Overview

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This course analyzes the tax treatment, issues, planning techniques and underlying government policies involved in doing business internationally. The course incorporates concepts learned in all of the tax courses as they relate to the impact on cross-border outbound transactions (i.e., the taxation of US taxpayers doing business abroad). Topics include the source of income, transfer pricing, controlled foreign corporations (CFCs), Subpart F income, foreign tax credits, Global Intangible Low-Taxed Income (GILTI), Base Erosion and Anti-Abuse Tax (BEAT), and Foreign Derived Intangible Income (FDII). While this course focuses heavily on outbound transactions, some inbound rules (i.e., non-US taxpayers doing business in the United States) will be discussed. This course is an introductory course, so no prior knowledge of international taxation is required or expected. However, prior knowledge of U.S. federal taxation is necessary.

Syllabus

Module 1: Introduction, Jurisdictional Principles, and Sourcing

In this module, you will first become familiar with the course, your instructor, your classmates, and the learning environment. This orientation will also help you develop the technical skills needed to navigate and succeed in the course. We will then begin our discussion of U.S. international taxation by introducing the baseline theories used to prevent or mitigate international double taxation and the jurisdictional principles countries use to tax cross-border income. From there, we will discuss when an individual is treated as a U.S. resident or nonresident for tax purposes, the general system of worldwide taxation used by the United States, and major exceptions to that system. We will conclude by examining how income is “sourced” to either the United States or a foreign jurisdiction under U.S. sourcing rules.

Module 2: Inbound Taxation, Treaties, Transfer Pricing, and Export Incentives

In this module we will start with a basic introduction to inbound taxation issues, including a discussion of the Fixed, Determinable, Annual, and Periodical (FDAP) Income and Effectively Connected Income (ECI) taxing regimes. We'll then discuss the branch profits tax, which supports the ECI taxing regime. Next, we'll turn to understanding how tax treaties impact existing international taxation rules. Then, we'll cover transfer pricing issues, including a discussion of the new Base Erosion and Anti-Abuse Tax (BEAT). We'll conclude with a discussion of export incentives available to U.S. taxpayers selling abroad.

Module 3: Controlled Foreign Corporations and Current Income Inclusions

In this module we will be introduced to the Subpart F and Global Intangible Low Taxed Income (GILTI) regimes. These taxing regimes will cause certain foreign income earned by U.S. Shareholders through Controlled Foreign Corporations (CFCs) to be currently taxable in the United States. Specifically in this module we will learn to identify when a U.S. person is a U.S. Shareholder and when a foreign corporation is a CFC. We will also learn about what types of income constitute Subpart F. And, how GILTI is computed. We will conclude with a discussion of the Passive Foreign Investment Company (PFIC) rules which cover U.S. persons investing in foreign corporations that are not CFCs.

Module 4: The Foreign Tax Credit

In this module we will learn about how the Foreign Tax Credit mitigates the possibility of international double taxation. We will learn which foreign taxes are creditable for the purposes of this tax. We will then turn to computing the Foreign Tax Credit Limitation, which ensures that foreign taxes paid or accrued are only used to offset U.S taxes on foreign income and not U.S. taxes on U.S.-sourced income. We will then discuss how the Foreign Tax Credit interacts with provisions we have already discussed (e.g., GILTI). We will conclude with a brief discussion of the Check-the-Box Rules and how they impact international tax planning.