International Tax

As businesses of all sizes increasingly explore opportunities to expand beyond their traditional borders, international tax is becoming one of the fastest growing disciplines within tax law. BakerHostetler’s International Tax team helps clients to stay ahead of the curve in competitive global markets. We work with clients of all sizes to structure cross-border transactions and provide efficient and practical advice related to global expansion.

Our International Tax team is based in Washington, D.C., but also includes lawyers in various offices throughout the United States. Our team regularly works with a network of trusted global tax advisors that extends to London, Central and South America, Asia, and beyond. We partner seamlessly with these trusted advisors to ensure our clients the best representation in any jurisdiction. The BakerHostetler team embodies a multidisciplinary approach to international tax matters, bringing to bear more than 75 tax attorneys in addition to our deep bench of attorneys in various practice areas across the nation such as intellectual property, corporate law, international investigations, international government relations and international trade, and customs.

The firm’s International Tax team assists clients with multifaceted international matters, including structuring inbound and outbound business and real estate investments; cross-border mergers, dispositions and joint ventures; and reorganizing and restructuring multinational corporate groups. We work with clients to create centralized cash management centers; handle international controversies before the IRS and in the courts and handled forensic tax controversies, and devise specialized planning involving transfer pricing, foreign entity classification, foreign tax credits, foreign currency transactions, profit repatriations, and tax treaty issues. We have experience in taxable presence and permanent establishment exposure for corporations and private equity funds and have advised with respect to global hedging centers and hedging transactions, supply-chains, trading companies, contract manufacturing and a variety of international joint-venture issues, including corporate investigation and re-domiciliation transactions.

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Our team also has the sophisticated knowledge and experience to help clients evaluate their situation and strategize appropriate responses with respect to withholding tax issues including the Foreign Account Tax Compliance Act (FATCA), which was enacted by the U.S. in 2010 and is in the process of being implemented (see chart). The rules are designed to compel foreign banks, funds, brokers and dealers, trust companies and similar foreign financial institutions to collect and report information on their U.S. customers.

We are deeply involved in representing individuals, trusts, financial institutions, and companies in connection with foreign bank account reporting (FBAR) requirements and civil and criminal representation stemming from the Offshore Voluntary Disclosure Initiatives (OVDI). The multi-disciplinary BakerHostetler FATCA team understands how to deal with U.S. and foreign governments and includes former U.S. government officials from the Treasury, IRS, Joint Committee on Taxation, U.S. Congress, Department of State, Department of Justice, and Tax Court.

Select Experience

  • Advised a major U.S. private equity fund in connection with its international investment advisory structure, permanent establishment issues, and transfer pricing issues.
  • Advised on structuring and U.S. international tax issues in connection with a joint venture for the importation of Liquefied Natural Gas, perhaps one of the biggest transactions in the country/world in 2010.
  • Advised a global food processing and commodities trading corporation on several joint ventures, including a multi-billion dollar pan-Asian commodity trading structure.
  • Provided U.S. tax and corporate advice in connection with the restructuring of a U.S.-based publically-traded multinational company’s exchange and rentals business unit that involved five different European countries.
  • Provided U.S. tax advice on a several billion dollar, public acquisition of a multinational group of companies, including issues arising under the Foreign Investment in Real Property Tax Act and the passive foreign investment company regime, as well as certain unique potential consequences of the inversion legislation.
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Experience

  • Advised a major U.S. private equity fund in connection with its international investment advisory structure, permanent establishment issues, and transfer pricing issues.
  • Advised on structuring and U.S. international tax issues in connection with a joint venture for the importation of Liquefied Natural Gas, perhaps one of the biggest transactions in the country/world in 2010.
  • Advised a global food processing and commodities trading corporation on several joint ventures, including a multi-billion dollar pan-Asian commodity trading structure.
  • Provided U.S. tax and corporate advice in connection with the restructuring of a U.S.-based publically-traded multinational company’s exchange and rentals business unit that involved five different European countries.
  • Provided U.S. tax advice on a several billion dollar, public acquisition of a multinational group of companies, including issues arising under the Foreign Investment in Real Property TaxAct and the passive foreign investment company regime, as well as certain unique potential consequences of the inversion legislation.
  • Advised a Fortune 25 public company with respect to structuring a cross-border oil and gas joint venture including addressing U.S. trade or business and effectively connected income issue, title passage, and transportation income issues.
  • Advised a public manufacturing company in connection with a multinational acquisition, including performing international due diligence.
  • Advised a major media firm in connection with an offshore acquisition, including analyzing the effects of Sections 367 and 1248 on the seller.
Treaties
  • Provided advice and expert testimony in connection with the application of the U.S.-Australia Income Tax Treaty in connection with certain claims raised by the Australian Tax Authority in a bankruptcy case.
  • Reorganized the U.S. holdings of the U.K. subsidiaries of a Japanese bank in response to changes in the U.S.-U.K. treaty, including consultation with the U.S. Competent Authority to obtain relief.
  • Evaluated permanent establishment issues under the treaties with 13 different jurisdictions in connection with toll manufacturing operations for a major manufacturing firm.
Controversy
  • Represented a Public Commodities Company, 2013 on a tax refund claim in connection with a hedging issue.
  • Worked on behalf of a Public Company to receive two favorable private letter rulings from the IRS National Office for a regulated public utility, securing the company the benefit of a current deduction relating to renewable energy credits.
  • Received a 100 percent concession by IRS Examination Division for a worthless stock deduction, securing the company a deduction in amount more than $50 million on behalf of a Public Company.
  • Litigated with respect to whether severance payments due to involuntary workforce reductions qualify as wages for FICA purposes, similar to the Quality Store case, on behalf of a multinational and a leading global manufacturer.
  • Representation of a foreign corporate taxpayer in connection with whether it was engaged in a U.S. trade or business through a permanent establishment in the United States.
  • Representation of U.S. corporate taxpayers in connection with the taxation of the receipt of anti-dumping duties imposed on foreign corporations.
  • Advice to corporate taxpayers in connection with proposed adjustments on lease-in lease-out transactions involving tax-indifferent parties.
Financial Transactions
  • Created a U.S.-U.K. tax-efficient financing structure using notional contracts for an Australian banking concern.
  • Advised a U.S. branch of a foreign bank in connection with subpart F and effectively connected income issues in connection with a financing arrangement.
  • Advised a foreign securities trading firm in connection with effectively connected income issues and the characterization of total return swaps.
  • Analyzed a Netherlands Antilles finance company in the context of a sophisticated global cash management structure for a Fortune 100 manufacturer.
  • Advised a major investment banking firm and its clients in connection with the repatriation of earnings held overseas, including the effects of recently passed legislation.
  • Provided advice with respect to the U.S. income and withholding tax aspects of collection and repatriation of over $1.5 billion in U.S. assets for a high profile foreign financial institution in liquidation.
  • Evaluated and implemented a captive insurance company structure for a privately held manufacturing company.
  • Provided advise in connection with subpart F issues in connection with a currency coordination center for a publicly traded U.S. company.
Structuring
  • Restructured $100 million of debt on behalf of a Fortune 1000 client’s ownership business in Australia.
  • Advised as lead U.S. federal tax advisor on transaction including foreign tax credit implications associated with restructuring of Canadian operations.
  • Provided international tax structuring advice and analysis in connection with proposed exit of an Australian entity on behalf of a firm client.
  • Advised a Fortune 100 company on the implementation of a global holding company structure in Europe, Asia, South America, and Central America.
  • Advised a U.S. technology company on the efficient deployment of its intellectual property and manufacturing and service operations in connection with joint ventures in the Philippines.
  • Advised a computer software development company with respect to structuring its international intellectual property holdings and international sales and services licensing operation in the United States, Canada, Mexico, Europe, Asia, and Africa.
  • Provided significant U.S. tax savings for a public Canadian company by reorganizing its U.S. holdings, including obtaining a ruling from the Internal Revenue Service.
  • Designed an efficient foreign tax credit structure for U.S. investors in hydroelectric power in Brazil, working closely with a local Brazilian firm in determining available local incentives.
Transfer Pricing
  • Implemented a cost sharing arrangement and advised with respect to an offshore holding company with respect to intellectual property for a multi-national manufacturing company and separately for a multi-national hospitality company.
  • Consulted and provided transfer pricing advice and drafted relevant agreements in connection with an entertainment firm's services structure.
  • Prepared master services agreements for a global logistics and transportation firm.
  • Prepared master software license agreements for the charge-out of software fees for a major commodities firm.
  • Advised on the transfer of intangible assets and implementation of a cost-sharing arrangement for a privately held U.S. entity developing state-of-the-art data storage products with key personnel in Russia.
  • Consulted with accounting firms and provided advice in connection with transfer pricing studies prepared on behalf of a client in connection with novel transfer pricing issues raised by a transaction with no current market comparables.
  • Provided ongoing transfer price advice for U.S. subsidiaries of a large Japanese manufacturer, including advice about purchases and sales, the use of intangible property and research and development.

Recognition

  • Baker HostetlerChambers USA 2013 ranks BakerHostetler’s Tax practice among the leading practices in the District of Columbia.
  • Chambers USA 2013 ranks six BakerHostetler Tax partners among our California, Ohio and Washington, DC, offices.
  • BakerHostetler received a 2014 “Best Law Firms” National Tier 1 Ranking in the areas of Litigation – Tax, Tax Law and Trusts & Estates Law from U.S. News – Best Lawyers®.
  • Twenty-seven partners were selected by their peers for inclusion in The Best Lawyers in America© 2014 in various tax-related fields.
    Copyright 2013 by Woodward/White, Inc., of Aiken, SC.
  • 2013 Who’s Who Legal recognized two Tax partners in the area of Corporate Tax.

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Global Tax Enforcement
U.S. Signs FATCA IGA with Luxembourg
March 31, 2014
On March 28, 2014, the U.S. signed a FATCA IGA with Luxembourg.  Under the IGA, banks and other financial institutions in Luxembourg will report information about eligible U.S. customers’ offshore accounts to the Luxembourg tax...
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Global Tax Enforcement
Levin and McCain Urge DOJ to Seek Extradition of Fugitive Swiss Bankers
March 27, 2014
Bloomberg news reports that on March 18, 2014, U.S. Senators Carl Levin and John McCain wrote a letter urging the Justice Department to seek extradition of about 30 Swiss bankers and others who are charged with enabling offshore tax...
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Global Tax Enforcement
IRS Report Announces Major Increase in Criminal Investigations for 2013
March 3, 2014
On February 24, 2014, IRS Criminal Investigation (“CI”) announced the release of its 2013 annual report, which reflected a significant increase in criminal investigations and prosecution recommendations in the past year.  According to the...
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Global Tax Enforcement
OECD Publishes Standard for International Automatic Tax Information Exchange
February 17, 2014
On February 13, 2014, the OECD published a standard for the automatic exchange of tax information among governments, intended to help fight cross-border tax evasion. Under the standard, governments would collect information from their...
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Global Tax Enforcement
IRS Fighting Hard to Avoid Tea Party Class Action Claims
February 15, 2014
The IRS recently filed a motion to dismiss class action claims brought by Tea Party groups.  In NorCal Tea Party Patriots, et. al. v. IRS, et. al., S.D. Ohio, Case No. 1:13-cv-00341, Tea Party groups asserted that the IRS singled out their...
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