Are You Taking Your Business Internationally?
If you have your heart set on global success, it is crucial to think about the international market. Though similar to a domestic company in many ways, an international business has different needs and considerations when it comes to taxes, bookkeeping and other economic necessities. For example, every country has its own money and a different currency exchange rate. A small mistake in converting currencies could have significant results on your bottom line.
Additionally, some countries will require you to register for vendor codes or acquire permits before importing products into the country. There are even times when the process of obtaining these registrations can be lengthy or difficult depending on which country is being dealt with. Avoiding these issues is a lot easier when you have a strong tax accounting team in your corner. In the U.S., there are CPAs and tax attorneys who specialize in international business, allowing them to help small businesses when it comes to the additional challenges that come with selling products internationally. These highly skilled professionals can also help businesses with international investors, accounting for foreign income and expenses, as well as helping you comply with international laws and regulations that are specific to your industry.
But what about taxes? Though many assume that income earned abroad is taxed twice – once at the U.S. federal level and again at the foreign country's tax level – this is untrue in certain instances. Foreign investors can be exempt from U.S. taxes, while U.S. citizens abroad are tax residents of both their home country and the U.S. For business owners who make money in the U.S. and in other countries, a global tax strategy is a must-have to prevent double taxation and unwanted penalties or fines on capital gains taxes.
So what exactly is required to take your business international? Consult with an expert when it comes to getting your business ready for the international market and its challenges so that you can begin to reach markets around the world without hesitation or worry about legal compliance issues.
By Jessica Peralta in Taxes , 18 Jul 2016
Title: 5 Things to Know About the Virtual Currency Exception in the New York BitLicense Proposal
Image: Canstockphoto [ARTICLE START] The Department of Financial Services has released a revised version of the BitLicense proposal. This new iteration is being packaged alongside a draft for the proposed Cryptocurrency Business Regulation Act (CBRA). The proposed CBRA would amend current state law related to virtual currencies, and would make New York a welcoming home for new innovations. While there are many notable changes in the new proposal, we wanted to highlight five things that you should know about how virtual currencies fit into the overall regulatory structure. 1. Virtual Currency Exemptions A few notable changes have been made in the choice of exemptions. For instance, the virtual currency transaction reporting rule has been significantly revised to ensure that virtual currency consumers are not adversely impacted by a requirement to report transactions as opposed to non-virtual currency users. The exemption for exchanges and custodial wallets has been preserved, but narrowed somewhat. The CBRA's draft would require virtual currency exchanges (and wallet providers) to verify that their customers are registered in New York before providing access to consumers' virtual currencies. The new BitLicense proposal narrows this exemption considerably by allowing only exchanges with employees or offices within New York state to qualify for an exemption. 2. Certain Activities Not Allowed While the CBRA's draft would allow virtual currency businesses to engage in a range of activities, some activities are not permitted. Gambling and money transmission are excluded from the range of permissible activities. The proposal provides a carve out for decentralized virtual currency systems that provide a platform for betting on games of skill rather than games of chance -- such as in-game betting on video games and esports. 3. Prohibitions on Customer Relationships Virtual currency businesses would be prohibited from engaging in customer relationships. For example, customer acquisitions and relationships must be made with an explicit contractual relationship with the individual or entity purchasing digital currency or another asset for their own account. 4. Protection for Small Firms In addition to the protections specified in the CBRA and BitLicense proposal, there are also additional steps that can help protect small businesses from potential overreach: (1) ensuring that virtual currency business are properly classified as financial services companies under New York State law; and (2) further exempting virtual currency businesses from having to obtain a license if they do not engage in "covered activities." Specifically, the CBRA's draft would provide an exemption for digital currency business with fewer than 10 employees or an annual gross revenue of less than $500,000 that do not engage in "covered activities" providing a platform for gaming of chance. This exemption is clearly tailored for smaller virtual currency businesses. 5. Additional Clarifications and Other Changes The BitLicense proposal makes a number of other changes. In addition to the changes noted above, the proposal also clarifies that virtual currency businesses can exchange one type of virtual currency for another and to issue virtual currency as payment for goods. As expected, there are still many questions about how the BitLicense proposal would affect small business owners who are not engaged in "covered activities." We encourage you to read through the revised draft and submit your comments by September 27th on any unresolved issues.
By Jessica Peralta in Taxes , 22 May 2016
Title: As the IRS Moves Forward, So Do Companies Seeking Help for Cryptocurrency Tax Compliance
Image: Pixabay [ARTICLE START] There is a growing need for tax professionals with expertise in cryptocurrency to help their clients prepare for the current stage of awareness among taxpayers and the IRS. The IRS has recently published guidance on virtual currency transactions that provide some direction but leave many questions unanswered. With so much uncertainty surrounding the subject, it is important that companies are proactive, and seek out experts who can help them comply with federal tax laws. In addition, federal tax compliance is evolving. At the same time the IRS is moving forward with new regulations and guidance on virtual currency transactions, it has also moved to improve its service to taxpayers.
By Jessica Peralta in Taxes , 18 May 2016
Title: What Taxpayers Need to Know About New Regulations from the EPA Under the Clean Water Act
Image: Pixabay [ARTICLE START] The Environmental Protection Agency (EPA) has recently published new regulations that affect companies that engage in regulated wastewater discharges. These regulations are meant to maintain the quality of the nation's waters and provide protection for water resources.
Conclusion
By Jessica Peralta in Taxes , 17 May 2016
Title: A New Year Brings New Tax Trends, and Old Ones Reemerge
Image: Pixabay [ARTICLE START] As we head into a new year, there are several things to keep in mind when it comes to tax planning. New tax laws have already taken effect, but the IRS is working to implement an even more expansive overhaul of the Code. Meanwhile, coming changes to the estate and gift tax provisions could impact a significant number of taxpayers. Other potential trends include the potential for additional taxes on cryptocurrency transactions by both federal and state governments. In this week's edition of Tax Notes Today we discuss each of these topics in more detail.