Fred Gander, Principal, KPMG LLP, and Head of the U.S. Tax Practice based in London, discusses tax trends, challenges and opportunities, and tips for C-level executives, when planning to invest in the United States.
These tax trends present wide-ranging opportunities and challenges for European companies. First off, the pace of change in the international tax arena is unprecedented. In my 30 years of practice, it's never been this fast-paced and this far reaching, the scope of change. And that presents, obviously, uncertainty and with uncertainty comes increased risk.
Companies are putting a lot of emphasis on their tax function, and it's important, I think, for companies to get that function sort of to the state of the art so that their tax group is—has the right skill set to meet the current demands and is, again, well-advised by external practitioners who have the depth of knowledge and experience in working with the sort of unique issues that European companies face when they're coming to America.
The top three things that I think European companies should think about as they invest in the U.S. marketplace, number one, is find an advisor that has the knowledge and experience that can help you as you confront the challenges of the U.S. federal and state tax systems.
Number two, plan ahead. It's important to get on top of these issues early on in the process, to think through exit options, alternatives if the law changes given the pace of change currently. And finally, I think it's critical that once you have a plan and you implement it, that you put in systems to monitor your continuing compliance with the documentation and the structure that you've implemented.
Too often we find that once the deal is cut and the structure is set that companies walk away and forget about ensuring that ongoing compliance with the conditions and terms that they put in place.
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The above information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.
The above information is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.