U.S. Taxation of International Transactions

University of Illinois at Urbana-Champaign via Coursera

Go to Course: https://www.coursera.org/learn/us-international-tax

Introduction

### Course Review: U.S. Taxation of International Transactions on Coursera #### Overview The online course titled **"U.S. Taxation of International Transactions"** on Coursera is a comprehensive exploration of the various tax implications and considerations involved in conducting business on an international scale. As globalization continues to influence business operations, understanding the intricate world of international taxation becomes crucial for professionals navigating cross-border transactions. This course delves into critical topics including the taxation of U.S. taxpayers operating abroad, transfer pricing, controlled foreign corporations (CFCs), and the complexities of foreign tax credits. #### Strengths of the Course 1. **Expert Instruction**: The course is taught by seasoned professionals with extensive experience in international taxation. Their insights and real-world examples enhance the learning experience and provide participants with practical knowledge. 2. **Structured Learning Path**: The course is neatly divided into four rigorous modules, each designed to build on the knowledge gained in the previous one. This progressive approach helps participants comfortably absorb complex topics: - **Module 1: Introduction, Jurisdictional Principles, and Sourcing** sets the stage by familiarizing students with foundational concepts of U.S. international taxation, including jurisdictional bases and income sourcing rules. - **Module 2: Inbound Taxation, Treaties, Transfer Pricing, and Export Incentives** dives deeper into inbound taxation and treaty implications, emphasizing the nuances of transfer pricing and export incentives. - **Module 3: Controlled Foreign Corporations and Current Income Inclusions** introduces critical regimes such as Subpart F and GILTI, ensuring that participants understand their significance in business operations. - **Module 4: The Foreign Tax Credit** rounds out the course with practical guidance on mitigating double taxation through the Foreign Tax Credit, including strategies for efficient international tax planning. 3. **Practical Relevance**: The emphasis on current legislation and practices, including the Base Erosion and Anti-Abuse Tax (BEAT), ensures that learners are equipped with up-to-date knowledge that can be directly applied in professional settings. 4. **Interactive Learning Environment**: The platform encourages interaction among students and instructors through discussions and group projects, fostering a collaborative learning atmosphere. 5. **Flexible Learning Format**: Being an online course offers flexibility to learn at your own pace, making it accessible to professionals with varying schedules. #### Who Should Take This Course? This course is highly recommended for: - **Tax Professionals and Consultants**: Those looking to expand their knowledge of international tax issues will find this course invaluable. - **Business Executives and Managers**: Professionals involved in international business operations who need to understand tax implications for cross-border transactions can benefit significantly. - **Law Students and Graduates**: Students pursuing taxation or international law will gain essential insights that are pertinent to their field. - **Entrepreneurs**: Those planning to expand their business internationally can equip themselves with necessary tax strategies and considerations. #### Recommendations Overall, I wholeheartedly recommend the "U.S. Taxation of International Transactions" course on Coursera for anyone serious about understanding the complexities of international taxation. Its structured modules, practical insights, and experienced instructors make it an excellent learning opportunity for both beginners and seasoned professionals alike. Whether you are looking to enhance your career in tax, manage international business dealings more effectively, or simply gain a better understanding of the U.S. international tax landscape, this course offers the tools and knowledge necessary for success. Enroll today and take a significant step towards mastering the intricacies of international taxation!

Syllabus

Module 1: Introduction, Jurisdictional Principles, and Sourcing

In this module, you will first become familiar with the course, your instructor and your classmates, and our learning environment. This orientation will also help you obtain the technical skills required to navigate and be successful in this course. Next, we will begin our discussion of U.S. international taxation by discussing the baseline theories used to prevent international double taxation and the different jurisdictional bases for imposing taxation on international transactions. We will then discuss specific tests to determine when a taxpayer is a U.S. resident vs. non-resident. We will discuss system of worldwide taxation generally employed by the United States and major exceptions to that system. And, we will conclude with a discussion of how income is "sourced" to either the United States or a foreign jurisdiction using the sourcing rules of the United States.

Module 2: Inbound Taxation, Treaties, Transfer Pricing, and Export Incentives

In this module we will start with a basic introduction to inbound taxation issues, including a discussion of the Fixed, Determinable, Annual, and Periodical (FDAP) Income and Effectively Connected Income (ECI) taxing regimes. We'll then discuss the branch profits tax, which supports the ECI taxing regime. Next, we'll turn to understanding how tax treaties impact existing international taxation rules. Then, we'll cover transfer pricing issues, including a discussion of the new Base Erosion and Anti-Abuse Tax (BEAT). We'll conclude with a discussion of export incentives available to U.S. taxpayers selling abroad.

Module 3: Controlled Foreign Corporations and Current Income Inclusions

In this module we will be introduced to the Subpart F and Global Intangible Low Taxed Income (GILTI) regimes. These taxing regimes will cause certain foreign income earned by U.S. Shareholders through Controlled Foreign Corporations (CFCs) to be currently taxable in the United States. Specifically in this module we will learn to identify when a U.S. person is a U.S. Shareholder and when a foreign corporation is a CFC. We will also learn about what types of income constitute Subpart F. And, how GILTI is computed. We will conclude with a discussion of the Passive Foreign Investment Company (PFIC) rules which cover U.S. persons investing in foreign corporations that are not CFCs.

Module 4: The Foreign Tax Credit

In this module we will learn about how the Foreign Tax Credit mitigates the possibility of international double taxation. We will learn what foreign taxes are creditable for purposes of this tax. We will then turn to computing the Foreign Tax Credit Limitation, which ensures that foreign taxes paid or accrued are only used to offset U.S taxes on foreign income and not U.S. taxes on U.S.-sourced income. We will then discuss how the Foreign Tax Credit interacts with provisions we have already discussed (e.g., GILTI). We will conclude with a brief discussion of the Check-the-box Rules and how they impact international tax planning.