Boulder

Taxation in boulder

Other taxation in boulder

Sales tax

Taxable transactions

The US does not levy a federal value added tax or sales tax. Individual states and localities levy sales tax at various rates, subject to statutory requirements.

Anti-avoidance rules

Other

The US has numerous structure-specific regimes, including the anti-inversion and PFIC provisions.

Transfer pricing

The tax authorities may adjust income in related party transactions that are not at arm's length. Detailed regulations prescribe the scope, specific methodologies and principles. Documentation is required. Advance pricing agreements, both bilateral and unilateral, may be negotiated.

Disclosure requirements

Corporations with USD 10 million or more in assets are required to file Schedule UTP, disclosing information about tax positions treated as “uncertain” for financial statement purposes.

Controlled foreign companies

Certain types of income of controlled foreign corporations (CFCs) are included currently in the taxable income of "US shareholders" (US persons that own at least 10% of the foreign corporation’s voting stock). A CFC is a foreign corporation, more than 50% (by vote or value) of whose stock is owned (directly, indirectly or by attribution) by “US shareholders.”

Thin capitalization

The “earnings stripping” rules restrict the ability of US (and certain foreign) companies to claim an interest deduction on debt owed to, or guaranteed by, certain non-US related persons (and other related persons exempt from US tax). The rules generally apply where the debt-to-equity ratio of the payer exceeds 1.5 to one and the payer’s “net interest expense” exceeds 50% of its “adjusted taxable income” for the year. Disallowed interest that is not currently deductible may be carried forward and deducted in future years if certain conditions are satisfied.

Investment basics

Foreign exchange control

While there are no general restrictions on remittances of profits, dividends, interest, royalties or fees to nonresidents, sanctions and embargoes apply to listed countries and entities, with restrictions on foreign payments, remittances and other types of contracts and trade transactions. Regulations are prescribed by the US Treasury and the Treasury’s Office of Foreign Assets Control maintains related lists. Extensive currency transaction reporting and recordkeeping requirements also apply.

Accounting principles/financial statements

The US Securities and Exchange Commission requires publicly traded companies to file their financial statements according to US GAAP, which is set by the Financial Accounting Standards Board (a nongovernmental entity) for public and private companies and nonprofits.

Principal business entities

These are the corporation, limited liability company, business trust, partnership and limited partnership, usually created under the laws of one of the 50 states or the District of Columbia. US business also may be carried on directly by an individual (sole proprietorship) or a US branch of a foreign business entity.

Withholding tax

Royalties

Royalties received by a foreign corporation for the use of property in the US are subject to a 30% withholding tax, unless the rate is reduced under a tax treaty or the income is ECI.

Dividends

The gross amount of dividends paid by a domestic corporation to a foreign corporation generally is subject to a 30% withholding tax, unless the rate is reduced under a tax treaty or the income is ECI. Dividends paid by a narrow class of “grandfathered” 80/20 companies (a domestic corporation that derives at least 80% of its income for the three-year testing period from active foreign business (its own or its subsidiaries)) existing before 2011 are eligible for relief from gross-basis tax in the hands of foreign corporations.

Branch remittance tax

The US imposes a branch profits tax, as discussed under the “Taxable income” section of “Corporate taxation.”

Other

Any other income, gain or profit characterized as “fixed or determinable, annual or periodic” (FDAP) is subject to a 30% withholding tax, unless the rate is reduced under a tax treaty or the income is ECI. A nonfinal tax also must be withheld on proceeds from the disposition of US real property interests (10%) and by partnerships on their ECI allocable to foreign corporate partners (35%).

Interest

The gross amount of interest received by a foreign corporation from US sources generally is subject to a 30% withholding tax, unless the rate is reduced under a tax treaty or a statutory exemption applies. Interest that is ECI and certain interest on portfolio debt obligations, short-term obligations, bank deposits, bonds issued by state or local governments and debts of grandfathered 80/20 companies generally may be exempt from withholding tax.

Technical service fees

There is generally only a tax on fees for personal services, including technical services, if the services are performed within the US. If the services are performed in the US, such fees typically would be ECI.