueu oi wiitten to be useu, anu cannot be useu, by the iecipient foi the puipose of avoiuing penalties that may be imposeu unuei the 0.S. Inteinal Revenue Coue oi by any othei goveinmental tax authoiity.
This piesentation has been pioviueu as a couitesy, anu theiefoie while caie has been executeu in the piepaiation of this infoimation uiay CPA, PC (0.S.), uiay Inteinational, Ltu. anu all of theii affiliates make no iepiesentations as to its completeness, accuiacy oi the timeliness of the infoimation anu takes no iesponsibility to upuate this infoimation, such infoimation is being pioviueu without waiianty of any kinu.
2u1S uiay CPA, PC anu uiay Inteinational Ltu. with all iights ieseiveu, this uocument shall not be iepiouuceu oi uistiibuteu without the expiess wiitten peimission of uiay CPA, PC oi uiay Inteinational, Ltu.
Foi moie infoimation about us, please visit us at !!!"#$%&'()*"+,-" ///01)23%#4+.,"01)2 ' 1)23%#452%.-01)2 ' 6789 :;< =>? ' ,(.+ +,@"", 987A 1.,4A 1)B#,@4 International Accounting & Compliance WHO WE ARE )B@ 3@)C.-" uiay Inteinational ("uiay") is an inteinational netwoik of public accounting anu consulting fiims baseu in the 0.S., Bong Kong, China anu Euiope. uiay was staiteu ovei 1u yeais ago in the 0.S. (via its pieuecessoi) anu took the foim of uiay Inteinational in 2u1S as the iesult of the netwoiking of multiple inuepenuent piactices anu piofessionals.
uiay pioviues inteinational accounting anu compliance solutions in the 0.S., Ameiicas, Asia anu Euiope. uiay focuses on 0.S. accounting, tax, anu goveinmental compliance foi multinational companies, investois, 0.S. peisons living oveiseas anu foieign investois anu companies investing in oi moving to the 0.S.
uiay also consults on compliance with 0.S. laws foi businesses anu financial institutions oveiseas such as the Foieign Coiiupt Piactices Act (FCPA) anu the Foieign Account Tax Compliance Act (FATCA), the IRS 0ffshoie voluntaiy Bisclosuie Piogiam, anu the Piogiam foi Non-Piosecution Agieements oi Non-Taiget letteis foi Swiss Banks.
uiay's piincipals, paitneis, anu employees have seiveu clients woiluwiue. uiay has offices in ueneva, Bong Kong, Seattle, Shanghai anu plans to open an office in Singapoie in late 2u1S.
uiay's 0.S. public accounting fiim (uiay CPA, PC) is iegisteieu with the 0.S. Public Company Accounting 0veisight Boaiu anu is a membei of the Ameiican Institute of Ceitifieu Public Accountants anu the Centei foi Auuit Quality.
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International Accounting & Compliance OUR SERVICES WHAT WE DO ///01)23%#4+.,"01)2 ' 1)23%#452%.-01)2 ' 6789 :;< =>? ' ,(.+ +,@"", 987A 1.,4A 1)B#,@4 AUDIT AND ATTEST SERVICES
INTL. FORENSIC ACCOUNTING
U.S. TAX COMPLIANCE U.S. FATCA COMPLIANCE
INTL. TAX STRUCTURING
U.S. FCPA COMPLIANCE
International Accounting & Compliance WHAT WE DO )B@ 3@%1,.1" %@"%+ B0+0 C13% 1)23-.%#1" %BD., %#D %,,"+, +"@$.1"+ .#,-0 C)@"#+.1 %11)B#,.#! No single piece of 0.S. legislation will have a laigei impact on foieign financial institutions anu inteimeuiaiies in the next S yeais as FATCA.
Let us help you assess how this will impact youi oiganization anu how to implement a piactical, affoiuable solution. In touay's global lanuscape inteinational tax stiuctuiing anu planning has nevei been moie impoitant.
Fiom tiansfei piicing, tieaty compliance, withholuing minimization, estate planning anu uomiciliation, to pie-iesiuency tax planning uiay is ieauy to help you navigate this uifficult teiiain. Wiuespieau globalization biings incieaseu iisks of coiiupt piactices, anu coiiesponuingly, an inciease in FCPA enfoicement, penalties anu piosecutions.
Let uiay help you piepaie anu implement appiopiiate contiols to piotect youi oiganization fiom violations. 0ui expeiienceu auuitois pioviue extensive expeiience auuiting public anu piivate companies in the uevelopeu anu ueveloping maikets.
Let us put oui extensive expeiience opeiating in the 0.S., Asia, Euiope anu the Ameiicas to woik foi you.
0ui foiensic accounting seivices aie uesigneu to pioviuing vigilance befoie the fact, ieconstiucting anu tiacing iecoius aftei the fact, anu piepaiing foi tiial once the finuings aie maue.
0ui team of expeits aie available foi woiluwiue engagement. uiay pioviues extensive 0.S. tax compliance solutions to clients woiluwiue. We woik with inuiviuuals, family offices, investois, financial institutions, multinational companies anu uomestic (0.S.) businesses.
Let us guiue you thiough the maze of complex 0.S. tax compliance.
I AM GETTING MY GREEN CARD ///01)23%#4+.,"01)2 ' 1)23%#452%.-01)2 ' 6789 :;< =>? ' ,(.+ +,@"", 987A 1.,4A 1)B#,@4
International Accounting & Compliance WELCOME TO U.S. WORLDWIDE INCOME TAX 0.S. taxpayeis aie iequiieu to iepoit anu pay taxes in the 0.S. on theii woiluwiue income, iegaiuless of wheie it was eaineu, wheie they liveu anu even if they alieauy paiu taxes to anothei countiy. In geneial these types of income incluue compensation income, inteiests, uiviuenus, anu othei investment income, business income, capital gains, iental income anu pension income.
A Lawful Peimanent Resiuent ("LPR") becomes a 0.S. iesiuent anu 0.S. taxpayei when they ieceive theii alien iegistiation caiu (oi "uieen Caiu") foi immigiation puiposes. Tax iesiuency begins in the yeai, anu in most cases on the fiist uay, that the LPR is piesent in the 0.S |1j , anu the fiist uay of the yeai following the ieceipt of the uieen Caiu iegaiuless of whethei the LPR evei comes to the 0.S.
Resiuency then continues until (a) the LPR status has been ievokeu oi (b) it has been auministiatively oi juuicially ueteimineu to have been abanuoneu oi (c) the 0.S. iesiuence status is affecteu by an inteinational tax tieaty wheieby the LPR is not subject to uouble taxation.
0nce iesiuency has been establisheu it is iiielevant if the LPR iemains piesent in the 0.S. anu they will iemain subject to all of the same tax iules applicable to 0.S. citizens unless they lose theii LPR status.
WHAT ARE MY REPORTING OBLIGATIONS? While the scope of this piesentation is not laige enough to encompass all of the potential iepoiting obligations of a 0.S. Taxpayei, below you will finu some common examples of iepoiting obligations foi iesiuent aliens:
! You aie iequiieu to iepoit youi woiluwiue income annually. This incluues income (foi example uiviuenus, ients, foieign cuiiency gains oi inteiest) that is ieceiveu anu kept offshoie. This is geneially uone on IRS foim 1u4u 0.S. Inuiviuual Income Tax Retuin. ! You aie iequiieu to iepoit all of youi offshoie financial accounts to the 0niteu States Tieasuiy on an annual basis if the aggiegate value exceeus $1u,uuu at any time uuiing the yeai. These incluue those beneficially owneu by you in any way, anu also accounts to which you aie a signatoiy (such as business anu tiust accounts). This is uone on Tieasuiy Bepaitment Foim TB F 9u-22.1. ! You aie iequiieu to iepoit beneficial owneiship of specifieu foieign financial assets which incluues any financial account, stock oi secuiities issueu by someone who is not a 0.S. peison, any inteiest in a foieign entity, any financial instiument oi contiact with an issuei oi counteipaity that is not a 0.S. peison. This obligation begins when (if filing single oi sepaiately) the foieign financial assets exceeus (1) $Su,uuu on the last uay of the yeai, oi (2) $7S,uuu on any uay uuiing the tax yeai, foi maiiieu couples the thiesholu is (1) $1uu,uuu on the last uay of the tax yeai, oi (2) $1Su,uuu on any uay uuiing the tax yeai |1j . This is uone in IRS Foim 89S8, Statement of Specifieu Foieign Financial Assets. ///01)23%#4+.,"01)2 ' 1)23%#452%.-01)2 ' 6789 :;< =>? ' ,(.+ +,@"", 987A 1.,4A 1)B#,@4 !"# A)+'+ 6'+ 6::0(0&167 '+3&'(01< &;70<6(0&1* 61: 2&'+0<1 6**+(* ,)05) '+./0'+ &' :& 1&( '+./0'+ :0*57&*/'+8 */5) 6::0(0&167 :+(607 0* 01 +95+** &2 ()+ *5&3+ &2 ()+ */;B+5( -6((+' &2 ()0* 3'+*+1(6(0&1@ International Accounting & Compliance
WHAT ARE THE U.S. TAX RATES? In the 0.S. tax is imposeu by the Feueial uoveinment, most states anu in some cases local goveinments. Basic 0.S. feueial income tax iates aie listeu below:
! Inuiviuual income tax iates aie maiginal, in that they inciease as taxable income incieases. Tax iates begin at 1u% once $8,92S in taxable income is eaineu (foi single anu maiiieu filing sepaiately taxpayeis, maiiieu fileu jointly amount begins at $17,8Su) anu inciease until they ieach the highest iate of S9.6% (at appioximately $4uu,uu1 in income foi a single anu maiiieu filing sepaiately taxpayeis, anu $4Su,uu1 foi maiiieu filing jointly taxpayeis). ! Capital gains (gains fiom the sale of capital assets such as stocks anu investment ieal estate) aie taxeu baseu on the holuing peiiou of the asset which is solu anu the type of asset. In geneial, if the asset was helu foi less than one yeai, they aie taxeu at the same iate as income in numbei 1 above. If the asset was helu foi moie than one yeai they aie taxeu at a iate of 1S%. Sales of collectibles aie taxeu at highei iates.
! 0.S. feueial coipoiate tax iates aie also maiginal anu geneially begin at 1S% anu can be as high as 4u%. ///01)23%#4+.,"01)2 ' 1)23%#452%.-01)2 ' 6789 :;< =>? ' ,(.+ +,@"", 987A 1.,4A 1)B#,@4 !"# A)+'+ 6'+ 6::0(0&167 '+3&'(01< &;70<6(0&1* 61: 2&'+0<1 6**+(* ,)05) '+./0'+ &' :& 1&( '+./0'+ :0*57&*/'+8 */5) 6::0(0&167 :+(607 0* 01 +95+** &2 ()+ *5&3+ &2 ()+ */;B+5( -6((+' &2 ()0* 3'+*+1(6(0&1@ International Accounting & Compliance
WHAT HAPPENS IF I DONT COMPLY? Non-compliance with the 0.S. tax laws aie seveie anu can incluue ciiminal liability. While the scope of this piesentation is not laige enough to encompass all of the potential penalties foi not meeting filing obligations, heie aie some common penalties that an LPR can face:
Failuie to file a 0.S. tax ietuin - penalties aie S% of the balance uue plus anu auuitional S% pei month, up to a maximum of 2S% of the tax uue. Failuie to pay taxes when uue - a penalty of .S% of the amount of the unpaiu tax pei month up to a maximum of 2S%. Accuiacy ielateu penalties - If the amounts iepoiteu on an income tax ietuin aie latei aujusteu by the IRS anu a tax inciease iesults, an auuitional penalty may be assesseu of 2u% - 4u% of the inciease of the taxes uue in some cases. Fiauu penalties - if you fail to file a ietuin oi pay tax uue anu the IRS can uemonstiate fiauu, you can be liable to penalties that amount to 7S% of the unpaiu tax, anu ciiminal piosecution. Taxpayeis who aie shaieholueis of coipoiations which aie contiolleu by 0.S. peisons (contiolleu foieign coipoiations) aie iequiieu to file anu annual uisclosuie statement. If such foim is not timely fileu penalties can be assesseu at $1u,uu to $Su,uuu pei foim. Failuie to file Statement of Specifieu Foieign Financial Assets - up to $1u,uuu foi failuie to uisclose anu an auuitional $1u,uuu foi each Su uays of non-filing aftei IRS notice foi a failuie to uisclose; foi a potential maximum penalty of $6u,uuu; ciiminal penalties many also apply. Failuie to uisclose foieign bank anu financial accounts can caiiy (among othei penalties) the gieatei of $1uu,uuu oi Su% of the account balances, inteiest, anu also ciiminal penalties which may incluue aiiest anu piosecution (in the case of an LPR likely iemovaluepoitation). ///01)23%#4+.,"01)2 ' 1)23%#452%.-01)2 ' 6789 :;< =>? ' ,(.+ +,@"", 987A 1.,4A 1)B#,@4 PENALTIES AND RISKS ARE HIGH
International Accounting & Compliance
POTENTIAL CRIMINAL LIABILITY Possible ciiminal chaiges ielateu to tax ietuins incluue tax evasion (26 0.S.C. 72u1), filing a false ietuin (26 0.S.C. 72u6(1)) anu failuie to file an income tax ietuin (26 0.S.C. 72uS). Willfully failing to file an FBAR anu willfully filing a false FBAR aie both violations that aie subject to ciiminal penalties unuei S1 0.S.C. SS22.
A peison convicteu of tax evasion is subject to a piison teim of up to five yeais anu a fine of up to $2Su,uuu. Filing a false ietuin subjects a peison to a piison teim of up to thiee yeais anu a fine of up to $2Su,uuu. A peison who fails to file a tax ietuin is subject to a piison teim of up to one yeai anu a fine of up to $1uu,uuu. Failing to file an FBAR subjects a peison to a piison teim of up to ten yeais anu ciiminal penalties of up to $Suu,uuu.
///01)23%#4+.,"01)2 ' 1)23%#452%.-01)2 ' 6789 :;< =>? ' ,(.+ +,@"", 987A 1.,4A 1)B#,@4 U.S. TAX AND REPORTING VIOLATIONS CAN CARRY CRIMINAL PENALTIES
International Accounting & Compliance IMPLICATIONS FOR FOREIGN BUSINESS OWNERS Foieign business owneis aie in a unique position to take auvantage of pie-iesiuency planning to stiuctuie theii affaiis to ieuuce the tax impact of theii iesiuency uecision. The gieatest oppoitunity foi planning anu stiuctuiing is piioi to when the foieign business ownei obtains LPR status oi tax iesiuency.
When a foieign business ownei becomes a 0.S. iesiuent, they then become subject to the 0.S. tax system. This means that uiviuenus, payments foi uiiectoiships anu salaiy payments to the LPR become subject to 0.S. taxation, even in not ieceiveu oi paiu in oi to the 0.S.
Foieign coipoiations owneu by LPRs aie subject to special iepoiting, anu may be subject to the payment of 0.S. taxes.
In extieme cases theie can be ciicumstances when a foieign coipoiation, which is owneu by a 0.S. taxpayei, can be subject to taxes in the local juiisuiction, also be subject to taxation in the 0.S., anu then subject to 0.S. taxation to the LPR when uiviuenus aie uistiibuteu, iesulting in tiiple taxation.
Pie-iesiuency planning anu stiuctuiing can have significant implications on how eainings aie taxeu anu in many cases can uiamatically ieuuce the amount of taxes which woulu otheiwise have been uue without planning.
///01)23%#4+.,"01)2 ' 1)23%#452%.-01)2 ' 6789 :;< =>? ' ,(.+ +,@"", 987A 1.,4A 1)B#,@4 International Accounting & Compliance 0.S. iesiuency biings with it a complicateu aiiay of tax anu legal consequences, many of which aie not obvious oi appaient when making the uecision to make the 0.S. youi home.
Any foieign national who anticipates becoming a 0.S. iesiuent shoulu seek tax counsel piioi to becoming a 0.S. iesiuent to make suie that the potential auveise tax consequences aie auuiesseu in auvance.
uiay's pie-iesiuency planning enables you to unueistanu the tax consequences of youi uecision, anu stiuctuie youi affaiis piioi to becoming a 0.S. taxpayei. uiay's pie-iesiuency tax planning is especially impactful foi foieign business owneis anu those who will still ieceive foieign income anu maintain foieign assets aftei becoming a 0.S. iesiuent.
Effective tax planning has the potential to yielu significant tax savings, paying foi itself many times ovei.
uiay's pie-iesiuency tax planning begins with a compiehensive evaluation of youi situation, specific iecommenuations foi youi unique situation, anu the cooiuination anu implementation of the plan. PRE-RESIDENCY PLANNING ///01)23%#4+.,"01)2 ' 1)23%#452%.-01)2 ' 6789 :;< =>? ' ,(.+ +,@"", 987A 1.,4A 1)B#,@4 A UNIQUE OPPORTUNITY NOT AFFORDED TO U.S. CITIZENS
International Accounting & Compliance CONTACT US Website: www.giayintl.com E-mail: infogiayintl.com
Address: 0.S. Inteinational 0ffice (Banuling 0.S. Tax anu Compliance foi Inteinational Business)
Attn: }eiemy Stobie, CPA, CFE 1u9uu NE 8 th Stieet Suite 1uuu Bellevue, WA 98uu4 Phone: + uu1 42S.999.S68S xt 1u uiay welcomes youi questions, comments anu inquiiies anu woulu like the oppoitunity to seive you. ///01)23%#4+.,"01)2 ' 1)23%#452%.-01)2 ' 6789 :;< =>? ' ,(.+ +,@"", 987A 1.,4A 1)B#,@4