4 pages/≈1100 words
Accounting, Finance, SPSS
International Tax Research and Planning 2 (Research Paper Sample)
You are a CPA working as a tax professional. A foreign client engages you to determine how best for them to invest in a US start-up company that plans to sell automobile parts. The client's objective is to avoid or minimize any US taxes that the foreign investor may incur. 1. determine at least three (3) types of investments in the US company that will most likely trigger a taxable event for your client an those that are least likely. Provide support for your rationale. 2. Evaluate at least three (3) types of US-sourced income that your client should is most likely to be impacted by US taxes. Provide support for the evalution 3. Recommend the most advantageous type of investment strategy that your client should take when investing in this US company and make recommendations for avoiding or eliminating taxes on the clients US sourced income from the investment. Support the recommendations with examples. source..
International Tax Research and Planning Name: Course: Date: International Tax Research and Planning Investments in the general automobile industry by foreigners have increased in recent times. Companies dealing in automobile parts rely broadly on the manufacture of new vehicles in the industry. Automobile parts manufacture and supply go hand in hand with the vehicles manufactured meaning that, as more vehicles are manufactured, more the automobile companies thrive. However, for a foreigner to invest in a U.S company, there are procedures and ways in which they can make the investment. Investment in a foreign country’s company is referred to foreign direct investment (FDI). There are different types of direct foreign investment with each determined by the motive behind the investment and the manner in which the investment is made. The United States economy is open and has limited regulations against foreign investment into the country (Harford, 2004). In any investment, there are tax regulations that govern each sector of the economy and differ according to the investment. The various forms of foreign direct investment range from mergers and reinvesting of profits to complete acquisitions. The first type of investment that the client can engage in is through a joint venture. In joint ventures, two companies or individuals agree to use joint resources to start a business activity. Joint ventures undertaken in foreign markets usually attract high taxation with the company taxed as a local company. In such a joint venture, the foreign investor is subject to estate taxes that are additions to other statutory taxes. The other type of investment a foreigner investor can opt for is through mergers and acquisitions (Blinder, 2006). A foreign investor can merge with an already existing automobile parts dealer or acquire such a business through buying it out. Mergers and acquisitions attract a taxable event though not as high as those attributed to joint ventures. The...
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