What makes property developers different from an ordinary filing?
Development income is business income rather than capital gain in most systems, and a development project abroad is very likely a permanent establishment from the outset. An ordinary preparer applies the general rule and stops there, which is how the relief in the specific provision goes unclaimed.
Can you work with my existing accountant?
That is how most of these engagements run. They keep the domestic file, we take the cross-border piece, and the boundary is agreed in writing so nothing is done twice or missed.
Is profit on a development abroad a capital gain or business income?
In most systems, development profit is business income. A capital gain arises when an asset held as an investment is disposed of; a development is the manufacture and sale of a product, and buying land in order to build on it and sell is trading. Intention at acquisition is the usual test, supported by what actually happened: the finance structure, the planning applications, the marketing, the holding period. The characterisation matters because business income is generally taxed at full rates with no holding relief, and because it brings the project inside the business profits article of the treaty rather than the property article.
Does my building site abroad count as a permanent establishment?
A building site is the clearest case there is. Most treaties deal with construction sites specifically, and a project that runs beyond the period the treaty sets becomes a permanent establishment from the beginning of the work, not from the day the period is exceeded. That retrospective effect is what catches developers out, because by the time the threshold is passed the early filings have already been made on the wrong basis. Connected contracts on adjacent phases can be counted together. Assume the site is a permanent establishment and plan the filings from the first day of work on the ground.
How should profit be split between the land company and the builder?
By reference to what each entity actually does, what it owns and what risk it carries, supported in writing at the time. A land entity that holds title and funds acquisition is not performing the development; a build entity that manages the contractors and carries the completion risk is. If the split is simply a number chosen in the group's own interest, it has no support and the authority in the country where the work is done will substitute its own. The support has to exist as documentation, not as a rationale produced years later when the question is asked.
Do I charge local sales tax on units sold to foreign buyers?
Indirect tax on immovable property generally follows the location of the property, not the residence of the buyer, so a unit sold to a purchaser abroad is usually taxed where the building stands. The rules differ sharply between new build and resale, between residential and commercial, and on whether the developer can recover the tax incurred on construction inputs. That recovery position is the one to establish first, because it determines the real cost of the build rather than the headline on the sale. Model it into the pricing before the units are marketed, since the price list is difficult to change afterwards.
Can I deduct interest on funding lent from my home country?
Only within the limits the host country imposes. Interest paid to a related lender abroad is typically tested three ways: whether the rate is one an unrelated lender would have charged, whether the amount of debt is more than the project could have borrowed independently, and whether a general limit on interest deductions caps it regardless. The payment may also carry withholding at source. A structure that is efficient on paper because the interest is deducted in the project country and lightly taxed at the lender's end tends to be the first thing an authority looks at.
When does a plot bought for resale stop being an investment?
When the facts show a trading intention, which is usually earlier than the owner thinks. Obtaining planning permission, appointing contractors, arranging development finance or marketing before completion all point to trading. A plot genuinely held for rental income or long-term appreciation may remain an investment, but a change in what you do with it can change the character of the holding from that point, with a deemed disposal in some systems at the moment of the change. Record what the intention was and what evidence supports it at the date of acquisition, because that is the evidence the assessment will turn on.
Do I pay US tax on an inheritance from abroad?
A bequest is not income, so the receipt itself is not taxed. Reporting is a different matter: a US person who receives large gifts or bequests from a foreign person or estate files an information return for the year, and inheriting a foreign account or an interest in a foreign trust brings the account and asset reports with it. The penalties here attach to the information return, not to tax — which is why people who owed nothing still get letters. See Form 3520.
Do I pay tax when I inherit property abroad?
The inheritance itself is often not income to you, but three other things can create tax: the estate may owe tax where the deceased or the property was situated, some countries tax the recipient directly, and the gain from the date you inherit to the date you sell is yours. Reporting obligations can also attach to holding the asset. See inheriting property abroad.
