International Tax Series - Part 3: US business expansion, localised development

Published on 21 Oct 2020 | Took place at Online, National

As the Masks business continues to successfully expand into the US market, Jane and Judy make the decision to expand their presence in the US from the ‘beach head’ branch to a more permanent presence involving the establishment and operation of a local US entity (USCo).

USCo will act as the US business operator, including acting as an agent or as a distributor for the Masks business in the US, employing local personnel to fulfil management, business development and operational roles as required.

Depending on demand and supply, USCo will also ideally establish local manufacturing facilities in the US and develop iterations of the core IP of the business.

Some of the issues addressed in this session included:

• what type of entity to establish
• treatment of the US entity for Australian tax purposes
• differences in tax outcomes of agency vs buy/sell
• secondment of employees and PE risks for Australian legal employers
• funding, including thin capitalisation
• issues and implications of tax residency, both under domestic tax law and treaty
• transfer pricing US tax issues, including state and local as well as federal, concessions and exemptions, indirect tax issues etc.