The 3 Most Significant Tax Matters for Multinationals in 2014

What is the most significant tax consideration facing multinationals in 2014? That’s the question we recently put to leading tax advisors, asking for their quick take on the matter as we launch our new Need to Know series of expert, need-to-know insights by professionals for professionals. Here is what we heard back. Any surprises in the mix?

1. Foreign Account Tax Compliance Act


From Stephanie Chapman, CPA, manager in the Tax & Small Business department of Belfint, Lyons & Shuman, PA: “Without a doubt, in the coming year foreign asset disclosure should be at the top of all multinationals minds. In June, Foreign Financial Institutions of countries that have signed Intergovernmental Agreements with the US are to all be registered under FATCA (Foreign Account Tax Compliance Act). This initiative is meant to increase global tax transparency through data sharing, which means assets that may have escaped attention in the past will likely squeeze past no longer. Further, all FBAR forms (former TD F 90-22.1, now known as the FinCen 114), must be e-filed, still by the June 30 deadline date. Penalties for noncompliance are very steep and with the ever-increasing revenues from the Voluntary Disclosure programs (OVDP), attention from tax authorities stays piqued. Inbound and outbound investors alike will need to seek expert guidance regarding their exposure to disclosure requirements of any of their foreign financial assets.”

2. Transfer Pricing

From Ray Polantz, CPA, MT, director of Tax Planning & Compliance at Cohen & Company: “Transfer pricing will continue to be a paramount issue for large multinational corporations. However,  global companies in the middle market face unique considerations. The number one issue these companies will need to address continues to be the efficient repatriation of foreign profits. The overall repatriation strategy can determine how a company’s profits will ultimately be taxed in the U.S. and can make a significant impact on a company’s bottom line.”

3. Reporting Obligations

From Dan Lynn, CPA, partner at Beene Garter LLP: “In the U.S., the failure to understand reporting obligations can subject a company to significant penalties. Expansion planning is key and should include tax advisors in both the U.S. and the respective foreign jurisdiction. Depending on the level of anticipated activity in foreign jurisdictions, proper structuring of foreign operations can play an important role in alleviating some of those costs and administrative burdens.”

For additional perspectives on these three matters, also see:

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[Stay tuned for additional professional insights in JD Supra's Need to Know series. Send writing queries to news@jdsupra.com]

Topics:  Corporate Taxes, FATCA, FBAR, IRS, Need to Know, OVDP, Reporting Requirements, Transfer Pricing

Published In: Business Organization Updates, International Trade Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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