Jurisdiction to Tax Tx 8300

Learning Objectives 1.Describe and distinguish the ___ types of jurisdictions, 2.Explain jurisdiction under ___ tax system, and 3.Know the importance of ____________ decisions You should be able to:

Jurisdiction Defined Power of ___________ to impose tax Analogous to _____ in SALT

General Concepts Jurisdiction Over Basis of Taxation Parties a. b. c. d. a. b. Transactions

Around the World Global Systems Territorial Systems Brazil Germany India Mexico United Kingdom United States Bolivia Costa Rica France Guatemala Malaysia Panama Uruguay

Double Tax Problems Two countries claim same ______ as resident Two countries claim jurisdiction over same ___________ One country claims jurisdiction over ______ while second country claims jurisdiction over ___________ Absent some fix, what is the result?

Mitigating Double Tax Unilaterally Bilaterally a. Commonly defined _______ b. Common ______ rules c. _________ method d. _________ tax rates a. _________ method b. Tax ______ e. _________ authority

U.S. Tax System Nonresident aliens and foreign corporations –___ source investment income –____________ connected income U.S. citizens, residents, and corporations –_________ income –Foreign tax ______

U.S. Jurisdiction Illustrated DC FC Does the U.S. tax the FC on its ECI? Does the U.S. tax the DC on its foreign profit?

Check the Box Only ________ ________ can select tax classification. –Trade, business, or venture –Carried on –To earn and ______ profits “___ __” corporations –Always treated as ________ corporations –Includes __ foreign _____ ______ companies

Check the Box Single-owner foreign business entities –Treated as _________ or branch –If owner has (no) ______ ______ under _____ law, default classification is corporation (______) Multiple-owner foreign business entities –Treated as corporation or __________ –If all owners (do not) have ______ ______ under _____ law, default classification is corporation (______)

Hybrid Entities Example –Host country treats as ___________ –U.S. treats as ______ Advantages –_______ ________ in host country –Flow-through of _____-__ ______ –Easier flow-through of _______ ___ _______