TABS Talk – September 2023
News for your U.S. Venture
On behalf of the entire TABS Team,
Jacob Willemsen
Deadline Corporate Income Tax (CIT) 2022
If you requested a six-month extension to file your CIT 2022 last April, your tax return will be due on October 16, 2023. State income tax due dates typically follow the federal deadline. We advise contacting a Certified Public Accountant to assist you with this filing as soon as possible.
Contact our Tax Team
Requirement to File Form 5471 with Corporate Income Tax
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 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.
U.S. Sales Tax Exposure for Foreign Companies
The ever-changing rates of sales tax jurisdictions and a difficult system to determine what is and is not taxable make U.S. tax compliance one of the most complex in the world. The U.S. sales tax system often has American companies scratching their head, but foreign companies are even less familiar with the procedures. In what way are out-of-country businesses required to comply with sales tax on sales made in the U.S.? A confusing aspect for many foreign retailers or wholesalers is that not all of the 50 states recognize bilateral tax treaties.
This means that even if the foreign company is not subject to U.S. Federal income tax, they could still be required to collect and remit sales tax depending on the policies of local state governments. Foreign companies must comply with sales tax in the same manner as U.S.-based businesses. Sales tax liability is a question of nexus. States can define nexus in terms of revenue (economic nexus) or transactions. Having a physical presence in a state is no longer necessary to establish a nexus. Businesses in the U.S. and outside our borders are responsible for collecting sales tax in the states in which they have established nexus. Questions? Contact our Tax Team!
Contact our Tax Team
CurTec Bridges Cultural Differences for a Successful U.S. Expansion
Workshop: Bridging Cultural Differences
To tackle this challenge head-on, CurTec enlisted the expertise of Annette van der Feltz from Dutch American Connection. Annette conducted two pivotal workshops: one tailored for the Dutch team, which focused on “Effectively Collaborating with Americans”, and another designed for the American team, centered on “Navigating Dutch Work Culture”.
The Power of Understanding Cultural Nuances.
These workshops primarily aimed to bring awareness to how typical Dutch behaviors and practices might be perceived differently by their American counterparts and vice versa. These differences, if left unaddressed, could lead to costly miscommunications and unnecessary delays, among others. Simply providing a list of “do’s and don’ts” was insufficient. Understanding the underlying reasons for differing expectations and how assumptions can influence communication is the key to effective communication and cooperation. Read more about the transformation, streamlining business processes, addressing cultural differences, and the positive impact on cooperation!
To Complete Article
The Delaware Flip: A Smart Move for European Companies?
Many European companies try to raise capital in the U.S., often to fund their U.S. expansion plans. Some American investors will only invest if the European company first consummates a “Delaware flip”. A Delaware flip is the process of changing the corporate structure of a Dutch (or other non-U.S.) company by creating a new top holding company in Delaware and turning the original Dutch company into a wholly-owned subsidiary of the Delaware corporation.
A Delaware flip is a major corporate undertaking and requires a significant investment of time and money. However, if a Dutch company has a high level of confidence that a flip will result in one or more U.S. investors investing a significant amount in the company, it would certainly be a smart move to consider a Delaware flip.
Read the complete article that explains what a Delaware flip is, why and when it’s interesting to opt for this construction, and what the disadvantages and consequences for the organization and shareholders are. Discover the secrets behind this dynamic corporate strategy that could reshape your organizations future!
Join our Roundtable Event about the Delaware Flip in Eindhoven and Amsterdam in October, check our Events.
To Complete Article
Verifying the Identity of your New Hires in a Post-COVID Era
Beneficial Ownership Reporting
Although reporting requirements go into effect on 1 January 2024, companies that already exist prior to that date will have the entirety of 2024 to file their initial reports (they are due on or before 31 December 2024). Any company that is created on or after 1 January 2024 will have 30 days to file its initial report. Once the initial report has been filed, both existing and new reporting companies will have to file updates within 30 days of a change in their beneficial ownership information. These changes will create an additional burden on your company’s compliance.
It is important to remember a Beneficial Owner does not only include those with an ownership interest in the company but includes those who have substantial control over the company. FinCEN has defined substantial control in a manner to identify key individuals within the company and includes those who: (1) are senior officers such as the President, CEO, COO, CFO, and General Counsel (2) have authority over the appointment or removal of any senior officer or a majority of the board of directors (or similar body), (3) directs, determines or has substantial influence over important matters of the reporting company, including, for example, the reorganization, dissolution or merger of the reporting company, the selection or termination of business lines or ventures of the reporting company and the amendment of any governance documents of the reporting company, or (4) has any other form of substantial control over the reporting company, as persons with ‘substantial control’.
We suggest that our clients begin to understand who within their organizations will be considered Beneficial Owners and reach out to us early in 2024 so that we may begin the registration process on their behalf. The tendency should be to error toward over-reporting in connection with these requirements.
If you wish to make any changes to the officers and directors of your company prior to reporting, please reach out to us.
Participate in the TABS 2023 Survey!
Just a quick reminder about our survey, as we need your insights! If you’re an active player, have tried it in the past, or even just have your eyes set on the U.S. market, your voice matters.
Take our quick survey now and let your experiences pave the way for others.
Remember our 2020 findings:
1. Most businesses choose Delaware for U.S. entity formation.
2. Many foreign business owners encounter cultural differences and learn from workshops and seminars.
3. Local sales and marketing are crucial for success.
4. U.S. Tech salespeople make a lot more money than their European counterparts.
5. Networking, networking, networking!
Take the Survey
Private Office Suites Available for Rent
Conveniently located in the heart of Midtown, NYC, strategically positioned between the iconic UN and Grand Central Station, our location offers excellent access to public transportation and major highways. Whether you’re a dynamic startup or an established enterprise, we have the ideal space. Each suite has all the essentials required to ensure productivity and comfort, including high-speed internet, efficient phone lines, and ergonomic furniture.
But there’s more. With a welcoming lobby and attentive doormen, your guests are greeted with warmth and professionalism. A dedicated reception area streamlines your day-to-day operations. Our conference room is equipped with the latest technology. And the communal kitchen adds a perfect touch of practicality and comfort to your workdays.
Contact us to explore our offerings and discover the perfect suite that aligns with your business aspirations.
Contact Us
End-of-Year Tax Preparations
It’s not too early to begin preparing for next year’s tax season. You should note that the first deadline is January 31, 2024. This is when your employees need to be provided with their W-2s, and contractors or vendors to whom you have paid more than $600 need to be provided with 1099s. For this, you will not only need their tax ID but also their updated address information. If you don’t currently have this information, you should begin to request it as soon as possible; in our experience, some contractors or vendors are slow to respond and may need to be pursued at length before you receive the required information. Failure to timely file a 1099 can result in penalties. If you would like additional information or assistance with completing the CIT or 1099s and filing the corresponding 1096 with the IRS, or if you have other tax-related questions, please contact our tax support officers.
Contact our Tax Team
Meet us at the following events in the Netherlands in October.
Roundtable: The Delaware Flip
Wednesday, October 11th, 3.30-5.30pm CET, Amsterdam
Dutch spoken | Free of costs
What is the Delaware Flip? Why and when is it interesting to opt for this construction? What are the disadvantages and consequences for the organization and shareholders? Discover the secrets behind this dynamic corporate strategy that could reshape your organization’s future!
The following questions will be discussed in more detail:
- What is a Delaware Flip?
- In which situation is it interesting, and when is it used?
- What are the advantages and disadvantages of a DF, and what legal and fiscal steps must be taken?
Speakers
- Jan Joosten (Fisher Broyles)
- Wouter de Win (Tax Partner at KPMG)
- Jacob Willemsen (TABS)
TABS Inc. organizes this event together with KPMG and Fisher Broyles.
Info/Register
Your Staff to the U.S.?
Thursday, October 12th, 1.00 pm CET, Gouda, The Netherlands (Dutch spoken | Free of costs)
Are you considering having employees work on American soil? There are dozens of tax, legal, social, and administrative questions immediately. You will also need visas, plus residential and work locations. And an analysis of the associated risks that need to be covered. All in all, it’s a lot to manage. Come to Gouda on Thursday, October 12, to be informed about all these topics simultaneously!
Speakers:
- Michiel Delmonte – AGS- KHZ
- Hilde Cevaal – VisaVersa
- Maarten van den Beucken en Hans de Vries – Taxperience
- Mario Vitale – De Goudse Verzekeringen
- Willem Wolfs – TABS Inc.
This seminar is interesting for HR managers and other professionals from companies that are going to establish or are considering establishing themselves in the U.S.
Info/Register
Meet Victor Tourinho, Compliance Specialist
Victor completed a degree in Public Administration and Territorial Policies at the University of Lisbon and has worked in Portugal’s public and private sectors. Still, with a passion for international relations, he went abroad and served the Embassy of Portugal to the United States in 2015. After briefly returning to Lisbon, where he worked in private aviation, Victor moved to London to work in fintech. After spending over two years in the financial sector, he returned to the U.S., embracing a new experience with TABS Inc. in September 2019. He is currently working from Portugal, where he originates.
“I always seek experience and knowledge to better serve our clients in various areas. Nothing is more satisfying than seeing the companies we assist strive in the U.S. market. That is why one of the things I enjoy the most is the close contact we maintain with our clients. It makes me very proud to work in international business with such a multicultural team and positively impact the professional and personal achievements of so many people worldwide.”
New Office in Eindhoven, The Netherlands
We are excited to have opened our new branch in Eindhoven, the Netherlands. Conveniently located in the prestigious Kennedy Tower, right next to Eindhoven Central Station, our new office serves as the home base for our dedicated Business Relations Team. This team is committed to providing service to our existing clients, ensuring their ongoing success and satisfaction.
But that’s not all! In addition, we are delighted to have two talented financial specialists who will be based in our Eindhoven office. They bring their bookkeeping and sales tax expertise to further strengthen our Financial Support Team. With their skills and knowledge, we are well-equipped to provide comprehensive financial guidance to our clients, enabling them to navigate the complexities of the U.S. market with ease.
Want to visit us in Eindhoven? Contact us.
Business Relations Team
To better serve our valued customers, we are excited to introduce Willem Wolfs as our new Business Relationship Manager. Willem started on May 8 and is based in the Netherlands. With a wealth of experience in account management and customer service, Willem will play a key role in building and strengthening relationships with our existing customers and network of service providers.
Flora Bergshoeff, one of our seasoned professionals, was recently promoted and will take on a new role as Business Development Manager. Floor will be responsible for finding, developing, and onboarding new customers in this position.
Contact our Relations Team
