What tax problems usually turn up in a cross-border acquisition?
Rarely the income tax return. The exposures that matter in a cross-border deal are typically unfiled information returns, intercompany pricing with no documentation behind it, and withholding that was deducted from payments abroad and never remitted. All three share a feature: they do not appear in the target tax charge, so a review of the accounts alone will not find them. Diligence prices them, decides which are dealt with by indemnity and which by escrow, and shapes the acquisition structure so the buyer takes on a defensible base rather than an open one.
Should unfiled information returns go into an indemnity or an escrow?
It depends on whether the exposure can be quantified and when it is likely to crystallise. Exposure that arises per form can be counted, and where the years remain open it is the kind of amount a buyer wants held back where it can be reached, so an escrow sized to the count and released as the years close tends to fit. An exposure whose size depends on how an authority responds sits more naturally in an indemnity with a defined claims period. The work in diligence is to establish which filings are missing, for which years, in which jurisdiction, before arguing about the mechanism.
How do we check intercompany pricing before we buy?
Ask for the documentation first, and treat its absence as the finding rather than as a gap to be filled later. Then look at what the related entities actually did for each other, meaning which functions, which people and which assets, and compare that with how the charges were set. Where there is no support made at the time, the exposure runs in each open year in each jurisdiction the charge touches, and it is a pricing argument rather than a filing omission. That difference decides whether it belongs in the price, in an indemnity or in an escrow.
Do we buy the shares or the assets for tax purposes?
The diligence findings drive that choice rather than the other way round. Historic exposures such as missing returns, undocumented pricing and unremitted withholding attach to the entity, so acquiring shares acquires them and the protection has to come from the agreement. An asset acquisition can leave some of them behind, at the cost of a different set of consequences in each jurisdiction the assets sit in. The point of pricing the exposures first is that the structure can then be shaped so the buyer inherits a defensible base, with the cost of each option visible.
What happens to the target filings after the deal closes?
Integration has its own filing consequences in every jurisdiction the deal touches, and they are separate from the historic exposures diligence found. Changes of ownership, of financial period, of intercompany arrangements and of the people who take decisions all create obligations, and they arise at different times in each country. The usual pattern after closing is that someone assumes the calendars and the arrangements carried over unchanged. Map the post-closing filings jurisdiction by jurisdiction as part of the deal work, so the first period after completion is filed deliberately rather than discovered late.
Who pays for unremitted withholding discovered after closing?
Whoever the agreement says, which is why the finding has to be made before signing. Withholding that was deducted from payments to non-residents and not remitted is an obligation of the entity, so on a share purchase it travels with it. It is usually quantifiable from the payment records, which makes it a candidate for a price adjustment or an escrow rather than an open-ended indemnity. Found after closing, with no provision covering it, the buyer carries it and the argument is commercial rather than contractual.
Is moving money between my own accounts in two countries taxable?
Moving your own capital between your own accounts is not itself income, so the transfer is not what creates tax. What can create tax or reporting is the income the money earned before it moved, a foreign-exchange gain on certain holdings, and the reporting obligations the balances themselves trigger — foreign account and asset reports keyed to balances rather than income. Remittances out of some countries also need certification before the bank will send them. See foreign account reporting.
Do American citizens living abroad have to pay taxes?
American expats and green card holders need to file US returns for life, and many of them pay little or no US tax once the relief is applied — but the filing is what unlocks the relief, so the two questions have different answers. The exclusion for foreign earned income, the credit for foreign tax already paid and the treaty between the two countries between them usually leave the total at roughly the higher of the two countries' tax rather than the sum. Skip the return and none of it applies. See Americans abroad.
