Browse Articles:   By Category   /   By Author
HIDE

Other Publications

Insights

Publications

Unravelling of the Matryoshka Doll – Impact of the C.T.A. on entities having nexus to the U.S.

/
Unravelling of the Matryoshka Doll – Impact of the C.T.A. on entities having nexus to the U.S.

Aimed at curbing money laundering, terrorism financing, and other nefarious activity, Congress enacted the Corporate Transparency Act (“C.T.A.”) on January 1, 2021. However, the C.T.A. became fully effective from January 1, 2024. It now requires certain domestic and foreign entities to disclose to the Financial Crimes Enforcement Network (“FinCEN”), a division of the U.S. Treasury Department, the identity of their beneficial owners and control persons. A failure to do so can attract heavy penalties. The targets of the C.T.A. are much like Matryoshka dolls, having many layers between what appears on the surface and what exists at the heart. Neha Rastogi and Stanley C. Ruchelman guide the reader through the in’s and out’s of what is likely the most invasive legislation enacted by Congress.

Read More

Italy: New Clarifications Concerning the Taxation of Trusts and Beneficiaries

/
Italy: New Clarifications Concerning the Taxation of Trusts and Beneficiaries

Tax authorities in much of Europe look at trusts as a tax gimmick used by the wealthy as a tool to dodge taxes. However, trusts are commonly used as a tool in estate and succession planning in connection with generational transfers of family assets and businesses, the achievement of charitable purposes, and the protection of vulnerable individuals. In this context, the Italian tax authorities released Circular Letter No. 34/E in October, providing guidance on several key issues surrounding trusts. It provides many important clarifications making trusts more attractive for individuals resident in Italy and international families having one or more beneficiaries resident in Italy or wishing to relocate to Italy. Andrea Tavecchio, the Founder and Senior Partner of Tavecchio & Associati, Tax Advisers, Milan, and Riccardo Barone, a Partner at the same firm, explain how Italian tax authorities will treat various types of trusts in a logical way.

Read More

F.B.A.R.’s — What You Need to Know

/
F.B.A.R.’s — What You Need to Know

April 15 is almost here, and while most people know this date as the filing deadline for individual tax returns, it is important to another filing requirement: the Report of Foreign Bank and Financial Accounts (“F.B.A.R.”).  Although the form has been around since the 1970’s, many people continue to profess ignorance of  its existence.  Others are simply confused about the requirements.  A recent Federal case illustrates the perils of failing to file a required F.B.A.R.  Rusudan Shervashidze and Nina Krauthamer explain that penalties are high, and courts are skeptical about claims of ignorance of the law, especially when taxpayers have accumulated several million dollars placed in an offshore account.

Read More

The U.K. Trust Registration Service: Impact for Trustees

/
The U.K. Trust Registration Service: Impact for Trustees

The past few years have seen a steep increase in trust reporting obligations in the context of F.A.T.C.A. and the Common Reporting Standard.  Trustees must come to grips with a new set of record keeping and disclosure obligations introduced by the U.K. Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, which came into force from June 26, 2017.  Jennifer Smithson and Isobel Morton of Macfarlanes LLP, London, explain the wide-ranging effect of the regulations and the dividing line between non-U.K. trustees that fall inside the regime and those who are outside.

Read More

The New Transparency Register in Germany

/
The New Transparency Register in Germany

October 1, 2017, was the due date for entering information on Germany’s beneficial owner registry.  The register brings transparency to all sorts of entities, including private law foundations and trusts, as data will be open to public inspection from December 27, 2017.  Dr. Andreas Richter of P+P Pöllath + Partners, Berlin, sheds light on the registration requirements.

Read More

LB&I Audit Insights: Using a Code §6038A Summons When a U.S. Corporation is 25% Foreign Owned

/
LB&I Audit Insights: Using a Code §6038A Summons When a U.S. Corporation is 25% Foreign Owned

Code §6038A provides that a U.S. corporation that is 25% or more foreign-owned must provide the I.R.S. with information on certain transactions with its 25% foreign owner and any other foreign related party.  The goal is to obtain access to documents that are helpful in determining the correctness of the U.S. tax return.  In an I.P.U., LB&I explains how it plans to obtain documents held outside the U.S.  This may include a requested exchange under a tax information exchange agreement or a summons served on a domestic agent appointed to receive a summons that is enforceable abroad.  Galia Antebi and Stanley C. Ruchelman explain the process that will be followed by the I.R.S.

Read More

Looking to the Future: European Efforts Against Tax Evasion Take Center Stage – Where Will It Take Us?

/

A globalized economy has been the driving force behind cross-border tax transparency and increased dissemination of tax information in recent years.  The importance of F.A.T.C.A. reporting has paled as the O.E.C.D. Common Reporting Standard has taken effect in the E.U., State Aid cases are progressing, and country-by-country reports may be publicly available.  Europe and the U.S. are moving in different directions.  Philip R. Hirschfeld and Stanley C. Ruchelman explain.

Read More

Proposed Reporting Requirements for Foreign-Owned U.S. Disregarded Entities

/

Recently-proposed regulations will require information reporting for single member L.L.C.’s that are owned by non-U.S. persons and treated as disregarded entities. Typically, this structure is used for the acquisition of an apartment by camera-shy, high net worth individuals and offshore trading companies wishing to appear as U.S. persons. The regulations are designed to supply the I.R.S. with information about the operations and ownership so that information may be exchanged with tax treaty partner jurisdictions. Philip R. Hirschfeld and Nina Krauthamer examine the proposed reporting rules.

Read More

Insights Vol. 3 No. 4: F.A.T.C.A. 24/7

/

This month, Galia Antebi and Philip R. Hirschfeld discuss (i) the growing list of countries with which the I.R.S. will exchange F.A.T.C.A. information, (ii) the litigation in Canada attempting to block F.A.T.C.A. exchanges with U.S., (iii) recent developments in acceptably encryption for F.A.T.C.A. exchanges, (iv) additional competent authority agreements, and (iv) an updated list of I.G.A. partner countries.

Read More

Foreign Owned, Single-Member L.L.C.’s: Proposed Regulations Imminent?

/

The offshore community often accuses the I.R.S. of having insufficient U.B.O. reporting for offshore companies forming single-member L.L.C.’s that serve as U.S. fronts for global business. The L.L.C. conducts business, but the I.R.S. treats the taxpayer as foreign. If no effectively connected income is generated, no U.S. tax returns are filed.  The I.R.S. announced that information reporting will be required, much like partnership reporting by U.S. partnerships not having U.S. members or U.S. effectively connected income. Galia Antebi and Rusudan Shervashidze explain.

Read More

Insights Vol. 3 No. 3: F.A.T.C.A. 24/7

/

This month, Galia Antebi and Philip R. Hirschfeld discuss (i) changes to F.A.T.C.A. regulations designed to ease burdens on F.F.I.’s; (ii) continued I.R.S. interest in public comments; (iii) finalization of domestic entity reporting regulations under Code §6038D; (iv) an exemption from F.A.T.C.A. for a Swiss attorney’s confidential client escrow accounts; (v) competent authority agreements that have been reached with Brazil, Colombia, and Italy; and (vi) an updated list of I.G.A. partner countries.

Read More

What is the Future for New Immigrant Benefits?

/

Continuing our series on favorable tax rules for non-domiciled resident individuals, Guy Katz and Danielle Halimi of Herzog Fox and Neeman in Tel Aviv explain the Israeli tax benefits for those individuals who are categorized as “New Immigrants.” Benefits begin with a ten-year exemption for foreign-source income and gains – the exemption applies to both tax and information reporting. Regular returning residents receive generous but scaled back benefits. Remittances from abroad are not penalized with tax.

Read More