Hill Smith has a strong reputation for its focus on international tax matters. Our Taxation practice covers the range of all international business activities and taxes. We provide ongoing advice to multinational businesses concerning all U.S. federal income tax rules relevant to foreign operations, as well as specific advice concerning foreign taxation, with a particular focus on the countries of the European Union. We advise from the inception of business operations in a foreign country to the disposition of a business.

We work extensively with our clients on overseas business structures for start-up operations. This includes structuring distribution and purchase arrangements overseas that manage the overall tax burden. We advise concerning structures of sales and manufacturing operations in foreign countries to maximize the beneficial tax use of losses and to minimize taxation of transfers of assets outside the United States. In addition, we structure operations in an effort to maximize the possibilities for deferral of U.S. tax on foreign earnings. In this regard, we consider the classification for U.S. tax purposes of various foreign entities (such as corporations, partnerships and branches). We structure operations throughout the world, with a particular emphasis on the European Union countries. We also have substantial experience in structuring operations in Asia, the Middle East and South America.

We often advise clients about ways to reduce their worldwide effective foreign tax rate. Some of our techniques may include leveraging non-U.S. subsidiaries to reduce foreign taxes and increasing low-taxed foreign source income to utilize excess foreign tax credits. In this regard, we work with clients to develop capital structures and repatriation strategies for reducing worldwide taxation.

We are also frequently called upon to structure and negotiate acquisitions and dispositions by multinational companies, planning for the most tax-efficient structures from both non-U.S. and U.S. business and tax viewpoints. Typical issues include stock versus asset purchases, manner of ownership and the form of business entity. Acquisition planning ideas include leveraged holding companies to reduce foreign taxes and maximize cash flow flexibility and elections to treat certain stock purchases as asset acquisitions.

In today’s fast moving business environment companies may be motivated to reorganize their worldwide tax and legal structure for a variety of reasons. For instance, through a strategic merger or acquisition, or to realign a worldwide structure in order to effectuate a strategic spin-off, listing, divesture of business operations or to generate tax and legal efficiencies to improve overall earnings. This can involve sizing down a business, changing the country of operation or converting to a pass-through entity to obtain benefit of foreign losses. To meet our client’s objectives, we obtain tax rulings and work with foreign counsel to obtain all necessary foreign rulings and clearances.

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