You, as a tax advisor, receive a visit from a potential client: the CFO of an investment group, Mr. Sergio Bejerano. His venture capital investment group has undertaken multiple international investments through one of the group's entities, a corporation named International Ventures Corp., with tax residence in Delaware. The investments made include: The acquisition of 100% of a Colombian company owning a solar farm. This company has paid two million dollars in dividends. The acquisition of 75% of an Ecuadorian company owning a wind farm. This company has paid four million dollars in dividends. The acquisition of 100% of a United States company owning an online payment platform. This company has paid one million dollars in dividends. The acquisition of 100% of a company with tax residence in Hong Kong dedicated to holding activities. This company has paid twenty million dollars in dividends. International Venture Corp. provides the following services: Financial advisory services, in terms of valuations, to a company with tax residence in Ecuador. The amount to be billed for such services is five million dollars. IFRS accounting advisory services for a company with tax residence in China. The amount to be billed for such services is one million dollars. Transfer of know-how to a company with tax residence in Colombia. For the transfer of know-how, it receives two million euros. Considering the above, Sergio asks for advice on the following issues: The tax implications related to dividends, both in terms of withholdings and in terms of direct taxation at the level of the recipient. The tax implications related to income from services and transfer of know-how, both in terms of withholdings and in terms of direct taxation at the level of the recipient. The main consequence derived from the repatriation of capital when the income is subject to withholding in the source country. Would there have been any difference if International Ventures Corp. had been an S-corp?
You, as a tax advisor, receive a visit from a potential client: the CFO of an investment group, Mr. Sergio Bejerano. His venture capital investment group has undertaken multiple international investments through one of the group's entities, a corporation named International Ventures Corp., with tax residence in Delaware. The investments made include: The acquisition of 100% of a Colombian company owning a solar farm. This company has paid two million dollars in dividends. The acquisition of 75% of an Ecuadorian company owning a wind farm. This company has paid four million dollars in dividends. The acquisition of 100% of a United States company owning an online payment platform. This company has paid one million dollars in dividends. The acquisition of 100% of a company with tax residence in Hong Kong dedicated to holding activities. This company has paid twenty million dollars in dividends. International Venture Corp. provides the following services: Financial advisory services, in terms of valuations, to a company with tax residence in Ecuador. The amount to be billed for such services is five million dollars. IFRS accounting advisory services for a company with tax residence in China. The amount to be billed for such services is one million dollars. Transfer of know-how to a company with tax residence in Colombia. For the transfer of know-how, it receives two million euros. Considering the above, Sergio asks for advice on the following issues: The tax implications related to dividends, both in terms of withholdings and in terms of direct taxation at the level of the recipient. The tax implications related to income from services and transfer of know-how, both in terms of withholdings and in terms of direct taxation at the level of the recipient. The main consequence derived from the repatriation of capital when the income is subject to withholding in the source country. Would there have been any difference if International Ventures Corp. had been an S-corp?
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 77EDC
Related questions
Question
You, as a tax advisor, receive a visit from a potential client: the CFO of an investment group, Mr. Sergio Bejerano. His venture capital investment group has undertaken multiple international investments through one of the group's entities, a corporation named International Ventures Corp., with tax residence in Delaware.
The investments made include:
- The acquisition of 100% of a Colombian company owning a solar farm. This company has paid two million dollars in dividends.
- The acquisition of 75% of an Ecuadorian company owning a wind farm. This company has paid four million dollars in dividends.
- The acquisition of 100% of a United States company owning an online payment platform. This company has paid one million dollars in dividends.
- The acquisition of 100% of a company with tax residence in Hong Kong dedicated to holding activities. This company has paid twenty million dollars in dividends.
International Venture Corp. provides the following services:
- Financial advisory services, in terms of valuations, to a company with tax residence in Ecuador. The amount to be billed for such services is five million dollars.
- IFRS accounting advisory services for a company with tax residence in China. The amount to be billed for such services is one million dollars.
- Transfer of know-how to a company with tax residence in Colombia. For the transfer of know-how, it receives two million euros.
Considering the above, Sergio asks for advice on the following issues:
- The tax implications related to dividends, both in terms of withholdings and in terms of direct taxation at the level of the recipient.
- The tax implications related to income from services and transfer of know-how, both in terms of withholdings and in terms of direct taxation at the level of the recipient.
- The main consequence derived from the repatriation of capital when the income is subject to withholding in the source country.
- Would there have been any difference if International Ventures Corp. had been an S-corp?
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
Recommended textbooks for you