U.S. Gift & Estate Taxation for Non-U.S. Nationals – Tax Traps for the Unwary

In this article, KPMG professional R. Scott Jones, maintains that many people overlook the complex area of estate and gift taxation as it relates to foreign nationals subject to U.S. tax rules. Scott explains pertinent aspects of the U.S. estate and gift tax rules and notes that close examination of the particular circumstances with professionals experienced in international tax and estate planning matters may yield significant financial dividends.
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The U.S. Tax Implications of the F-1 Visa

KPMG professionals Loma Ince and Krist Kubat caution employers and their U.S.-inbound employees that proceeding without the proper regard for an individual's proper work authorization or continued compliance with U.S. immigration rules, can have detrimental consequences for both the employer and employee. They take a look at the tax consequences, in particular, for F-1 visa holders, and note that both the employer and the visa holder must confirm that the visa requirements are being substantially complied with to prevent undesired tax consequences.
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Ideas for Canadians to Consider for Mitigating the Tax Bite on Short-Term Assignments in the U.S.

In this article, KPMG Canada tax professionals Jim Yager and Simon Noronha explain why short-term assignments can be an expensive alternative for "positioning" Canadian employee talent in the United States. They examine some of the relevant tax laws in both Canada and the United States and how, by applying them carefully, one may reduce the tax burden on expense reimbursements associated with short-term assignments. However, if the specific requirements are not met, the benefits will be lost. Also, they mention that with appropriate use of the Canada-U.S. income tax treaty how it may be possible to mitigate the applicable tax rates.
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What Tax Factors Impact the Cost of an International Assignment? A Look at the 'Top 6' Financial Center Countries

Leann Balbona, in our New York office, writes about the tax costs of international assignments to some of the world's major financial centers. She asserts that when evaluating the cost of an international assignment, there are a few key factors that need to be taken on board. Leann analyzes the costs—particularly the tax costs—and offers a "summary" of the tax laws of the top six ('Top 6') financial center countries: Hong Kong, Japan, Singapore, Switzerland, United Kingdom, and United States, focusing on company-generated income including salary, bonus, and international pay allowances.
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U.S. and Japan Social Security Agreement: What It Means for International Executives and Their Employers

KPMG professionals Ben Francis and Michiko Saito comment on the new United States-Japan Social Security Totalization Agreement signed on February 19, 2004. They describe the Agreement's two main purposes: first, relief from double social security tax for multinational corporations and individuals, and second, the totalization of social security benefits. The Agreement is expected to come into force in 2005.
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Effect of the EU's Expansion to 25 Countries on the EU's Social Security Rules

The accession of ten new countries on May 1, 2004, and the growing pressure on the social security budgets of the member states of the European Union (EU), may increase the tendency for all member states to interpret the EU regulations in accordance with national interests, rather than the underlying principles of the EU. U.K.-based KPMG professionals Steve Mayled and Punam Birly focus on the main EU social security regulations and how they can be subject to very different interpretations – which can lead to confusion, but can also create opportunities.
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Alternative Minimum Tax – The Not-So-Hidden Tax

The U.S. tax law's alternative minimum tax (AMT) is often considered the "hidden tax" because most individuals are not aware of the tax or how it is calculated. It has been viewed by many observers as a burden on the wealthiest taxpayers. However, recent changes to tax law and the failure of Congress to index the AMT tax brackets and exemptions are pushing millions of taxpayers into AMT. As remarked upon by KPMG professionals Victoria Shateva and Rene Olson, this additional tax burden will affect not only the individual taxpayer, but will serve to increase the costs of international assignment programs as more and more international assignees become subject to this tax.
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U.S.-EU Trade Dispute Prompts New U.S. Legislation with Measures Affecting Individuals

The U.S. Congress is considering a number of revenue-raising provisions that would affect U.S. expatriates as part of legislation addressing a trade dispute with the European Union (EU). The Senate passed a foreign sales corporation (FSC)/extraterritorial income (ETI) replacement in May 2004, and the House of Representatives approved its own version in June. KPMG professional Joan Smyth highlights some of the provisions in recent legislation under consideration in Congress and how they would impact international executives and their multinational employers.
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Proposed Amendments to Section 877 Could Have Significant Effect on Long-Term Greencard Holders

Since the 1996 reform, the section 877 tax has been an unpleasant surprise for many greencard holders who never intended to make the U.S. their home after their assignments ended. KPMG professional Bob Rothery explains that it has been extremely important for employers to advise any employees whom they sponsor for permanent resident status in the U.S. of the possible consequences of future termination of their greencard status. It is equally important, he notes, that employers make it clear who will bear the consequences of such termination: the employee or the employer.
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Worldwide Digest

We are providing readers with a link to the IES practice's Flash International Executive Alert newsletters, which are archived right through the most recent issue on the IES Web site. Readers can scan the titles and select the news stories that are most relevant to their international assignment situations.
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