Global Tax Preparation Services

The global network of 3,000+ bilateral tax treaties — largely based on the OECD Model Convention — reduces withholding taxes on cross-border dividends, interest, and royalties and prevents double taxation through the exemption or credit method under Articles 23A and 23B. BEPS Action 6 introduced the Principal Purpose Test through the Multilateral Instrument, modifying 1,500+ treaties to deny benefits where obtaining treaty relief was a principal purpose of an arrangement. Limitation on Benefits clauses in US and other treaties add further eligibility requirements based on ownership, base erosion payments, and derivative benefits. Treaty relief claims require certificates of tax residence, beneficial ownership declarations, and often pre-filing rulings in source countries — we prepare and file these across all relevant jurisdictions. When treaty relief is denied or a transfer pricing adjustment in one country creates double taxation, OECD Model Convention Article 25 provides for mutual agreement procedures between competent authorities, with BEPS Action 14 improving dispute resolution timelines and mandatory binding arbitration in many treaties. Residency tie-breaker rules under Article 4 resolve dual-residency situations for individuals and, under the 2017 Model Convention update, for dual-resident entities. We map treaty networks across your operating countries, model withholding tax savings, and represent clients throughout MAP proceedings until double taxation is eliminated.

Cross-border financial account reporting spans three overlapping regimes. FBAR (FinCEN Form 114) requires US persons — citizens, residents, and entities — to report foreign financial accounts when the aggregate value exceeds $10,000 at any point during the calendar year, with civil penalties up to $12,921 per non-willful violation and higher penalties for willful non-compliance. FATCA (Foreign Account Tax Compliance Act) requires foreign financial institutions to register with the IRS, obtain a GIIN, and report US account holders directly to the IRS through Form 8966 — while US taxpayers file Form 8938 reporting specified foreign financial assets above threshold amounts ($50,000–$600,000 depending on filing status and residence). CRS (Common Reporting Standard) extends automatic exchange of financial account information to 100+ jurisdictions, requiring financial institutions to identify reportable account holders through due diligence procedures and submit annual CRS reports to local tax authorities for exchange with account holders' countries of residence. Entity classification — distinguishing financial institutions from active and passive non-financial entities — determines reporting obligations for corporate groups, trusts, and investment structures. We manage the full compliance cycle across all three regimes, coordinate with custodians and banks for accurate data, and support voluntary disclosure for prior-year non-compliance to mitigate penalty exposure.

Permanent establishment under OECD Model Convention Article 5 determines whether a non-resident enterprise is taxable in a source country on business profits attributable to a fixed place of business, dependent agent, or — under many post-BEPS treaties — services performed in that country for more than 183 days. BEPS Action 7 significantly narrowed specific activity exemptions (preparatory and auxiliary activities) and expanded dependent agent PE to cover persons who habitually conclude contracts or habitually play the principal role leading to contracts. Construction PE typically arises when a building site or project exceeds 6–12 months depending on the treaty. Digital business models create PE risk through local servers, dependent agents, and increasingly through significant economic presence tests introduced by BEPS Action 1 in some jurisdictions. When PE is established, profits must be attributed on an arm's length basis under OECD Authorized Approach or the relevant bilateral treaty protocol — requiring functional analysis, asset allocation, and risk assessment specific to the PE. PE tax returns must be filed in the source country, often triggering VAT registration, payroll obligations, and transfer pricing documentation for attributed profits. Competing PE claims between source and residence countries create double taxation resolved through MAP under Article 25. We assess PE risk before market entry, monitor ongoing cross-border activities, and restructure operations — such as converting dependent agents to independent distributors — to manage exposure within treaty parameters.

International assignment tax planning must address the interaction of home country continuing tax obligations, host country source taxation, and treaty relief under OECD Model Convention Article 15 (employment income) and Article 23 (elimination of double taxation). US assignees remain subject to worldwide taxation on Form 1040 regardless of host country, while UK assignees may retain UK tax obligations depending on domicile and residency status. Treaty tie-breaker rules under Article 4 determine which country has primary taxing rights when the assignee qualifies as resident in both jurisdictions. Tax equalization policies ensure the employee pays approximately the same tax as if they had remained at home, with the employer bearing excess host-country tax — requiring hypothetical tax calculations, shadow payroll reporting in the host country, and annual settlement processes. Social security totalisation agreements between 30+ country pairs prevent dual social security contributions during assignments typically up to 5 years. FBAR reporting applies when the assignee's foreign account aggregate exceeds $10,000, and CRS in 100+ jurisdictions automatically exchanges financial account data with the home country tax authority. We model assignment costs before deployment, design equalization policies, set up compliance infrastructure, and manage ongoing filing through repatriation — integrating with Pillar Two considerations where the employer group exceeds EUR 750 million in consolidated revenue.

Foreign tax credit optimisation prevents double taxation when the same income is taxed in both the source country and the residence country. The OECD Model Convention Article 23 provides two methods: the exemption method (Article 23A) excludes foreign-source income from residence-country taxation, and the credit method (Article 23B) allows residence-country tax to be reduced by foreign tax paid. US taxpayers claim credits on Form 1116 within separate baskets — general category, passive category, GILTI, and Section 951A — each with its own limitation computed under IRC Section 904 as foreign tax paid divided by foreign-source taxable income multiplied by US tax liability. Excess credits carry forward 10 years and back 1 year, but basket limitations often strand credits when foreign tax rates exceed the US effective rate on that income category. UK residents claim credit relief under TIOPA 2010 with similar limitation mechanics. CFC inclusions under BEPS Action 3 add complexity — foreign tax paid at the subsidiary level may or may not be creditable against CFC inclusion income depending on jurisdiction-specific CFC rules and US GILTI high-tax exclusion thresholds. Pillar Two GloBE rules introduce a Qualified Domestic Minimum Top-up Tax and GloBE-specific foreign tax credit adjustments that interact with traditional FTC systems. We model credit utilisation across multi-year horizons, restructure income flows to maximise creditable foreign tax, and coordinate with treaty exemption claims where the credit method produces stranded credits.

Controlled Foreign Corporation rules attribute undistributed profits of foreign subsidiaries to parent company shareholders or parent entities in the residence country — preventing indefinite deferral of tax on income earned in low-tax jurisdictions. BEPS Action 3 strengthened CFC rules globally, requiring jurisdictions to tax CFC income unless substantive economic activity generates the profits. US CFC rules under Subpart F attribute foreign base company income (passive income, related-party sales and services) to US shareholders, while GILTI (Global Intangible Low-Taxed Income) under IRC Section 951A taxes tested income exceeding a 10% return on qualified business asset investment at an effective rate of 10.5–13.125%, with a high-tax exclusion available when foreign effective rates exceed 90% of the US corporate rate. UK CFC rules under TIOPA 2010 attribute profits of low-taxed foreign subsidiaries unless gateway exemptions apply for genuine commercial arrangements. EU ATAD requires member states to implement CFC rules attributing non-distributed income of low-taxed foreign subsidiaries where the CFC entity lacks substantive economic activity. CFC inclusions interact with foreign tax credit systems — foreign tax paid at the subsidiary level may offset CFC inclusion tax in the parent jurisdiction, subject to basket limitations and GILTI-specific credit restrictions. Pillar Two GloBE rules partially overlap with CFC regimes, as both target low-taxed foreign profits, but GloBE applies at the 15% minimum rate for groups exceeding EUR 750 million while CFC rules apply at lower revenue thresholds. We model CFC exposure across all relevant parent jurisdictions, optimise substance and profit allocation, and coordinate CFC planning with Pillar Two GloBE calculations.