Cross-border tax planning
Operating across the US and Europe creates complex tax obligations. We help you navigate tax treaties, entity structure decisions, FBAR and FATCA reporting, transfer pricing, and exit tax, all coordinated with your immigration timeline.
What does cross-border tax planning cover?
Cross-border tax planning coordinates the tax rules of two countries (the US and your home country) so a move, an investment, or a US company does not trigger double taxation or an avoidable exit charge. It sits where immigration status, corporate structure, and personal finances intersect, and most of it can only be planned before you move, never retroactively.
Founders, investors, and executives moving to the US face the same core questions wherever they come from. Your visa status affects your US tax residency. Your entity structure determines how profits are taxed in the US. Treaties between the US and your home country may reduce or eliminate double taxation, but only if the treaty positions are claimed correctly on the US side. And many home countries impose their own charge when you leave: a departure or exit tax on unrealized gains, whether you are relocating from London, Amsterdam, Milan, Toronto, or a German-speaking country where the Wegzugsbesteuerung can reach the shares in your company. We advise clients worldwide from our seat in Frankfurt on the US side of that picture, and align the US tax structure with the immigration timeline it has to fit.
We advise on US tax law only. Whether a departure tax applies to you, and how it is calculated, is a question of the law of the country you are leaving: for German tax questions we refer you to a Steuerberater, and to the equivalent qualified adviser in other jurisdictions. The US side of the picture (treaty relief from the US perspective, entity taxation, reporting, and the US exit tax) applies regardless of nationality, and that is the side we handle.
How do tax treaties reduce double taxation?
Tax treaties assign taxing rights between two countries so the same income is not fully taxed twice. The US maintains treaties with most major economies, and these treaties can reduce withholding taxes on dividends, interest, and royalties, prevent double taxation of business profits, and determine which country has the primary claim on a given stream of income. Whether a treaty covers your situation depends on your country of residence, so we identify the applicable treaty and help you claim its benefits correctly.
Entity tax structure
How your US entity is taxed depends on its structure. A single-member LLC owned by a foreign person is typically a disregarded entity for US tax purposes but may still have filing obligations. A multi-member LLC can elect partnership or corporate taxation. A C-corporation faces double taxation but offers other advantages. We advise on the structure that minimizes overall tax burden while supporting your visa case.
FBAR and FATCA
US persons (citizens, green card holders, and tax residents) with foreign financial accounts exceeding $10,000 at any point during the year must file an FBAR. FATCA imposes additional reporting requirements and causes European banks to request documentation from account holders with US ties. Non-compliance penalties are severe. We ensure you meet all reporting obligations.
Transfer pricing
If your US entity transacts with a related foreign entity (intercompany services, licensing, cost-sharing), transfer pricing rules require that these transactions be priced at arm’s length. Failure to document and justify transfer pricing can result in significant tax adjustments and penalties.
Exit tax
Renouncing US citizenship or abandoning a long-term green card triggers exit tax provisions. The US treats this as a deemed sale of all worldwide assets at fair market value. Understanding the implications before making this decision is critical, and timing it with your immigration status changes can significantly affect the outcome.
Further reading
- Tax Implications of Owning a US LLC as a European Resident
- The US-Germany Tax Treaty: Key Provisions for Expats and Investors
- The Full Legal Checklist for Moving Your Business to the US
- How Do You Choose a US Immigration Lawyer From Europe?
- Streamlined Filing Compliance Procedures: Catching Up on US Taxes Without the Full Penalty
- How Do You Open a US Business Bank Account From Europe?
- Five Easy Steps to Renounce Your US Citizenship
- FBAR Reporting: A Guide for US Citizens Living in Europe
- FATCA Explained: What European Banks Need From You
- Exit Tax: What to Know Before Giving Up Your Green Card or US Citizenship
- How Does Your US LLC Structure Affect Your E-2 Visa Case?
- Which US state should you choose for your LLC: Delaware, Wyoming, or where you operate?