By William Hamilton PBN Staff Writer Twitter: @waham
Gregory Cabral, a tax partner at Providence-based CPA firm Sullivan & Co., recently was selected as international tax consultant for CPA Associates International, a global accounting group. Cabral answered five questions about the distinction.
PBN: What is CPA Associates International?
CABRAL: CPA Associates International is a highly selective association of independent CPA firms that provide clients with professional accounting, auditing, tax and a variety of consulting services. The market-exclusive organization includes 146 members in 61 countries throughout the world, including 91 members in 58 foreign countries. Each member draws on the services of the association and resources of fellow members to better serve their clients and manage their firms.
PBN: How were you selected as the International Tax Consultant, and what is your role?
CABRAL: My role is to help member firms and their clients with U.S. tax compliance and issues related to foreign operations, maximizing U.S tax benefits related to foreign activities, and global structuring to minimize clients’ overall tax rates. I think that the organization liked that I have been on both sides of the table – in private industry as the director of taxation and controller of one of Rhode Island’s multinational manufacturers and in public accounting with more than dozen years at national accounting firms Ernst & Young and KPMG.
PBN: What have been the most compelling issues in the international tax arena in the last few years?
CABRAL: Multinational companies need to undertake effective tax planning to minimize their tax rate as governments and tax authorities are responding to globalization by zealously tightening regulations and imposing new taxes. Businesses need to stay current with U.S. tax compliance mandates for their overseas operations, including specific issues involving their parent organizations, subsidiaries, overseas bank account reporting and transfer pricing policies.
PBN: What is on the horizon for business owners considering expanding overseas?
CABRAL: First and foremost, business owners need to become familiar with the local laws, regulations and customs of doing business in the particular jurisdiction. Of course, from the U.S. side, the proper business structure must be in place, taking into account ways to minimize the tax burden while keeping administrative costs down. That said, there has been a lot of noise about revamping the overall U.S. tax structure for overseas operations. But, for now, things are quiet. Expanding overseas should be a sound business decision that ultimately will be more than merely a tax-driven decision.
PBN: What should business owners currently operating internationally be aware of?
CABRAL: The IRS currently has a voluntary disclosure program in place for taxpayers with overseas operations to “come clean” if they have not previously completed the required filings. This program is scheduled to end on Aug. 31, so I would suspect that once it is over, the IRS will make a very hard push to review and identify delinquent filings related to overseas operations. These delinquencies come with extensive monetary penalties and could even include criminal penalties.