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Welcome to the June edition of the TABS business update. As we move into the second quarter, this issue is packed with valuable insights and guidance to ensure your U.S. subsidiary thrives in the dynamic American market. This month, we bring you important HR- and Tax updates, events, and much more. Looking ahead, we’re excited about the opportunities 2024 brings and are committed to supporting your success in this ever-evolving landscape.

On behalf of the entire TABS Team,
Jacob Willemsen

Tax Update: Did You Know That…?
When Your Foreign Entity Should Do a ‘Protective Filing 1120F’ in the U.S.

Many European companies operating in the U.S. underestimate their tax presence and its impact on Corporate Income Tax. If these companies have a nexus in the U.S., their Corporate Income Tax filing (1120F) is due by June 15. Often, European firms conduct U.S. business remotely to avoid the complexities of having a U.S. subsidiary. However, with increased AI and data exchanges between international tax authorities, U.S. tax authorities are scrutinizing these practices more closely.

European companies must be aware of potential tax obligations and consider filing Form 1120-F to claim deductions and avoid penalties if later found to owe U.S. taxes. Filing this form is crucial to preserve the right to deductions and to manage audit risks. Not filing can lead to significant tax consequences, especially if U.S. clients require W8BEN-E forms, indicating the European entity’s tax status and claiming treaty benefits to prevent double taxation.

To avoid tax issues, European companies should consider a “protective filing” of Form 1120-F to ensure they can deduct business expenses and comply with U.S. tax laws. This strategy helps manage potential tax liabilities and audit risks while maintaining compliance with international tax regulations.

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Tax Update: Will the IRS start responding to abatement requests for incorrectly assessing penalties for not (or late) filing forms 5471

On May 3, 2024, the DC Circuit ruled that the IRS has the statutory authority to assess penalties for willful failure to file Form 5471, reversing an earlier Tax Court decision. This form, required from U.S. persons (including citizens, residents, and entities) with interests in certain foreign corporations, is crucial for U.S. Corporate Income Tax filings, particularly for U.S. subsidiaries of European entities. Many subsidiaries were penalized $10,000 per instance in FY2022 for allegedly failing to file Form 5471 on time. Despite timely filings, taxpayers faced delayed responses to their abatement requests from the IRS, which awaited this ruling. With the DC Circuit’s decision, it is now even more critical for these subsidiaries to ensure timely filing of Form 5471. For further inquiries, please contact us.
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HR Update: New FLSA Salary Thresholds for Exempt Employees Starting July 2024

The Department of Labor (DOL) has released a final ruling that will increase the salary threshold for exempt employees under the Fair Labor Standards Act (FLSA). Currently, the salary threshold for executive, administrative, and professional employees is set at $684 per week, or $35,568 annually. Effective July 1, 2024, this threshold will rise to $844 per week, or $43,888 per year. Additionally, the threshold is scheduled to increase again in January 2025.


What Does This Mean for You?
These changes may require you to pay overtime wages to employees who were previously exempt, among other FLSA regulations. It’s important to note that salary alone does not determine exemption status under the FLSA. Other criteria must also be met to classify an employee as exempt.


Are You Currently in Compliance with FLSA?
To ensure compliance with the updated FLSA regulations, it is crucial to review your current employee classifications and pay structures. For more information on the FLSA, potential compliance issues, and to conduct a review of your current practices, contact our HR department.
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HR Update: USCIS Increases Automatic Extension of Certain EADs to Improve Access to Work Permits

U.S. Citizenship and Immigration Services (USCIS) has announced an automatic extension for Employment Authorization Documents (EADs) for up to 540 days for certain qualified applicants. This temporary final rule, published on April 8, aims to “prevent renewal applicants from experiencing a lapse in their employment authorization and documentation.”
Prior to this measure, nearly 800,000 EAD renewal applicants faced the risk of their applications pending beyond the 180-day automatic extension period. According to SHRM’s 2024 Talent Trends research, over 75% of organizations have struggled to recruit full-time regular positions, and almost half have found it difficult to retain full-time regular employees in the past year. Moreover, SHRM’s 2023 Workplace Immigration research revealed that the continuous automatic renewal of work permits is the second most desired improvement to the workplace immigration system by employers.
In the current competitive talent market, the inability of qualified, legally authorized applicants to work due to USCIS processing delays—through no fault of their own—hampers the needs of U.S. employers and the broader economy.
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Update: Ten Ways to Prevent Corporate Check Fraud

Since our first article about this topic in 2022, check fraud has been a massive issue in the United States for many incoming European businesses and can be a culture shock for many. The Covid-19 pandemic has contributed to the decline of check use, but it is still a vital currency, and most businesses cannot afford to decline checks. TABS has come up with its top ten tips for avoiding check fraud.

While fraud is persistent in all walks of life, corporations are often a routine target for scammers. The United States contains the same trickery as Europe, adding one major factor: checks. Click below for all 10 tips!

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Juneteenth Office Closure Announcement

As we honor Juneteenth, now a federal holiday, TABS will be closing our U.S. offices on Wednesday, June 19th, 2024. Juneteenth commemorates the emancipation of enslaved African Americans, marking the announcement of freedom in Texas in 1865. Recognizing this significant day aligns with our commitment to Diversity, Equity, and Inclusion (DEI) and underscores the importance of equality and justice in our society.

Happy Juneteenth to all. Let’s continue to learn, grow, and honor this pivotal day together.

Success Story

We’re proud to share a fantastic client testimonial from Rabaconda.

“𝘞𝘩𝘦𝘯 𝘸𝘦 𝘥𝘦𝘤𝘪𝘥𝘦𝘥 𝘵𝘰 𝘰𝘶𝘵𝘴𝘰𝘶𝘳𝘤𝘦 𝘰𝘶𝘳 𝘜.𝘚. 𝘣𝘢𝘤𝘬-𝘰𝘧𝘧𝘪𝘤𝘦 𝘴𝘦𝘳𝘷𝘪𝘤𝘦𝘴, 𝘸𝘦 𝘤𝘩𝘰𝘴𝘦 TABS Inc. 𝘰𝘯 𝘵𝘩𝘦 𝘳𝘦𝘤𝘰𝘮𝘮𝘦𝘯𝘥𝘢𝘵𝘪𝘰𝘯 𝘰𝘧 𝘢 𝘧𝘳𝘪𝘦𝘯𝘥’𝘴 𝘤𝘰𝘮𝘱𝘢𝘯𝘺. 𝘛𝘩𝘦 𝘧𝘢𝘤𝘵 𝘵𝘩𝘢𝘵 𝘛𝘈𝘉𝘚 𝘪𝘴 𝘢 𝘤𝘰𝘮𝘱𝘢𝘯𝘺 𝘸𝘪𝘵𝘩 𝘢 𝘴𝘵𝘳𝘰𝘯𝘨 𝘌𝘶𝘳𝘰𝘱𝘦𝘢𝘯 𝘣𝘢𝘤𝘬𝘨𝘳𝘰𝘶𝘯𝘥 𝘸𝘢𝘴 𝘢 𝘴𝘪𝘨𝘯𝘪𝘧𝘪𝘤𝘢𝘯𝘵 𝘧𝘢𝘤𝘵𝘰𝘳 𝘪𝘯 𝘰𝘶𝘳 𝘥𝘦𝘤𝘪𝘴𝘪𝘰𝘯. 𝘛𝘩𝘦𝘪𝘳 𝘥𝘦𝘦𝘱 𝘶𝘯𝘥𝘦𝘳𝘴𝘵𝘢𝘯𝘥𝘪𝘯𝘨 𝘰𝘧 𝘌𝘶𝘳𝘰𝘱𝘦𝘢𝘯 𝘣𝘶𝘴𝘪𝘯𝘦𝘴𝘴 𝘯𝘦𝘦𝘥𝘴 𝘢𝘯𝘥 𝘵𝘩𝘦𝘪𝘳 𝘢𝘣𝘪𝘭𝘪𝘵𝘺 𝘵𝘰 𝘵𝘳𝘢𝘯𝘴𝘭𝘢𝘵𝘦 𝘜.𝘚. 𝘣𝘶𝘴𝘪𝘯𝘦𝘴𝘴 𝘱𝘳𝘢𝘤𝘵𝘪𝘤𝘦𝘴 𝘪𝘯𝘵𝘰 𝘢𝘯 𝘶𝘯𝘥𝘦𝘳𝘴𝘵𝘢𝘯𝘥𝘢𝘣𝘭𝘦 𝘤𝘰𝘯𝘵𝘦𝘹𝘵 𝘧𝘰𝘳 𝘶𝘴 𝘩𝘢𝘴 𝘣𝘦𝘦𝘯 𝘪𝘯𝘷𝘢𝘭𝘶𝘢𝘣𝘭𝘦.” – Jakob Saks

At TABS, we aim to make your entry and expansion into the U.S. market as smooth and successful as possible. We pride ourselves on delivering excellence in outcomes and our interactions with clients. Thinking about taking your business to the next level in the USA? Let TABS guide you!

AI for B2B Marketing – Great for U.S. Market Expansion

Tuesday, 11 June, 10 am EDT / 4 pm CET, Free Webinar

Looking for a Marketing bot that can replace your team? That doesn’t exist. But this webinar is designed to make your content creation efforts 20-30% more efficient.This webinar will show you how to personalize content, use a universal methodology, connect with audiences, and enhance credibility. Sign up now and ensure you receive a recording of the webinar and an AI for B2B Marketing Cheat Sheet to revisit the insights and share with your team.

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Select USA Investment Summit 2024

June 23-26, Washington DC

The SelectUSA Investment Summit is the highest profile event in the United States to facilitate business investment by connecting thousands of investors, companies, economic development organizations (EDOs), and industry experts to make deals happen.This summit is a prime opportunity to explore new avenues and expand professional networks in the United States. U.S. business, government, and White House officials will inform you all about expanding your organization in the United States. Throughout the days, you can participate in sessions to learn about business opportunities, federal tax credits and incentives (IRA, CHIPS act, etc.), visa matters, fundraising, and much more.

Don’t miss out on the chance to elevate your business to new heights in the world’s largest market. Space is limite, click below for further details and registration info.

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Doing Business in the U.S. – Risks and Pitfalls

Tuesday, 2 July, 11.00 am – 12.20 pm CET, Free Webinar

For years, the American market has offered enormous opportunities for Dutch companies that provide digital products and services. Every year, in collaboration with NLdigital and Wuersch & Gering LLP, we organize a seminar on doing business in the U.S. and give you an update on the latest state of affairs that you should take into account when doing business in the U.S. This time, the seminar will be a webinar on July 2. You can register via the NLdigital website.
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BeNeLux Catalyst 2024

November 4-15, New York City

BelCham (the Belgian-American Chamber of Commerce) recently started the selection procedure for the 2024 BeNeLux Catalyst! The two-week accelerator is designed for BeNeLux tech founders aiming to expand into the USA. Embark on a no-equity accelerator program tailored for high-growth tech startups, uniting forces to ignite their international expansion. Connect daily with mentors, investors, and clients, attend expert-led workshops, and access NYC’s entrepreneurial community through exclusive events and introductions.Who should join this program?
Founders of BeNeLux tech scaleups with a vision to establish a significant presence in the US market.

Don’t miss this extraordinary chance to connect with innovators, motivational mentors, potential clients, and immerse yourself in the dynamic atmosphere of New York City!

More Info / Registration

Meet Jennifer Coenen, Payroll Administrator

Jennifer is a Payroll Administrator with over ten years of payroll and office management experience. With a Business and Professional Services degree from Lone Star College, she brings various professional skill sets to her role. Jennifer fosters collaboration by actively listening and embracing opportunities to learn from her peers, embodying a spirit of teamwork and continuous growth.

“I deeply appreciate TABS’ rich and diverse environment and strive to actively contribute to our collective strengths and help grow our mutual learning and collaboration culture.”

Meet with Us!

Our team member Shina Alikhan visited the Netherlands to meet with some valued clients.
“Visiting clients in their environment was an eye-opening experience that allowed me to truly understand their needs, challenges, and aspirations. It was amazing to witness their passion for our partnership and to see the impact of our work firsthand. Amidst the breathtaking beauty of the Netherlands, these client meetings were the highlight of my trip, reinforcing the importance of personal connections in business. I can’t wait to build upon these relationships and continue delivering exceptional services.”
Do you want to meet with us? Let us know! We are always excited to connect with our clients and partners to discuss how we can better serve you.

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