Published on: January 9, 2018 Last modified: February 12, 2019

The New Tax Legislation and Offshore Assets

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    On behalf of Silver Tax Group posted in Offshore Accounts on Tuesday, January 9, 2018.

    The tax bill is now law. While there will be debates about the merits of the new legislation, Michigan residents will have to abide by its language until another tax bill replaces it.

    The specifics of the bill will be of particular importance to those wishing to protect their offshore assets. Those having more than $10,000 in offshore investments have long received attention from the IRS. When these assets remain undeclared, taxpayers may then face bank levees, wage garnishments, asset seizure and even jai time.

    How the new law impacts offshore business operations

    There are two specific items in the new tax bill directed at those with offshore assets. This includes:

    • A minimum tax. Though it appears that the United States plans on moving away from taxing profits made in foreign countries, the new bill still requires those making the profits to still pay 10 percent on the profits in some manner. Such a tax may be an incentive to keep those doing business abroad from making foreign investments.
    • A base erosion and avoidance tax (BEAT). The intention of such a tax was to reduce or eliminate efforts to deduct payments made to foreign entities. This is especially applicable to “intrafirm transactions.”

    What the government is hoping to do is to bring profits back to the U.S. The government even hopes to provide export subsidies to incentivize production on American soil rather than in other parts of the world.

    The continued complexities of the tax code

    Even only trying to explain how the tax bill impacts global trade is in itself an extremely complicated tax. While every administration makes promises of simplifying the tax code, it is obvious this is never a simple undertaking. It may take the services of an experienced tax attorney to understand the implications of any new legislation. This includes explaining any unintended consequences.

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