Narelle MacKenzie was recently quoted in Fortune.com’s article “Why Washington is Tackling the Tax Inversion Problem All Wrong”. In regards to corporate inversions, she argues that the more you lower the corporate tax rate, the less common inversions will become. “A 15% corporate tax rate would stop most inversions,” she says.
WalletHub recently turned to some of the foremost experts in the fields of accounting and tax law in search of insights into the country’s current corporate tax system as well as potential fixes to it. You can check out the questions we posed as well as their responses below. They posed the following question to Narelle: “Is the U.S. leaving money on the table with the current corporate tax structure?” An excerpt of her response is below. You may also read Narelle’s full response online or download a copy of it.
Is the U.S. leaving money on the table with the current corporate tax structure?
There are a number of things that are globally uncompetitive about U.S. corporate income tax rates. Firstly, the U.S. has a double tax system whereby the profits earned by a company are taxed, and then they are taxed again in the hands of shareholders. It is really an internationally uncompetitive tax system. There are a number of ways to minimize double tax, and in the USA many CPAs/tax advisors have businesses established as a S corporation or use LLCs which are taxed as partnerships/sole proprietorships. However, this is not an option for U.S. public companies, as they must be C corporations. Remember, the majority of income taxes (federal and state) are paid by individuals. Read more online.
AdminIs the U.S. Leaving Money on the Table with the Current Corporate Tax Structure?
SDSU Aztecs Abroad: Accounting in Shanghai studies the US federal taxation of individuals, including the interaction of the Chinese taxes for a US expat working in China.
China is a growing area for US businesses, and US businesses send expatriates to China. How are these US expatriates taxed in the USA? What are the US and Chinese tax obligations on their earnings in the USA and China? The US taxes US citizens on a worldwide basis, so understanding the US taxation of individuals as covered in the Acctg 503 class will provide students with an edge in the global economy. Shanghai is one of the current shining business locations in China, as well as a great history of conducting global business trade.
The purpose and scope of the course is the US federal taxation of individuals, including income, deductions, credits, social security taxes, and property transactions. This course will have an international taxation component, providing the interaction of the tax system of China and the USA for a US person living in China (“US expat.”)
San Diego State University
CES Faculty-Led Programs
Course Dates: July 5-22, 2016
Dates Abroad: July 8-22, 2016
The primary objective of the course is to help you understand the US International Tax rules. You will gain an in-depth understanding of the fundamentals of the US tax law in an international context and apply that understanding with international tax planning concepts. The focus of this course is the US federal income tax rules as it relates to international and cross-border transactions.
By the end of the course students should be able to:
Identify and explain key US international tax concepts.
Apply international tax concepts.
Perform international tax calculations.
Explain the federal constitutional and statutory limitations on federal taxation, and be familiar with some major judicial and statutory authorities.
Draw supportable conclusions regarding tax issues by using research skills (including accessing and interpreting sources of authoritative support) to identify and evaluate issues.
Apply oral and written communication skills to high quality professional presentations and group discussions.
Instructor: Narelle E. MacKenzie CPA
Class Days: Wednesday
Class Times: 7pm-9.40pm
Class Location: GMCS 306
Office Hours Times: Wednesday 2pm-3.30pm
Office Hours Location: SSE2429
Units: Three (3)
Join the 2015 enrolled agent study programme. This course, offered by DJH International Tax, is the only one of its kind outside the US and combines three days of intensive tuition by Narelle MacKenzie, a US-based CPA, with a choice of six or 12 months’ access to specialist online materials developed by Gleim. As well as covering the content of the three exams, the system offers progress tests, practice exams a Gleim “counsellor” and a wealth of other features.
If you practice in the area of US individual tax you will probably want to represent your clients before the IRS. To do so, if you are not a US CPA or attorney, you need to be an enrolled agent. This involves passing an exam comprising three papers, on individual and business taxation.
Most practitioners outside the United States will be dealing with US expatriate citizens and so the content of the exams can come as something of a surprise, since it was designed with the US-based practitioner in mind and covers significant aspects of US domestic taxation to which the non-US based practitioner is rarely exposed.
The live course takes place from 27-29 July 2015 at a dedicated training venue in central London.
Ms. MacKenzie’s guest article has been featured in the February 2015 issues of the ADIT Student Newsletter. In the article, Ms. MacKenzie shares valuable exam preparation tips and strategies. These tips on studying for ADIT exams have come from successful ADIT students. Tips include advanced preparation, use of past papers, and proper time allocations. View the entire ADIT Student Newsletter.
AdminADIT Network: Guest Article by Narelle MacKenzie
DJH International Tax Ltd. has been conducting short, intensive courses in international tax, US corporate tax and transfer pricing since 2011. Each course is 3-4 days in length, making them ideal for those who have limited free time. To learn more about the March 2015 courses on international, US tax and transfer pricing, please see the DJH International Tax brochure.
The tutors teach regularly and are experts in their field. With this experience, they can bring unique practical experience to the classes.
Classes are small in size, which allows everyone to benefit fully from the tutors’ attention. The small classes also mean everyone can have their questions answered live.
While DJH focuses on providing practical help on real international tax problems, their courses featured here are based around the relevant syllabus for the Advanced Diploma in International Taxation.
Among the classes are:
Principles of US International Corporate Taxation
23-26 March 2015
Course Tutor: Narelle MacKenzie
In-depth US International Corporate Taxation
30 March – 2 April 2015
Course Tutor: Narelle MacKenzie
Please see the brochure for details and registration information.
AdminDJH International Tax – Live, Compact Training Courses – March 2015
On December 2, 2014, Ms. MacKenzie presented to the CalCPA International Tax Discussion group in San Diego. The presentation is about preparation of IRS Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations, and some of the issues to be considered.
Objectives of the presentation include:
Gain an understanding of the tax terms for outbound tax issues
Discover when Form 5471 may be required to be filed
Explore the information to be reported on Form 5471
Understand the penalties for failure to file Form 5471
Learn the fundamentals of U.S. international taxation! This basic seminar will provide a basic understanding of U.S. international tax codes and tax reporting requirements for U.S. corporations with operations abroad. This course is for corporate tax, finance and accounting executives, CPAs, tax attorneys and counsel. There is no advance preparation or pre-requisites for this group live seminar.
On Monday, March 3, 2014, Narelle MacKenzie, International Tax Consultant, presents an Introduction and Overview of U.S. International Taxation. Topics include:
Understanding worldwide vs. territorial tax systems
Residence vs. activity based tax jurisdiction
Taxation of foreign income of U.S. corporations
U.S. income and sourcing rules
Permanent establishment principles and double taxation
Claiming a deduction or credit for foreign income taxes
7676 Hazard Center Drive
San Diego, CA 92108
Tax Savings of $750 Million.
Contract Review resulted in indirect tax savings of $750 million over the life of the contract by utilizing exemptions, certificates, and where that was not possible, changing the Importer of Record to a related party.
Global Tax Savings of $20 Million.
Tax savings accomplished through structured placement of assets that was tax free for US tax purposes but provided a step-up in basis for foreign country purposes.
Reduction of Taxes to $0.
Identified a solution for a US joint venture with a US partner and a foreign partner, operating in a third country, which reduced US taxes for the foreign partner, on the foreign operation, to zero.