Proposed grantor trust regulations may surprise U.S. taxpayers with foreign employees' trusts

Article Abstract:

The proposed regulations issued by the IRS in Sept 1996 to define the application of the grantor trust rules to nonexempt employees' trusts resolve much uncertainty for domestic trusts but increase the risk that foreign trusts will be subject to US taxation. The proposed regulations interpret IRC sections 671-679 as they apply to income earned by nonqualified deferred compensation plans. The regulations fail to provide sufficient safe harbors to ensure that offshore plans that are overfunded for legitimate reasons will not be subject to taxation as grantor trusts.

Corporate Income Taxes, Trusts and trustees, Trustees, Trusts (Law), Grantor trusts, Deferred compensation

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The value added tax in the European Union

Article Abstract:

Companies doing business in the European Union (EU) should become familiar with the value-added tax (VAT) system to which they may be subject and to which severe penalties may apply for noncompliance. The VAT is an indirect consumption tax which is applicable to goods and services. Taxes must be accounted for by filing VAT returns at specified intervals, depending on the business type. Differing procedural requirements may apply in different EU member states and the 1993 institution of the European Single Market has created increased administrative burdens.

European Union, Tax Administration, Value-added tax

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The withholding obligations of U.S. and foreign employers on compensation paid to foreign national employees in the United States

Article Abstract:

The increased US employment of foreign nationals has been accompanied by an increase in employment tax issues. Compliance with payroll withholding tax and documentation requirements involves complex planning and accounting for employers and employees. Issues which may arise include resident and nonresident alien status, independent contractor status, treaties, and income nature and source.

Employee Compensation, International aspects, Wages, Wages and salaries, Aliens, Withholding tax

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