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Spring is in the air! The sun is coming out more often, and we’re looking forward to a new season of in-person events. This time in our bi-monthly digital business update, we have collected interesting topics relevant to your U.S. subsidiary, such as information about taxes, legislation, HR matters, and interesting events where you can meet us. We also like to take the opportunity to spotlight our valued team member Melissa Suijkens, Sr. Bookkeeping Consultant. Unfortunately, due to global inflation, we are forced to make a price adjustment to some of our services; information on that is further in this newsletter.

On behalf of the entire TABS Team,
Jacob Willemsen

Deadline Corporate Income Tax 2022

Corporate Income tax filings are due April 18th for C-corporations. TABS reached out to all clients earlier this year to offer assistance with these filings. Currently, TABS can only support customers who have already responded to our emails or have approached us.

We advise contacting a Certified Public Accountant as soon as possible to assist you with this filing to at least get your extension filed on time.

The request for an extension must be filed by the original deadline latest and must include payment of any tax liabilities. The request will be deemed invalid retroactively if it later turns out that the tax liability was not paid at least 90% by the original deadline (April 18). This can result in significant penalties, especially if there were intercompany transactions with related parties (i.e., parent).

Please review your bank accounts to confirm that all expected tax payments have been processed for corporate income tax (FY 2022). Some banks require additional verification before tax payments are cleared. If you expect a profit for FY 2023, you could avoid penalties and interest by making prepayments on your federal income tax and some state income tax.

Requirement to File Form 5471 with Corporate Income Tax

An unintended consequence of the Tax Cuts and Jobs Act passed during the Trump Presidency is that far more tax filers are now required to file Form 5471; this includes nearly all of TABS’s clients with overseas parents.
In an effort to provide explanations and examples, The Internal Revenue Service Large Business & International Concept Unit published IRC 958 Rules for Determining Stock Ownership – Ownership Attribution Issue (latest version 8 August 2022), showing how upward and downward attributions create constructive ownership requiring the filing of Form 5471 – even for wholly owned subsidiaries of a foreign parent.
Importantly, failure to file a Form 5471 may result in penalties equal to $10,000 for each foreign corporation which could become quite costly.

Consequence of Payrolling in the United States with a Foreign Entity

When a foreign entity wishes to enter the U.S. market, a major factor it may need to consider involves hiring U.S. employees. This may seem like a daunting and overwhelming prospect, and in an effort to ‘simplify’ the matter and ‘reduce costs,’ some foreign entities may decide to payroll themselves directly (i.e., using the foreign entity as the employer) or contract with and use a professional employer organization (a “PEO). In fact, some global PEOs are marketing heavily and offering services at what may appear to be ‘too good to be true’ rates. Beware, as they may just be!

Here are some things to consider when reviewing whether to employ via a foreign entity and/or use a global PEO.

New York State to Require Electronic Workplace Posters

Acknowledging that more employees are working from home and away from their physical workplace, New York State now requires employers of all sizes to make mandatory workplace posters available to employees electronically, either on their website or by email, in addition to posting physical copies in the workplace. This requirement applies to all workplace postings required under state or federal law. Employers must also notify employees that the postings are available electronically. Are you a New York state employer? Read the complete article on our website.

New Pricing Effective 1 July 2023 for Existing Services

We appreciate our clients and thank you for your continued patronage. Due to global inflation, we are forced to make pricing adjustments to some of our services. The price increases went into effect for new clients (and for existing clients adding services) per 1 January 2023.  For existing clients, these adjustments will take effect on or after 1 July 2023 – for example, for our Corporate Governance clients, the increases will only take effect upon the anniversary date after 30 June 2023 meaning that we will honor the exiting hourly rate until the date of your next anniversary.
We have provided notification of these increases to each of our clients via email and by adding a notice in the mail folder of our Sharefile platform in late March. It was difficult to make the decision to increase our prices as we understand the effect such a price increase can have on our customers while they’re starting their business in the United States. We seek to continue delivering the highest quality services to our customers, and we thank you for your understanding and continued support during this change. Please contact us with any questions, comments, or concerns.

Podcast – The U.S. Expansion Series

TABS recently launched The Expansion Series podcast on how to expand your business to the U.S. market successfully. This first season hosts Fleur & Flora of TABS discuss the legal landscape, the risk of liabilities, pitching to US investors, and the expansion journeys of Tony Chocolonely, and ChannelEngine. This podcast aims to provide companies with the tools and guidance for those interested in expanding to the U.S. market.

In addition, TABS sponsored the 3rd season of the award-winning podcast De Oversteek (Dutch for The Crossing). Jacob Willemsen can be heard in the broadcasts.

Private Office Suites Available for Rent

TABS has expanded its offices in New York City and Houston. At both locations, private office suites are available from 2 – 6 persons and starting at $1000 per month. Interested?
Meet us at the following events in the Netherlands and the U.S. in May.

Impact of IRA on U.S. Market Expansion of European Companies

Tuesday, April 25th, 5.30-8.00 pm EST, Flanders House, NYC

The European Chamber of Commerce New York invited a panel to share insights about opportunities and challenges in U.S. market expansion of European companies in the era of IRA and the CHIPS Act. The CHIPS Act and the Inflation Reduction Act (IRA) are going to stimulate investment and may attract capital into the USA. Every company that is remotely connected to either the semi-conductor or green energy sectors has been looking for ways to take advantage of the billions of dollars of incentives and subsidies that have been made available. This is a good time for European companies to reconsider entering the US Market either directly or via a partnership with a US company. Jacob Willemsen is one of the speakers.

SelectUSA Investment Summit

May 1-4, Washington DC, USA

Is your company growing in the United States ? Want to learn all about the Inflation Reduction Act (IRA), U.S. Incentive programs, CHIPS act, U.S. expansion, visa, supply chain, and more? Get your information directly from the U.S. Federal and State Government at the 2023 SelectUSA Investment Summit in Washington, DC, from May 1-4. Special track and discount available for startups, including access to VC.

The Select USA Investment Summit is the TOP EVENT in the United States for FDI promotion, connecting investors, companies, economic development organizations and industry experts to seize every opportunity available to make investment deals happen through U.S. investment.

TABS is excited to be attending the #SelectUSAsummit in Washington DC in May, and we are looking forward to connecting with you there!

𝗗𝗼𝗶𝗻𝗴 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗶𝗻 𝘁𝗵𝗲 𝗨.𝗦.: 𝗢𝗽𝗽𝗼𝗿𝘁𝘂𝗻𝗶𝘁𝗶𝗲𝘀 𝗮𝗻𝗱 𝗣𝗶𝘁𝗳𝗮𝗹𝗹𝘀

Tuesday, May 9th, 3.30-5.30 pm CET, Breukelen – the Netherlands

The workshop aims to provide ICT entrepreneurs, with a legal framework within which business is conducted in the United States. This allows you to make a better assessment of the actual risks, to which you can adjust your commercial strategy if necessary.

Please note that this seminar is entirely aimed at, and is only intended for, ICT / IT companies that (want to) do business in the United States. Admission is free, the number of places is limited…

USA Update – How to Build and Expand a Team in the U.S.

Wednesday, May 10th, 3-6 pm, Utrecht – the Netherlands

On Wednesday, May 10, Rabobank, TABS Inc., and Wuersch & Gering LLP, for the ninth time, the USA Update. This time the USA Update focuses on developments in the labor market, and you, as an entrepreneur, will receive information about the best ways to build and expand a team in the US. Various relevant speakers once again share their visions and experiences.

If you are interested in attending this event, we welcome you to send us an email. There is a limited number of spaces available for each co-organizer.

Meet Melissa Suijkens, Sr. Bookkeeping Consultant

Melissa has been with TABS since February 2015. She was born and raised in the Netherlands, where she graduated from Breda University of Applied Sciences cum laude with a Bachelor’s Degree in Business Administration. During her studies, she completed an internship in the hospitality and event management industry in Orlando, FL. After completing her internship and graduating, Melissa took a leap of faith and moved to Florida with her Dutch husband.

Working at TABS allows me to use my Dutch background daily to assist our European clients with their bookkeeping needs in the U.S. What I enjoy most is our very diverse clientele, from advertisement companies to companies that sell baby products to hair salons and companies that sell Christmas ornaments. I strive to assist our clients in every way I can and live each day by my work motto: “How can I help?”

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