U.S. Expats Got One-Year Delay on Repatriation Tax On Profits from Foreign Companies

 Overseas Business People


Unexpectedly, Americans with overseas business interests have been given relief, but just for a year so far. Hopes are up that the tax reforms signed by President Trump 6 months ago will be amended by Congress, so the relief will be permanent and the legislation changed.

A onetime “deemed repatriation tax” of 15.5 % was imposed in the Tax Cuts and Jobs Act payable in eight installments. It was supposed to persuade the huge multinational companies like Apple and Google to bring their profits back to the US from other countries where they had earned them. Wealth News Today has reported that unfortunately, many small business owners would also be required to pay.

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  • About 1 million US citizens and green card holders living as expats own more than 10 % of a “controlled foreign corporation”. Since they live overseas they were going to have to pay the tax, over an eight year period.
  • There was a penalty if the first payment was missed that would make the full amount payable immediately.
  • The Internal Revenue Service has now issued new information and guidance. Expat businesses with a net tax liability of less than $1m for 2017 are not required to pay the penalty for not paying the first of eight installments that this new tax is divided into, or at risk for having all eight years’ worth of payments due at once.

This repatriation tax of 15.5% was supposed to begin in March, then was delayed to mid-June and now has been delayed further.

If you are uncertain what your obligations to the IRS are, talk to us, we will help you find the answers that apply to you.

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Fulton Abraham Sanchez, CPA

Fulton Abraham Sánchez, CPA is a Certified Public Accountant, specialized In Tax Planning, International Business, Wealth Management and Offshore Banking. You can email him to fa@fascpaconsultants.com or follow us on Facebook : FAS CPA & Consultants.

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