Tag Archives: PFIC

FATCA – Pre-Immigration Planning

April 16, 2013  |   Posted by :   |   FATCA/FBAR   |   0 Comments

Under the Foreign Account Tax Compliance Act (“FATCA”), effective 1/1/14, Foreign Financial Institutions (“FFI”) must withhold 30% tax on U.S. source “withholdable payments” (and “pass-through payments’) including: 1. U.S. Source FDAP Income: including portfolio interest; 2. Gross proceeds from U.S. securities. To avoid the withholding tax the foreign financial institution either has an agreement with […]

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FATCA – Information Reporting for Passive Foreign Investment Companies

January 02, 2013  |   Posted by :   |   FATCA/FBAR   |   0 Comments

U.S. shareholders of passive foreign investment companies (PFICs) must file an annual information return containing information required by the IRS. A U.S. Person who is a PFIC shareholder must file IRS Form 8621, Return by a Shareholder of a Passive Foreign Investment Company or Qualifying Electing Fund, for each tax year in which that person: […]

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FATCA – Summary of HIRE and Foreign Account Tax Compliance Act

December 28, 2012  |   Posted by :   |   FATCA/FBAR   |   0 Comments

On March 18, 2010, President Obama signed the Hiring Incentives to Restore Employment (“HIRE”) Act (P.L. 111-147) (The “Act”) which included the Foreign Account Tax Compliance Act containing new foreign account tax compliance rules. Under the Act, new reporting and disclosure requirements for foreign assets will  be phased in between 2010 – 2013: 1. Foreign […]

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Tax Compliance – CFC/PFIC

December 20, 2012  |   Posted by :   |   International Tax Planning   |   0 Comments

The Internal Revenue Code limits tax-deferral on foreign-based income realized by U.S. shareholders of foreign corporations. Undistributed foreign corporation income is taxed either annually, or upon investment sale. There are two primary anti-tax deferral regimes: Controlled Foreign Corporation (“CFC”) and Passive Foreign Investment Company (“PFIC”) (I) Controlled Foreign Corporation (“CFC”) Annual Tax U.S. shareholder pays […]

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