We can assist you with strategies to repatriate earnings to the U.S. in a tax efficient manner. This involves the use of planning techniques to minimize the incremental U.S. tax cost of repatriating earnings as well as minimizing foreign tax costs (e.g., withholding taxes) that could arise. We can also assist with strategies to assist with the repatriation of earnings that may be prevented by foreign corporate law issues (e.g., lack of distributable reserves shown on local country statutory accounts) through alternative means such as affirmative use of Sections 304 and 1248 that in legal form involve sales of shares but from a U.S. federal income tax perspective create dividends.
Repatriation planning often involves understanding a company's tax attributes such as earnings and profits ("E&P"), tax basis and previously taxed income ("PTI") (i.e., income that has already been subject to tax in the U.S. under the U.S. anti-deferral rules). Many other aspects of the U.S. international tax rules, such as the consequences of certain M&A transactions, are also dependent on tax attributes. We can assist you with analyzing the status of your tax attributes through E&P and basis studies for your foreign operations.