Cross-border tax terms — F

The definitions here are unnumbered on purpose. A concept survives a budget; a threshold does not, and the two are easy to confuse once they sit in the same sentence.

Cross-border vocabulary is mostly a record of disagreement. Two countries look at one arrangement and classify it differently, and the gap between the classifications is where the double tax, or the unintended relief, actually lives. Every entry closes with the filings it touches, because a definition you cannot attach to a form is not yet useful.

Knowing the term is the first half. Knowing whether it applies to your year, and what evidence proves it, is the half that changes the outcome. Every page here carries the name of the person who reviewed it and the date they did.

• Factual resident — Someone resident in Canada because their ties are here in fact: a home available for their use, a spouse or dependants in Canada, and the economic and social connections that go with living somewhere.
• FDAP income — Fixed, determinable, annual or periodical US-source income — dividends, interest, rents, royalties — taxed on a gross basis by withholding at source.
• Foreign earned income — Wages and self-employment income for services performed outside the country.
• Foreign earned income exclusion — The US election that removes foreign earned income from taxable income, up to an annually adjusted cap, for a filer whose tax home is abroad and who meets one of two qualifying tests.
• Foreign housing exclusion — An additional US exclusion for housing costs abroad above a base amount, available alongside the earned income exclusion and computed by reference to it.
• Foreign tax credit — A credit for income tax paid to another country against the domestic tax on the same income.
• FTC basket — A category into which foreign income and foreign tax are grouped for credit purposes.
• Functional currency — The currency in which an entity or branch actually operates, and the basis on which its results are translated for a foreign return.
• FBAR — The report of foreign bank and financial accounts filed with the US financial-crimes bureau.
• FinCEN 114 — The form number of the FBAR.
• FATCA — The US regime requiring reporting of foreign financial assets by taxpayers and of US accounts by foreign institutions, backed by withholding.
• Form 8938 threshold — The FATCA reporting threshold, which varies with filing status and with whether the filer lives in the United States or abroad — and is tested on two measures, not one.
• Foreign affiliate — A non-resident corporation in which a Canadian resident holds a specified level of interest, bringing surplus computations and information reporting with it.
• FAPI — Foreign accrual property income — passive income of a controlled foreign affiliate, attributed to the Canadian shareholder before any distribution.
• FDII — Foreign-derived intangible income — a US deduction for income a US corporation earns from serving foreign markets.
• Form 67 — The Indian statement of foreign income and foreign tax that supports a foreign tax credit claim, complicated by India's fiscal year not matching most others.
• Form 10F — India's treaty information declaration, filed electronically to fill the gaps in a foreign residency certificate — which means a non-resident needs an Indian identifier first.
• Form 26AS — India's consolidated statement of tax deducted, collected and paid against a taxpayer's identifier.
• Form 5471 — The US information return for an interest in a foreign corporation, requiring foreign accounts restated to US principles.
• Form 5472 — The US information return for reportable transactions between a US corporation, or a foreign-owned US disregarded entity, and its related foreign parties.
• Form 3520 — The US return reporting transactions with foreign trusts and the receipt of large foreign gifts and bequests — an obligation missed precisely because the receipt is not income.
• Form 8865 — The US information return for an interest in a foreign partnership, including contributions and dispositions.
• Form 8858 — The US information return for a foreign disregarded entity or foreign branch owned by a US person.
• Form 926 — The US return reporting a transfer of property to a foreign corporation — including capitalising the company you just formed.
• FIRPTA — The US regime taxing a foreign person's disposition of US real property interests, enforced by withholding from the sale proceeds by the buyer.
• Fixed place of business — The classic form of permanent establishment: premises, equipment or a facility at the enterprise's disposal through which business is carried on.
• Foreign grantor trust — A non-US trust with a US settlor treated as grantor, bringing US information reporting and taxation of the trust's income to that settlor.
• Forced heirship — Rules in some legal systems reserving part of an estate for particular heirs, which can override a will drafted elsewhere.
• First-time penalty abatement — An administrative US waiver of certain penalties for a filer with an otherwise compliant history, requested rather than granted automatically.
• Faceless assessment — India's electronic assessment process, conducted without a designated officer meeting the taxpayer and on deadlines running from the notice.
• FEMA — India's exchange-control law, which defines residence differently from tax law and governs which accounts may be held and how funds may move.
• FCNR account — A foreign-currency deposit for non-residents, which removes rupee exchange risk and has its own tax and repatriation treatment.
• Form 15CA — The remitter's declaration of the tax treatment of a payment leaving India, filed before the bank will process the transfer.
• Form 15CB — A chartered accountant's certificate on the taxability and withholding of an Indian outward remittance, delivered under a banking deadline.
• Form 3CEB — The Indian accountant's report on international related-party transactions, mandatory regardless of transaction size.
• FC-GPR — The Indian reporting of shares issued to a foreign investor, due within days of the transaction and compounding if late.
• FC-TRS — The Indian reporting of a share transfer between a resident and a non-resident, on the same short clock as an issue.
• Fixed fee — A fee agreed in writing before the work begins.
• Form 1040-NR — The US non-resident return, reporting US-source income and income effectively connected with a US business.

What the F entries have in common

39 terms begin with F. What the entry under this letter turns on is set out on its own page, together with the returns it reaches and what we charge to handle them. Three to start with: Factual resident, FDAP income and Foreign earned income.

Nearby letters

E — 19 terms · G — 10 terms. The full A–Z lists all 297 terms in one place.

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