Dear Valued Clients and Visitors: As our nation responds to COVID-19, our firm is taking precautionary measures by closely following and reinforcing the guidelines from the CDC and local health authorities. Our physical office is open on a intermittent basis. However, please be assured that we are open for business and ready to serve your needs.

If you have a tax problem or inquiry please call and if we are not in leave a message. A return phone call will be made within a short period of time. Now is the time to address your tax matter. We remain committed to our clients and colleagues through these unusual times. Please stay safe and healthy.

Law Offices of Robert T. Leonard, APC
Free Consultations Available
Toll Free 888-408-9486

Are foreign earnings double taxed?

The great thing about small businesses in America is that they commonly don’t need a great deal of capital to start up, and they can react and adapt in much more of a nimble manner compared to large multinational companies. This is especially important when a small business attempts to expand into foreign markets.

However, with that expansion comes the potential for taxation not only in the United States, but also in the country where the business has a physical presence. This can be a huge complication; especially considering the potential for double taxation (i.e. paying a particular tax in a foreign country, then paying taxes on the same income in the United States). 

Indeed, this is a problem that has vexed large companies for decades. In recent years, this matter has led to a number of large U.S. companies pickup and basing their principal locations overseas, so that they can avoid the high corporate taxes in the U.S. And of course, a tax code overhaul is likely going to be a campaign topic next year; especially considering that some candidates (e.g. Chris Christie) believe that U.S. companies are being taxed twice on foreign revenues.

Christie’s tax concerns (with regard to how high U.S. corporate taxes are compared to the rest of the world) may be valid, but he may not be accurate when it comes to the taxation of foreign earnings. The U.S. Tax Code provides a tax credit for such earnings. So while it may be true that foreign earnings may be subject to tax twice, the credit acts as a savings that avoids and additional tax payment on the same income.

The preceding is not legal advice. 

No Comments

Leave a comment
Comment Information

Send Us A Quick Message

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Law Offices of Robert T. Leonard, APC

Woodland Hills Office
21700 Oxnard Street
Suite 2060
Woodland Hills, CA 91367

Toll Free: 888-408-9486
Phone: 818-224-7935
Fax: 818-587-3833
Woodland Hills Tax Law Office

Los Angeles Office
10100 Santa Monica Blvd.
Suite 300
Los Angeles, CA 90067

Toll Free: 888-408-9486
Phone: 818-224-7935
Fax: 818-587-3833
Map & Directions

Call Today