Tax aspects are crucial for any international business transaction, investment or project. Each jurisdiction features its own tax reporting and tax payment arrangements, which differ for residents and non-residents engaged in business activities in that jurisdiction. Tax arrangements tend to be highly dynamic, especially during the last years, both for reasons related to internal policies of each jurisdiction and due to international initiatives and arrangements, such as BEPS (Base Erosion and Profit Shifting) promoted by G20 and other international institutions.
Our expertise in international taxation is not limited to in-depth analysis of certain jurisdiction; we are working with multiple jurisdictions (often in cooperation with local lawyers and accountants): USA. UK. Israel, Switzerland, Ireland, Cyprus, continental Europe, Hong Kong, Singapore, Russia and others. We may be engaged to take care of specific issues of the client, or to structure the tax aspects of the future venture (transaction, investment, business, relocation, estate or cross-generation planning etc) in connection with its other aspects: financial, commercial, operational etc. Often different aspects have to be balanced between themselves, in order to achieve the optimal business results for the client.
While in the past the main goal of international tax planning has been lawfully reducing the tax rates (sometimes eliminating taxes altogether by locating business in certain offshore jurisdictions), today the changing business environment, and increased international cooperation in tax matters, as well as increased involvement of financial institutions into enforcement of tax compliance, lead to a different goal of achieving an optimal tax burden with high level of certainty and eliminating risks, taking into account compliance and reporting obligations, acceptance by banking institutions and unhindered international flow of funds (including subsequent profit distributions, estate planning, and inheritance taxes).
Our work on large-scale projects usually starts with high-level analysis of relevant tax aspects of the project as applied to the jurisdiction in which the project operates or jurisdictions of its relevant parties (beneficiaries, customers, suppliers, banks etc): we assess tax burden, withholding rates, reporting obligations (including controlled foreign companies and currency control), relative costs of performing an operation in certain jurisdictions. We recommend then a short list of potential jurisdictions, to be evaluated against commercial, financial and operating aspects. Once the client finalizes its decision as to the chosen option, the detailed planning is undertaken (often together with legal and accounting professionals in the relevant jurisdiction, who will be engaged in ongoing support of the project), followed by implementation – creating legal framework of the project, establishment of entities, tax and regulatory registrations, opening the bank accounts and provision of funding.
We have also expertise in performing due diligence of tax aspects, either as stand-alone projects or in the framework of general investment or M&A due diligence.