Cross Border Financing Strategies

Businesses that access capital outside their country of operation face many complex issues. Working closely with the PKF Texas Tax Solutions Group, entrepreneurs can secure financing strategies that meet operational and financial objectives while achieving optimum tax results.

Global Tax Minimization

We work with Houston-based and international companies to integrate an overall structure that is most beneficial to your company from a worldwide tax standpoint. Entrepreneurs often neglect to consider the cost of doing business in other countries. The tax implications are grave and could result in significant incremental taxation. At PKF Texas, we strive to ensure that your business goals are aligned with effective tax minimization strategies.

Interest Charge - Domestic International Sales Corporation Incentive

The Interest Charge - Domestic International Sales Corporation (IC-DISC) remained in place after the Tax Cuts and Jobs Act of 2017 (TCJA). If you are an exporter and are not utilizing this powerful tool, then you are likely paying too much in taxes. Working with our International Tax team, you can assess your eligibility for this incentive, secure refunds from prior years, if one is in order, and ensure you obtain the maximum benefit allowable for your company's situation.

The use of an IC-DISC allows a portion of the profits from export sales (50%) that are paid as a commission to the IC-DISC to not be subject to corporate level taxation at the effective corporate tax rate (maximum 21%) and in effect allows a US C-Corporation (“USC”) to pay tax deductible dividends. Individual shareholder reports dividend at favorable 13% tax rate as qualified dividend.

Transfer Pricing

Transfer pricing allows companies to generate pricing for goods, services, royalties and loans between companies in a cross-border context. In order to minimize exposure to penalties; however, you must maintain certain compliance levels. We work with owners and managers to ensure compliance while meeting IRS requirements and integrating business operations.