Also: Supporting Your Installation Project (“Montage”) in the United States
As German-American experts in auditing and tax consulting in the US, we offer consultation and support to help your business navigate complex tax laws, implement shared service centers, and provide comprehensive support for companies operating in multiple US states.
Establishing and Managing a US Subsidiary: Expert Assistance in German
As your German Wirtschaftsprüfer und Steuerberater in den USA®, we provide value and support. Our role as auditors and tax consultants in the US is not just about offering advice – it involves transforming your cost centers into value-oriented units and leveraging real-time data insights for strategic decision-making.
Optimizing a US Subsidiary for German Tax Planning
Structuring a US subsidiary with German tax requirements in mind necessitates thoughtful planning and close coordination to ensure seamless integration of German and US tax regulations. As your trusted partner, we support you and your advisors in developing an entity structure that satisfies both German and US stipulations, maximizing tax efficiency while minimizing potential risks.
Choice of Legal Form
The choice of the right legal form for your US subsidiary significantly impacts liability and tax treatment in both the US and Germany. We advise you on selecting the legal form best suited to your individual needs and objectives.
Setting transfer prices between the German GmbH and the US subsidiary requires careful planning, including pricing goods and services to meet international tax regulations and transfer pricing rules in both countries. We support you in defining transfer prices that are both tax-efficient and economically beneficial.
Location of Management
In Germany, companies are generally taxed based on the location of management. It is critical to ensure your US subsidiary’s management is properly organized to minimize tax impact in Germany. We consult you on organizing your US subsidiary’s management to optimize tax consequences.
Centralized Administration and Accounting
Centralizing the administration and accounting of US subsidiaries offers significant benefits for German companies. By consolidating bookkeeping, you can reduce costs, utilize resources more efficiently, and ensure compliance with tax regulations in the US and Germany. We support you in implementing and optimizing a centralized accounting system for your US subsidiary.
Benefits of Centralized Administration and Accounting
- Increased efficiency: Consolidating accounting and administration allows you to cut costs and utilize resources more efficiently.
- Ongoing compliance: Centralized bookkeeping ensures you always have financial oversight and guarantees adherence to tax regulations in the US and Germany.
- Enhanced decision-making: With centralized financial data, you gain quick access to comprehensive financial information, facilitating decision-making and long-term business strategy planning.
- Risk mitigation: Standardizing accounting processes and controls minimizes the risk of errors and irregularities.
In summary, structuring a US subsidiary with German tax considerations in mind is a complex process that should be carefully planned and executed. Our experts in US tax matters support you in developing an optimal corporate structure to maximize tax efficiency and minimize potential risks.
US Auditing and Tax Consulting Expertise
We help prepare German and American financial reports, assist in shareholder meetings, and facilitate specific accounting processes through Agreed Upon Procedures (AUPs), typically in the form of “Reporting Packages” the parent company requires.
Navigating the Complexity of US Taxes
US tax law is complex, with 51 tax jurisdictions (Federal Government and States). As your German Wirtschaftsprüfer und Steuerberater in den USA®, we help clients navigate these complexities, ensuring compliance with federal and state tax obligations.
Support for Companies Operating in Multiple US States
From the establishment to daily operations of your business, we provide comprehensive support for clients operating in multiple US states. Equipped with our expertise, technical equipment, and CPA qualifications, we guide clients through tax audits and voluntary disclosures at the federal and state levels.
Net Salary Agreements in International Assignments
Net salary agreements represent a critical consideration when deploying personnel overseas. Notably, within the framework of U.S. tax legislation, an intriguing provision exists: relocation expenses, excluding transportation costs, are designated as part of the net salary.
Our team offers comprehensive consultancy services to optimize the tax implications within this intricate domain. Our experts are ready to answer your inquiries concerning net salary agreements and international assignments within the United States.
We are committed to devising solutions that align with your specific objectives to the utmost degree. Benefit from our extensive expertise in this field.
Corporate Nexus and Voluntary Disclosure
In the USA, the concept of Nexus refers to a sufficient physical or economic presence of a company in a state that triggers tax obligations. When a company discovers a previously unnoticed Nexus, the voluntary disclosure process allows for proactively clarifying this tax situation or minimizing potential penalties.
As your German Wirtschaftsprüfer und Steuerberater in den USA®, we analyze your Nexus situation and guide you through the voluntary disclosure process. Our specialized team helps you comply with all tax regulations and optimize your tax situation.
If you have or suspect a Nexus in a US state or have questions about the voluntary disclosure process, we are your go-to experts Contact us for personalized advice.
Navigating U.S. Beneficial Ownership Reporting Changes in 2024
The United States, traditionally seen as a tax haven, is now at a crossroads as it grapples with concerns about the transparency of beneficial ownership, especially in the context of anonymous LLCs formed in states like Delaware, Nevada, and Wyoming. The introduction of the Corporate Transparency Act (CTA) is set to be a game-changer, requiring many businesses and individuals to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN) beginning January 1, 2024.
What is Beneficial Ownership?
Beneficial owners are the natural persons who ultimately own or control a company, either directly or indirectly. This includes those with substantial control over management or operations, or those holding a significant ownership stake.
Who Needs to Report Information?
The Corporate Transparency Act (CTA) requires reporting from two main categories:
- Domestic Reporting Companies – Corporations and limited liability companies formed in the United States.
- Foreign Reporting Companies – Companies incorporated under foreign law but registered to do business in the United States.
Exemptions from CTA Reporting Duties
Despite requiring transparency, the CTA provides 23 exceptions covering entities such as:
- Government Agencies – Exempt are federal, state, local and tribal governments including their instrumentalities.
- Publicly Traded Companies – Those registered with the SEC are exempt.
- Financial Institutions – Exempt financial services providers include banks, credit unions and certain regulated institutions.
- Registered Securities Professionals – Exempt are SEC registered brokers, investment advisers and funds.
- Large Operating Companies – Those meeting all three: 1) over 20 full-time US employees; 2) US physical location; and 3) over $5 million in gross receipts reported last tax year.
Implications for Individual Clients
Our analysis indicates most individual clients will not meet exemption criteria, thus must file a beneficial ownership report with FinCEN.
- January 1, 2024 – Beneficial ownership reporting duties take effect.
- January 1, 2025 – Preexisting companies (formed/registered before 01/01/2024) must submit initial report.
- 90 Days – Newly formed or registered companies have 90 days after incorporation to report.
Affected companies must use FinCEN’s secure online system, available from January 1, 2024. Alternatively, external service providers can assist with submitting reports.
Assessment and Outlook
Notably, collected information will not automatically be shared with agencies or jurisdictions, unlike CRS and FATCA data. FinCEN database access is restricted to authorized officials upon inquiry. Additionally, CTA does not comprehensively regulate trusts. Noncompliance risks civil or criminal penalties.
An upcoming FinCEN Notice of Proposed Rulemaking, expected late 2023, will target increasing transparency in US real estate markets.
Collaboration with German Consultants
We work closely with your German consultants to support you in the tax and legal structuring of US subsidiaries, including establishing and managing a US subsidiary. Our cultural expertise aids businesses in making informed decisions.
Along with your German consultants, we also handle various matters, such as designing employment relationships for dispatch, allocating income from domestic or foreign operations, and reporting your foreign relations per German regulations.
By leveraging our knowledge and experience as German Wirtschaftsprüfer und Steuerberater in den USA®, we create value for your business.
We also offer business consulting, drawing on our long-standing experience with cultural differences.