Just weeks after the G20 Summit in March, the Obama administration unveiled their plan to reform international taxation in the United States with the White House press release titled "Leveling the Playing Field: Curbing Tax Havens and Removing Tax Incentives For Shifting Jobs Overseas". This press release prompted the following headlines:
- ABC News: President Obama to Call for Tax Changes for Corporate Tax-Avoiders, Out-sourcers
- Associated Press: Obama to Crack Down on Business Taxes
- Bloomberg: Obama Wants to End Tax Rules That Save Companies $190 Billion
- New York Times: Obama Takes Aim at Offshore Tax Havens
- Reuters: Obama Seeks Tax Changes for U.S. Firms Overseas
- Wall Street Journal: Firms Face New Tax Curbs: Obama Plan Aims to Limit Use of Offshore Havens by Multinationals and the Wealthy
Clearly, the tax landscape for US-based companies doing business overseas is about to change dramatically. It is time to include the USVI as part of your global tax strategy. Why?
1) The United States Virgin Islands is a possession of the United States, not a foreign tax haven.
2) The United States Virgin Islands is not considered a tax haven and is one of only two Caribbean countries identified on the OECD 'white list' of jurisdictions that "have substantially implemented the internationally agreed tax standard".
3) There are no bank secrecy laws that are being utilized to hide assets or transactions. The United States Virgin Islands is not about hiding money from the IRS, but instead about a legitimate, US-sanctioned program to provide incredible federal tax incentives in exchange for bringing much-needed business operations and jobs to the US-owned Territory of the United States Virgin Islands.
4) The United States Virgin Islands Economic Development Program is authorized jointly in the United States tax laws (Internal Revenue Code §934 & §937) and the United States Virgin Islands tax laws.
5) The United States Virgin Islands Economic Development Program creates jobs in the USVI.
6) The United States Virgin Islands Economic Development Program has been in existence since 1960 as a result of a federal mandate by the United States Congress and it firmly remains in existence today with US political support.
7) The United States Virgin Islands Economic Development Program offers competitive tax incentives, which include:
- 90% exemption on US income tax (results in a top federal tax rate of 3.5%)
- 100% exemption on 4% gross receipts tax
- 100% exemption on 0.75% real property tax
- 100% exemption on 4.2% excise tax
- 100% exemption on 7% US Customs import duty
- 1% VI Customs Duties instead of 6%
8) No need to defer income with a top federal tax rate of 3.5%.
The time is now to include the USVI as part of your global tax strategy. For additional information about Clearwater Consulting Concepts services, call (340) 775-2888 or allow us to contact you by completing our web form.
