Navigating the Effectively Connected Income Tax Regime: Avoiding Devastating Impact on Taxes and Financial Statements

Implementing Compliant Tax Strategies to Avoid or Mitigate Punitive Taxation

Recording of a 110-minute CPE webinar with Q&A


Conducted on Thursday, March 23, 2017

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will provide corporate tax professionals and advisors to multinational corporations (MNCs) and other multinational businesses with a detailed, practical and thorough guide to mitigate the risk of high levels of tax on effectively connected income (ECI). The panel will provide practical guidance with respect to tax planning and using fully compliant offshore companies to achieve a desirable overall effective tax rate in a multinational business.

Description

In recent years, the IRS, governmental authorities in many countries, the G-20, and the OECD are increasingly turning their attention to MNCs and multinational businesses that shift income to lower-taxed foreign jurisdictions to avoid or reduce business taxation. This global scrutiny is aimed at company profits that are effectively connected to a jurisdiction other than that claimed by the business.

The IRS’s successful application of the ECI rules against a noncompliant business may trigger significant tax and financial statement consequences. A failure to properly plan considering ECI risks can result in an effective tax rate of more than 50%. Such taxation may also cause significant financial statement tax revisions to properly reflect the allocation of income between the United States and foreign jurisdictions.

Listen as the panel provides tax executives, professionals and auditors with practical guidance to determine whether their company’s tax planning policies and procedures may be subjecting their company to ECI risks. Using illustrative examples, the panel will outline effective approaches to plan for multinational business planning, and to mitigate tax risks and potential government penalties.

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Outline

  1. ECI and financial statement risks
    1. Background
    2. Overview of the ECI rules
    3. Growing IRS scrutiny of profit shifting and OECD base erosion and profit shifting (BEPS) initiative
  2. When an MNC or multinational business may be subject to the ECI risks
    1. Value drivers predominantly performed by U.S. group members
    2. U.S.-located control and decision-making
    3. Lack of foreign entity CEO and management capability
  3. Major issues for potentially vulnerable MNCs or Multinational Businesses
    1. Risk assessment
    2. Treaty Issues
    3. High tax liabilities and penalties
    4. Online Business Risks
    5. Financial statements
  4. Actions to mitigate risk
    1. Post-tax filing
    2. Current tax planning and filings
    3. Future tax planning

Benefits

The panel will cover these and other key issues:

  • What is ECI?
  • How can tax executives and advisors assess the risks of ECI and its impact on financial statements?
  • How can tax executives and advisors advise companies on avoiding high ECI tax liabilities and penalties?
  • What are the key steps to mitigate taxable ECI risks in the past, present and future?

Faculty

Steven Hadjilogiou
Steven Hadjilogiou

Partner
Baker & McKenzie

Mr. Hadjilogiou focuses his practice on tax planning. He has substantial experience advising on transfer pricing,...  |  Read More

Daniel W. Hudson
Daniel W. Hudson

Baker & McKenzie

Mr. Hudson, a member of the Firm’s Tax Practice Group, practices mainly in the areas of international tax...  |  Read More

Raimundo Lopez-Lima Levi
Raimundo Lopez-Lima Levi

Founder and Managing Partner
Lopez Levi Lowenstein Glinsky

Mr. Levi is a CPA, a CVA, and is certified in financial forensics (CFF). With over two decades of experience, he has...  |  Read More

Sean J. Tevel
Sean J. Tevel

Baker & McKenzie

Mr. Tevel is a member of the Firm’s Tax Practice Group. He primarily focuses on general international tax...  |  Read More

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$247