Integrity Legal - Law Firm in Bangkok | Bangkok Lawyer | Legal Services Thailand Back to
Integrity Legal

Legal.co.th - Resources 

Research & gain insights into Thai, American, and International Law.

 

Contact us: +66 2-266 3698

info@integrity-legal.com

ResourcesCorporate and Tax AdvisoryUS Tax LawAmerican Expats Given Reprieve from Deemed Repatriation Tax

American Expats Given Reprieve from Deemed Repatriation Tax

Transcript of the above video:

As the title of this video suggests we are discussing Deemed Repatriation. There is another video on this channel which discusses that issue in greater detail. Also things with respect to Trump Tax and the changes that have occurred since the promulgation of tax laws back in December, 2017.

A recent article entitled: “Expat Americans Given 1-year Business Tax Reprieve”, it Is by Christopher Copper, independent journalist. It was published June 5th 2018. Quoting directly from this article "Expatriate Americans have been given a one-year reprieve from an unexpected levee in their overseas business interests in what many hope is a sign that Congress will fix the series of tax reforms signed in a law earlier this year by Donald Trump. The one-off tax of 15.5% is primarily aimed at persuading large corporations such as Apple to bring back profits to the US. Yet instead the tax has also caught small business owners who have described it as "ridiculous". Up to 1 million US citizens who hold more than 10% of a so-called "controlled foreign corporation" and living overseas were preparing to pay the tax in stages over eight years, or would have to pay the full amount if the initial payment was missed."

So basically want to take away from this. First of all check out that article. Again the title expat “Expat Americans Given 1-year Business Tax Reprieve”. It is rather interesting there is quite a bit more detail but I am going to just provide some general commentary on this. It is very clear that this sort of deemed repatriation was really genuinely intended for large multinational corporations. The problem is the way the law was written, or at least the raw law was written,  it was quite, well I found it rather difficult reading to say the least but it seemed to go ahead and scoop up rather small operations into this net so it would kind of be akin to going whaling and ending up picking up a bunch of guppies at the same time. As noted in the article, Apple has large cash reserves, presumably offshore from the United States, and this deemed repatriation stuff was going to have a substantial impact on that but should basically smaller businesses, SMEs, operated by American expats abroad be sort of tarred with the same brush. It does seem, I won't go so far as to go as far as to say "ridiculous", but it does seem like something that needs to be spoken to, it needs to be discussed and perhaps a more reasonable set of rules need to come into place especially keeping in mind that some expat businesses outside the United States, I meant here in Thailand you can have an expat owning a business that is like a Bar and Grill or a small restaurant and that is not a substantial entity and to sort of get sucked into this deemed repatriation for such an entity can be really debilitating for expats abroad so I am hoping that we are going to see some kind of like perhaps further legislation from Congress as sort of a "technical correction legislation. It will be really nice if that could happen before it becomes time to get to be dealing with the most recent tax year but that being said how that is going to go remains to be seen. 

The thing to take away from this is there has been a reprieve. I think it was a much warranted reprieve, especially for SMEs, and we will keep you updated with respect to further developments on this topic as things progress.