Business Without Borders – International Business and Tax Planning Blog

In an attempt to improve the planning and security efforts of its clients, Verizon released days ago its annual Data Breach Investigation’s Report 2012. Conducted by the Verizon RISK Team in cooperation with the Australian Federal Police, Dutch National High Tech Crime Unit, Irish Reporting and Information Security Service, Police Central e-Crime Unit, and the United States Secret Service, the report carefully breaks down and analyzes global data breach statistics from 2011 in an attempt to recommend effective solutions designed to successfully prevent future breaches in 2012. The statistics cited in the report help illustrate how easy it can be for businesses to thwart possible data breaches, and identify which organizations are most vulnerable.

For suggestions on how to avoid data breaches, read the rest of this post at eLL blog.

AILA has just issued a follow up Practice Alert to the Alert of last Friday concerning the availability of EB2 visas for China and India.  The Chief of the Visa Control and Reporting Division at the U.S. Department of State, Charles Oppenheim has advised AILA that the EB2 priority date will retrograde to August 15, 2007, when the May Visa bulletin is issued.   According to the Alert, the USCIS will continue processing EB2 adjustment applications from China and India (which they refer to as “preadjudication”) if filed by the end of April.  The preadjuicated cases will be held as “pending” just in case the visa numbers reopen during the current fiscal year.  There was no mention of the EB3 regression dates in the Alert.  If you have been thinking of filing for EB2 and you are from China or India, this is not good news at all.  It is also not good news for U.S. employers who need the skills those who qualify for EB2 status have.    The U.S. will fall further and further behind in the international market place until such time as Congress wakes up and reforms this unpredictable and inefficient system of visa allocation.  Make the employer verify that it can not hire from the U.S. work force, but let the marketplace, not arbitrary numbers, govern the number of people who can come and  contribute to the economy of the U.S.

• Prosecutors in Brazil are filing criminal charges against executives from the U.S. oil company, Chevron Corp. and the drilling-rig operator, Transocean Ltd., accusing them of environmental crimes related to an offshore oil spill last November. Chevron reported a second leak on the sea floor last week which led the company to seal off production in the Frade Field. In addition to the criminal charges, the companies and their executives face heavy fines from regulators as well as an $11 billion civil lawsuit that was filed in January. The criminal charges may stifle further drilling plans by foreign companies in the petroleum-rich nation.
• S.E.C. officials continue to review the parameters of a proposed new Dodd-Frank regulation on a company’s use of “conflict minerals.” The S.E.C. is carefully considering who shall be covered by the conflict minerals reporting requirement. The new rule would require publicly traded companies whose products use certain minerals commonly mined in strife-torn areas of Central Africa to report to shareholders and the S.E.C., whether their mineral supply comes from the Democratic Republic of Congo. The purpose of the law is to cut off militia groups that have taken over the mining and sale of the conflict minerals to finance military goals. Due to the broad reach and use of the conflict minerals, which is in nearly every consumer product that includes electronic parts, companies are concerned as to just how they will audit supply chains and monitor the use of conflict minerals. The new rule impacts both the public companies who are subject to the reporting requirements and the private companies in the supply chain who will shoulder some of the burden of compliance.
• Further oil spikes may turn the global aviation industry’s already diminished profit forecasts for 2012 into potential losses of more than $5 billion. The fragile industry is vulnerable to market shocks such as Europe’s sovereign debt crisis or rising oil prices due to the increasing tensions between western nations and Iran over Iran’s nuclear program.
• The Transportation Security Administration is rolling out “Precheck,” an expedited screening process at certain large airports for preapproved travelers. The program allows background-checked travelers to zip through security screening with a format akin to airport screenings prior to the September 11 – passengers keep their shoes, belt and jacket on, their laptops and liquids in bags, and simply walk through a metal detector as opposed to a full-body scan. The program is currently available to frequent fliers from Delta Air Lines, American Airlines and certain members of Customs and Border Protection’s Trusted Traveler programs.

Guest Blogger: Vinay S. Navani, CPA, MBA, MST

New for 2011 individual income tax returns is IRS Form 8938, Statement of Foreign Financial Assets.  Enacted as part of the Foreign Account Tax Compliance Act (FACTA), this form is part of the trend by the U.S. government (and other foreign governments) to require more disclosure of assets held outside of the country.  Holders of foreign bank accounts should be familiar with Form TD F 90-22-1, Report of Foreign Bank and Financial Reports, also known as the FBAR.  Form 8938 is completely independent from and in addition to any requirement to file an FBAR.  The requirement to file an FBAR is not impacted by this new form.

Read the rest of this entry »

Previously, we published PART I & II of our series, Going Global: A Review of Critical Issues of Executive Mobility.  Here is Part III, another issue to consider when developing a Global Executive Mobility Strategy:

Tax issues related to the executive’s foreign assignment are complicated and can potentially create concerns for both the employer and the executive. For instance, the executive’s activities on behalf of the employer could potentially create a taxable presence in the foreign jurisdiction for such employer and thereby create the risk of double taxation. Different countries use multiple standards to determine a whether a “taxable presence” exists for Tax purposes. These issues are typically addressed in a Tax Treaty which attempts to standardize the circumstances by which an employer maintains a “Permanent Establishment” for carrying on a trade or business in the jurisdiction for Tax purposes. In addition, will the executive become subject to taxation in the foreign jurisdiction? Once again, Treaties generally define the terms and condition of residency and whether there will be tax on local-source income only or on worldwide income earned. US taxpayers are generally subject to taxation of worldwide income ( with a partial exclusion for certain foreign-source income and housing allowances and a foreign tax credit may be available for all or part of foreign taxes paid). Currently, theU.S. has entered into Tax Treaties with 68 countries. It is critical that these issues be fully analyzed by competent Host country and international tax advisors.

There are a multitude of issues that need to be considered in connection with the development of a Global Executive Mobility Strategy and a whole host of legal, tax, accounting and immigration law implications. This series of posts will highlights major issues to consider and suggests several potential Best Practices.  However, this series is by no means exhaustive, comprehensive nor complete. The author strongly urges anyone involved with these issues to consult with qualified legal and tax counsel before committing to any course of action.

UPDATE:
PART I. Going Global: A Review of Critical Issues of Executive Mobility
PART II. Going Global: A Review of Critical Issues of Executive Mobility – Immigration
PART IV. Going Global: A Review of Critical Issues of Executive Mobility – Employee Benefits and Executive Compensation Issues

Tune in to International Television, Inc. (ITV) on Thursday, March 29, 2012, at 3:30 PM, where Norris McLaughlin & Marcus tax partner Melinda Fellner Bramwit will discuss offshore income issues, as well as the IRS Offshore Voluntary Disclosure Program, in an interview with Renee Lobo.

ITV is available on Cablevision channel 244, Time Warner channel 563 and RCN Channel 476.

The rise of social media has ignited a societal change in how people across the world communicate and “stay in touch.”  These social networking websites allow users to create personal profiles, post comments, join groups, add contacts, and most important, find like-minded people with whom to share ideas, interests, and experiences. They give users the opportunity to link with others, both near and abroad, based on shared personal interests and business or academic affiliations.

However, in the business community, social networking also makes companies more susceptible to corporate espionage, i.e., “clandestine techniques used to steal valuable information from businesses.”  This is caused, in part, by the fact that “[t]he general informality of social media sites like Twitter or Facebook encourages employees to let their guard down and casually share information without thinking twice.”

Read the rest of this entry »