Anti-deferral Planning

Ogle International Tax Advisors can advise you with the deferral planning inherent in cross-border transactions.  Deferral planning is one of the most important strategies utilized by U.S. multinationals and individuals to reduce their global effective income tax rate. 

In general, the anti-deferral tax rules can apply when U.S. individuals, U.S. corporations, U.S. limited liability companies or partnerships composed of U.S. members or partners engage in foreign business or investment activities.

The deferral privilege is the feature of U.S. international income tax law that generally allows a U.S. person to conduct business activities abroad through a foreign corporation without paying U.S. tax on the corporation's foreign-source earnings until they are distributed to the U.S. person or the U.S. person sells the foreign corporation's stock. 

To prevent abuse of the deferral privilege, Congress over the years has enacted anti-deferral tax regimes, which curtail deferral in certain specified circumstances. The Internal Revenue Code contains anti-deferral tax provisions relating to controlled foreign corporations (CFC’s), and passive foreign investment companies (PFIC) that require their U.S. owners to include certain types of income (e.g. Subpart F income) of foreign companies in their U.S. taxable income on an annual basis, regardless of whether such income is repatriated to the U.S. owners as dividends. 

In the area of tax compliance, our professionals can prepare all of the annual tax forms for U.S. taxpayers related to foreign investments permitting a seamless integration of tax planning and compliance functions with one advisory group.

For more information, please call us or download our Anti-deferral Planning brochure.