Does setting up a company abroad trigger a US filing?
Often, and not for the reason people expect. The filing is not about the company's profits; it is about the act of putting property into it. Subscribing for shares with cash, transferring equipment, assigning a trademark or moving a client contract across are all transfers of property to a foreign corporation, and the reporting attaches in the year the transfer happens. That is usually the year in which the company has done nothing and earned nothing, so nothing about the year itself suggests a filing is due. Build the transfer schedule while the formation documents are still in front of you.
Do I report cash I put into my own foreign company?
Cash contributions are within the reporting net, subject to the limits the form itself sets, and they are the ones most commonly overlooked, because a bank transfer into your own company does not feel like a transfer of property. Several contributions across a year may need to be considered together rather than each on its own. The practical advice is simple: keep a running schedule of every amount you put in, with dates, and what you received for it. Reconstructing that from bank statements long afterwards, across two currencies, is the expensive version of the same exercise.
What if I missed Form 926 for the year I incorporated?
The point stays live until it is dealt with, and the exposure is measured against the value transferred rather than against any tax, which is why a year with nothing earned and nothing owed can still be costly. The work is to establish what was actually transferred and when, from formation documents, share registers and bank records, then to value it on evidence rather than on recollection. Where the omission has an explanation the documents support, that goes in writing alongside the filing. An estimate with nothing behind it is worse than a late filing that is right.
Do I report transferring my business into a foreign holding company?
A transfer of shares, of goodwill, or of the trading assets themselves into a foreign corporation is the event this reporting is aimed at, and the file needs to say what went across, what it cost you, what it was worth on the day and what you received in exchange. Where the property transferred has risen in value, there are consequences beyond the reporting that depend on what moved and what came back, so the structure is worth settling before the documents are signed rather than afterwards. Valuation evidence contemporaneous with the transfer is the one thing that cannot be recreated later.
Does Form 926 apply to software or a brand I transfer?
Intangible property transferred to a foreign corporation is reported, and these are the transfers that most often happen with no paperwork at all: the code was written by the founder, the mark was registered in the new company's name from the start, and nobody recorded that anything had moved. Decide first whether the asset was ever yours before it was the company's, because that is what determines whether there was a transfer to report. If it was, the filing needs a description, a base and a value, and intangibles carry consequences beyond the reporting depending on what was transferred.
I paid in property in stages, is that one filing or several?
The year is the unit. Transfers made within the same year are generally brought together into that year's reporting rather than filed one at a time, and where a limit applies it can be reached by the tranches in combination when no single tranche would reach it alone. So the schedule matters more than any individual entry: date each transfer, describe what it was, and record what was issued in exchange. Where the tranches straddle a year end, the split follows the dates the property actually moved, not the date the funding was agreed.
Is double taxation illegal?
It is legal. Two countries can each have a valid claim on the same income — one because the income arose there, the other because you live there — and nothing prohibits both from exercising it. What exists instead is relief: tax treaties allocate the claim, and domestic law gives a credit for foreign tax paid. The relief is not automatic, though. It is claimed on a return, and unclaimed relief is simply lost. See how double taxation is relieved.
What happens if the two countries disagree about which of them can tax me?
The treaty has a procedure for exactly that. You apply to the competent authority in your residence country, which takes the case up with its counterpart, and the two negotiate a position that removes the double taxation. Some treaties add binding arbitration if they cannot agree. It is slow and it runs on documents, so the practical work is preserving the record and filing protective claims while the clock runs. See our treaty work.
