In today's world, more and more U.S. businesses are operating globally in outlook and reach. Moreover, companies are "going international" earlier in their life cycles compared to 30, 20 or even 10 years ago. Once a U.S. company becomes a multinational organization, the complexity of its business operations typically rises dramatically. This rise in business complexity goes hand-in-hand with a significant increase in tax complexity.
The reasons for the increased complexity can be attributed to several factors including: more complex transactions requiring more analysis and understanding to appropriately apply tax law; the existence of international transactions brings into play a whole set of complex international tax provisions within the U.S. code; and the existence of cross-border transactions means that tax laws in multiple jurisdictions, often with differing taxing methods and positions, must be navigated.
These factors can lead to uncertainty, and potential exposure, with regard to a company's tax liability. For companies in various stages of their life cycle some of the same international tax issues occur with great regularity. There are at least 10 international tax pitfalls to be wary of.
