Cross-border tax issues

CFOs can exercise reasonable diligence to ensure that they have procedures in place to deal with some of the more common shortcomings in cross-border tax compliance. Here are some routine tax compliance situations that US companies ($500 million or less in sales) with outbound activities are most likely to encounter: 1. Ensure that intercompany working capital accounts to the parent company and among foreign affiliates are settled every 120 days or that market interest is charged on overdue receivables. 2. Document foreign payments at reduced or zero rates of withholding tax. 3. Address intercompany cross-border pricing issues. 4. Determine tax status of foreign affiliates.