Introduction to International Taxation 2025 (presented by NYU School of Professional Studies) (Day 3)

This session covers the foundational rules governing how the US taxes foreign persons, including source of income determination, US trade or business concepts, and effectively connected income. Topics also include FDAP income, withholding taxes, FIRPTA, branch profits tax, earnings-stripping, and the base erosion anti-abuse tax (BEAT).

Tax treaties modify statutory rules affecting cross-border taxation in significant ways. This session explores typical treaty provisions, eligibility requirements for treaty benefits, and how treaties modify the tax rules that would otherwise apply to international transactions.

Cross-border transactions between related persons are subject to the transfer pricing rules of Section 482. This session addresses general rules and specific applications to tangible and intangible property transfers, services, loans, cost-sharing agreements, and the economic analysis underlying transfer pricing determinations.

Subpart F is the principal anti-deferral regime providing for taxation of US shareholders of controlled foreign corporations. This session explores CFC and US shareholder definitions, types of Subpart F income, exceptions and limitations, Section 956 inclusions, previously taxed income distributions, and the GILTI rules now renamed net CFC tested income.

The US taxation of shareholders in passive foreign investment companies is complex and often misunderstood. This session covers PFIC definitional provisions including the 75% income test and 50% asset test, alternative taxation methods, QEF elections, and the critical ‘once a PFIC, always a PFIC’ rule.

Reporting and disclosure are fundamental tools governments use to enforce domestic tax laws, with dramatically expanded requirements and increased penalties in recent years. This session details US reporting obligations for international investments and transactions, compliance penalties, and ethical issues confronting taxpayers and their advisors.

The US imposes worldwide taxation on US citizens, residents, and business entities while providing relief through foreign tax credits. This session explores how Sections 901, 904, and 960 provide for and limit the ability to claim credits for foreign taxes paid directly and indirectly, including recent OB3 changes to the 951A category and deemed paid credit haircuts.

Sections 367 and 7874 are intended to prevent US taxpayers from transferring assets to foreign corporations tax-free and to prevent US entities from inverting to become foreign owned. This session provides an overview of both sections’ mechanisms, covering gain recognition requirements, intangible property transfers under 367(d), stock transfer rules, and the 60%/80% inversion thresholds.

Foreign individuals investing in or moving to the US face complex planning involving income tax, estate and gift tax, and home country coordination. This session addresses determining residence timing, pre-immigration planning techniques including accelerating income and realizing gains, dealing with CFCs and PFICs, and trust planning considerations for inbound individuals.

This capstone session incorporates the disparate rules covered throughout the program into practical case studies dealing with both outbound and inbound investment scenarios. Topics include structuring foreign manufacturing operations, foreign persons investing in US real estate, US persons selling foreign property, and US-owned software development structures.