Increase Sales, Profits Through Exporting

by Latin Biz Today

International Business Tax Tips

The U.S. government taxes citizens and domestic corporations on all of their income, including that generated by foreign enterprise. Generally, the U.S. allows a foreign tax credit for tax paid to other countries as long as the rate paid does not exceed that in the United States. For many years, any excess tax that is paid could carry over to future years’ tax returns. However, starting in 2011, President Obama cracked down on this tax credit, ending the deferral of tax on income generated abroad. This applies to businesses producing goods overseas, rather than companies that produce goods in the United States and export them.

  • The majority of international countries have a form of income tax that U.S. businesses are responsible for paying if they conduct business in that country.
  • To reduce the burden of foreign tax, the United States has tax treaties with foreign countries stating that the U.S. resident or company is not subject to that company’s income tax if the individual or company does not have a “permanent residence” in the foreign country.

Parting Words

A final tip that’s universal for every region and every language: know how to say “hello,” “good-bye,” “thank you” and “excuse me” in the local dialect. From “Ni Hao” in China to “Chao” in Argentina, knowing a few words in the local dialect is the fastest way to earn professional respect from your new business partners.

While international business expansion is not without risks, the potential for sizable growth significantly outweighs any challenges. Before expanding overseas, Hispanic business leaders must carefully research both the legal regulations and cultural customs that impact how a country conducts its business. With proper preparation, Hispanic small businesses will be poised for successful overseas expansion.