Repatriation tax came into place upon the accumulated earnings of foreign entities that were generated between 1986 and 2017 and served as a mechanism to lead the United States to a new system of territorial taxation.
Since 2018, except for the exceptions contained in the Subpart F of the tax code, a resident taxpayer or citizen of the United States, will continue to be absolved of tax obligations on income generated by Controlled Foreign Corporations, such as any SA DE CV, where US Citizens or Tax Residents own, as long as these earnings are not explicitly repatriated, in presentation for example of dividends or salaries. However, new regimes and obligations have been created, such as known as GILTI TAX, which applies to foreign entities and their owners, and although the duty in most cases is to only inform, it is important that these requirements be met, in time and form to avoid penalties, interest and complications.
The obligation of the individual as long as concepts are respected, may continue to be to inform but not to pay taxes, “as it had been”. With GILTI TAX, a foreign entity in effect becomes a pass thru entity, where the profits or losses of the companies flow towards the individual income tax return of the taxpayer. Once this occurs, it may cause a tax. Fortunately, however, the government allows the crediting of taxes paid to foreign governments, and typically the case is that double taxation is eliminated when entities have already paid tax abroad. Section 962 of the Tax Code provides us with the necessary tools to in effect, eliminate this double taxation.
We have extensive experience in tax matters with international implications. Specifically, we handle issues of US Residents and Citizens with investments abroad including Mexico and South America.
American citizens who live abroad and remain with an obligation to file tax returns in the USA. We are experienced in Concepts such as Foreign Tax Credit, Non-Recognition of Foreign Income, FBAR Compliance, ITIN Acquisitions, GILTI TAX, US MEXICO Treaty,
For foreign people, with business or investments in the United States, we are also prepared. Among the featured services, preparation of 1040NR tax returns for non-residents, as well as collaboration with lawyers for assistance in Visa procedures. We also assist in the constitution and establishment of US companies, thus enabling foreign investors to operate and generate through a legal entity.