Name: International Business Conference
Uploaded: 2025-12-17T00:31:03.459Z
Duration: 2 h 35 min 8 s
Description: International Business Conference

Transcript for "International Business Conference": Go on port today. We'll be covering mostly international taxes. You'll see how the conversations will revolve around supply chain, where production facilities are set up, how your companies are structured legally, tax purposes. So a lot of different impacts that taxes have on your overall business. And this is our second international business conference. Happy to say that, well, I was gonna say we have a better attendance than last year. We have a better registration than last year. Maybe it's a little cold, but we're supposed to have over a 100 people here, but there'll be more booths for us later. No problem. And thank you for the people who are attending virtually. Not a very convenient time zone, but, hopefully, we'll keep you engaged and you can stay awake. And, that'll be it. Thank you for attending that. So some, housekeeping. We have the QR code, I believe, is somewhere over there. Right? Where does everybody have that over there if you want? So do you wanna get CPA? The virtual attendees have to respond to only six questions for the time period. The q and a, just raise their hand. We'll have somebody come over with the microphone. And make sure you speak into the mic so people at home can hear you. And then speakers, please repeat the questions. So enough about housekeeping. Let me tell you about PKF, O'Connor Davies and PKF International Network. Now PKF, O'Connor Davies is a top tier investment I mean, investment advisory and accounting firm, it's a pretty slip there, with a long history of helping clients. Our roots went back to the eighteen hundreds. Actually, 1870, I think, something like that. And our tagline is no greater greater value. It's because of the way we work together, hand in hand, the the top of knowledge that we have, we have boutique style service to give to our clients. So we feel that that is our we have earned that tagline. We deliver practical solutions, to complex questions on a daily basis. Now those are not just marketing words, that's how we practice every day. I think that the people in the room that work with us, they know that's true. Now our firm and particularly for today, as the international tax department, we've grown significantly very much over the last few years. And it's because of the people that are in this room that have joined us, because of our PGAAP network that has grown substantially and all the bankers, advisers that we've met along the way. So where is the firm located? We have locations all up The U. S. East Coast from north to south for Boston, Providence, Stanford, New York, Philadelphia, DC, Southeast, sounds like a song, right, and also in the other five offices in India. So that together with the global PKF network is the way that we're able to provide services seamlessly for international clients. Now all of us here that you'll be seeing, I would say we attend meetings regularly internationally, we did in the past, each one of us have gone to meetings over time. We have personal relationships with the PDF members around the world. So we we deal with them, we work with them, we treat each other's clients as if they're our own clients. So you'll see that, you'll feel that when you work with PTF and you work with different offices. So this period of time is unique. We'll move on to what's going on today. All the talk is about tariffs, customs, things like that. These are issues that we deal with. And the reason why we picked our first speaker is because he is an expert in this area. He's been advising companies forty five, fifty years. He's a good friend of the firm. And let me introduce our first speaker, Frank Desideri. Right? Thank you, Leah. No. It's well, welcome. Thank you for being here. We're gonna be talking about tariffs, so I hope I'll keep you awake. But, it didn't used to happen that way, but now it seems that everybody is pretty much interested in what's going on in the tariff world. So I, I'm a founding partner of a law firm called Grenfell Diageo level with Silverman and Clystatt. We have focused on customs and international trade matters from the outset. Nothing else. Came to us to look at a lease came to us to look at a lease or do a will, you'd be in the wrong place at terms. Anyway, so that's what we do. We've had the pleasure of working with KPFOD, for for many years. They're a great asset to the team because anything we do, we like to do as a team, and not in a vacuum because we don't wanna do something for customs that's gonna create a nightmare of attacks and vice versa. So we generally organize a team and work together and we bring different skills and different solutions to any particular problem. So what I'd like to just talk about today, it seems that everybody thinks tariffs just came into effect last week. The second act of congress in 1777 was, a tariff and, probably to fund the salaries of the congress. And it was a principle. It was the exclusive source of income for The United States until 1913 when the international the the tax code came in. So, a lot of the historic case law has really been very strong in support of customs activities. For example, when you come through the airport, when you come into JFK, there's no need for a search warrant or any kind of warning. They have a right to search and seize anything that's coming in. So with with that background, you understand why some people may be a little harsh these days because they feel empowered by the fact that the history of the customs, service has been I've been working at it so long. It was the customs bureau, the service. Now it's the customs and border protection. That's essentially the same law and the same concept. And interestingly enough, people always make, comments about, the smooth hallway tariff of 1930, which apparently started the, you know, the depression. Not true. There was a worldwide depression in 1930 before Smoot Hawley. But interestingly enough, the statute we we quote in a brief is tariff act of 1930 as amended. So it's been around. It's not going away. And regardless of what happens in the Supreme Court, I think it's it would be foolish for anybody to think that tariffs are gonna go away. So I think one of the points I want to make today is that, this should be something on your mind if you're involved in importing, if you're involved in merchandising, if you're involved in retail activity, It's gonna be around for a while. It'll be different. It will change over the next couple of years. Hopefully, things will settle down over the next couple of months, but, you should be thinking about strategies to contend with tariffs regardless of what the duty rate is. So, you know, some of the issues that are pending before the court, and this is now before the Supreme Court, and the lower court two lower courts, they decided that mister Trump and the administration didn't have authority to impose tariffs, and tariffs are only imposed by, Congress. Not true. It may say that in the in the constitution, but over the years, the imposition of tariffs have been delegated to, the the the executive branch on many, many occasions, and nobody questions the authority to do it. And, one of the one of the arguments in the case is that, well, the AIPA statute under which these tariffs are imposed doesn't mention the word tariff. But there are a lot of other provisions of law, trade enforcement law like section two thirty two with copper and steel and and iron, and copper, steel, iron, and aluminum that impose tariffs and have imposed tariffs for forty years, and there's no mention of tariff in the in the legislation. So, there are trade remedies that have existed again, for many, many years. One is anti dumping, Countervailing duty. Anti dumping is when a country, sells product here in The United States, it less than it sells in the home market. Countervailing duty is there are legal subsidies that some countries, and, generate, and that puts us at a competitive disadvantage. So that's a classic example of a situation where the executive branch has been delegated duty and the responsibility for imposing tariffs. Right now, you know, we talk about some of the crazy numbers that mister Trump has thrown around, but, currently, mattresses out of Thailand are subject to rates ranging from 37% to 463%. In Vietnam, the countrywide rate for tariff for tariffs for mattresses is 668%. So these are real numbers. They stay in place for years and years, and there are opportunities to, to reduce those over the years. Solar panels, again, out of Cambodia, 651 tariff, Malaysia, 34%, Thailand, 375%. So what happens is, sometimes these production facilities migrate to other locations, but there are other ways to deal with it. Vietnam has 395% tariff. So the the the tariffs that are the subject of the great controversy now are tariffs that are, imposed by, Trump under a under the pro a law called IYIPA. It's the, I can't even I can't even remember the name. It's the executive blah blah blah blah blah. But whatever it is, it has to do with, unfair trade practices and the balance of trade. And so, there are people obviously who are are of the opinion that, this is not the solution for balancing trade. I've read the briefs for both cases, the lower court cases and the Supreme Court case. And I saw some of the I saw the legal arguments. And quite frankly, they were brilliant arguments on both sides. So it's not, it's not I'm not in a position to predict the outcome. The other interesting thing is the three zero one tariffs that were first imposed, by Trump during his first administration are still in effect against China. They were maintained by Biden. All the exceptions that, Trump allowed were, expired under Biden. So, again, it's another indication that these tariffs are here to stay. What the rate is, remains to be seen. Under the three zero one tariffs, they were 25%, 15%, sometimes seven and a half percent, but they were based upon specific tariff provisions. And the difference between the provision of law under which three zero one imposed tariffs and the AIPA, program is, the, other programs like two thirty two, like three zero one, were the subject of a long administrative proceeding where everybody had an opportunity to weigh in anti dumping, countervailing duty. Those cases go on for years and years, but there are administrative hearings all along the way to seek adjustments, to opt out, and so on. That is not true under this particular statutory provision. Again, section two thirty two, we have 25% tariff on steel, 10% on aluminum. It gets sticky when you have something that's made of aluminum steel or aluminum steel and and and glass. How do you how do you do that? There are no real outstanding directives even, you know, in calculating the value of steel. If you send, an angle of steel over its c's to make into a window frame, and it costs $5, Let's say it just cost $5 and a $15 product, but it costs $3 to manufacture into a fashion where it can be incorporated into the finished product. Well, what what value do you add? $8 or $5? Customs without really any authority and any, published opinion thinks it's the whole value. Cost of the steel, the cost of getting the steel to the location, of course, they're fabricating the steel to make it a useful component of the of the finished product. And, again, two three two three two is a provision that's designed to prevent American disadvantage on a security basis. And and they talk about products that are sensitive to our national security, which could be certainly steel and aluminum, but also textiles and make parachutes out of textiles. So that's historically been something that's been considered to be, of great national security significance. And there are you know, the other thing about the other proceedings like, three zero one, there are opportunities to seek ex exemptions or exceptions. That's not true here. Although, there have been about 1,300 provisions that are exempt, and that was probably a result of some consideration, perhaps some lobbying efforts. Most of the products that are exempted are food products, petroleum products, wood products, and so on. So and also certain types of technology. So I'm sure that Apple was in there negotiating hard and strong to get some of its items outside the scope of these, reciprocal tariffs. Other than the food and and the, precious metals and the, another term, materials or something that he's so concerned about, those who exempt from the retaliatory do duty. So there his idea is to get this product into the country in a sensible way, so that we're not at a distinct disadvantage. I mean, think about this in terms of the balance of trade. If you build a BMW in North Carolina and you ship it to Germany, the input employer pays 12 and a half percent duty. You build a BMW in The United States in Germany and you send it to The United States, the importer pays two and a half percent duty, and the shipper gets a VAT refund. So in essence, BMW can sell a BMW in The US cheaper than it can sell in a home market. So, you know, the war is over. You know, it's eighty years. We've been subsidizing a lot of these countries and there should be a balance. And that's what's it seems to be all about. And I could tell you what should in Europe and Asia over the last couple of months. And people are coming up to me and saying, you know, we don't like the tariffs, but, you know, what took you guys so long? You know, we've we've we've had this distinct advantage. We weren't pointing it out, but, it's appropriate. Again, we don't like it. We don't wanna pay anymore. We don't wanna cut our margins, but the reality is they understand that it makes sense in in the community. And that's one of the reasons that that there are some, deals being negotiated. And I I think that they will all be negotiated war. We had the chicken war. We had silly names, but we had the hormone beef war where, you know, you your advanced hormone beef, and we imposed during a certain period of time a 100% duty, and that went away. But, you know, it was all done diplomatically, and eventually, we get to somewhat the right place. But to this day, even though Europe has lost in the World Trade Organization because they find there's no evidence that hormone beef does any harm, the Europeans still ban hormone beef. There are some small exceptions and we've kind of reduced our retaliatory duties. But there was a time when we were imposing 100% duty on a lot of food products, truffles, cheeses, pork products, anything that was sensitive out of Europe. Today, the the problem with the tariffs today is that it's it's already I'm very, very reluctant to quote the current tariff to anyone even when they call the office on the phone simply because it could have changed this morning. I can tell you that I've given a number of presentations scheduled for the afternoon. And lo and behold, at 08:00 in the morning, everything's changed. I'm scrambling, to deal with PowerPoint revisions. But so that's the stress. I mean, that's the stress under which my clients operate. Everybody in this room is involved in business. There's nothing worse for business than uncertainty. Sometimes the client will even be willing to accept a bad an unpleasant answer, but they can plan around it. So when you're planning two or three years in advance for production or expansion and you don't know what tariffs you're gonna be paying, it's it's it's it's a little stressful. And then you also have a situation where, you know, in in America, a lot of we've we've lowered the prices. You know, I started practicing law. The the tariffs on jewelry were 55%. They went down to 5%, and they went down to zero. So now you have a generation of senior and middle management people in Europe and Asia who haven't had to contend with with, tariffs. And classic example is the duty on a dime or a cut dime, whether it was 11,000,000 or 5,000,000, was zero. So if you bought your girlfriend or wife a diamond ring that was $5,000,000 because the stone was so expensive, you could easily bring it in at a very low rate by separating the setting from the diamond and importing them separately. So instead of paying five and a half percent on 5,000,000, pay five and a half percent just on the casting, which may have cost 2 or $3,000. So and there and and there are a lot of we do a lot of things like that. And, you know, civilians call them loopholes, but they're opportunities in tariffs. So when the three when the three zero one and, of course, they they call your tax planning loopholes. When the tariffs first came in under the Trump administration, he rolled them out by commodities. And one of the first commodities was air conditioning units that was subject to 25% duty. So I had a client who made these, two part air conditioning, units which you've seen in restaurants and so on where there's events on the inside and there's a compressor on the outside. We did some research and, realized that if you employ the out outside portion on one boat and the inside portion on another boat, They became classified as parts of air conditioners, and at the time, parts of air conditioners were not covered by the by the, tariffs that were imposed. Now that went away eventually as he rolled out the tariffs, but my client had a a 25% advantage, against his competitors during the first eight or ten months. Again, during the other under the other tariff provisions that were imposed, There were hearings. There were opportunities for exemptions. We had these hearings down in Washington where people from the Department of Commerce, Department of Labor, Department of State, customs, Special Trade Representative's office. They were prep there are people present from every one of those offices. They were all 12 years old, but but they were they were represented, and they came to a conclusion based upon a good deal of information. That has not been true under the AIPA tariffs. But having said that, there are about 1,300 provisions that have been exempted from the reciprocal tariffs. Mineral products, inorganic acids, plywood, charcoal, printed materials like books, platinum, gold, certain copper products, and so on. So there isn't a formal procedure for get these exemptions, but, there may be if these tariffs are upheld. Okay. So we talked about, kind of the history of the world here. Well, let's talk about you know, can I get a bottle of water, Chris? Oh, there we go. Thank you. It's a little dry. Thank you. So what are we talking about now? We have two lower court decisions, federal court decisions that says that the executive branch branch doesn't have the power to impose tariffs. Under this law, it's clear the president has the the power to do it where it's been delegated by congress. But again, like the anti dumping, like the three zero one, there are long proceedings that had to be followed. So the question is, can the, can the president impose these tariffs under this provision of law? And that's that's the case that's before the Supreme Court. So as I said, I've read the brief side. I heard the oral arguments, very valid arguments on both sides, so I'm not even think about predicting, what the outcome is. But let's talk about the possibility of having these tariffs completely eradicated as a result of a court decision. If you're an importer, you have to develop a strategy. How do you protect your right to refunds? Quite frankly, right now, nobody really knows. So, there are a couple of suggestions that we make, but you don't wanna be in a situation where you were entitled to a refund and somebody at the government says, well, we would have given you the money except for the fact that you just didn't do this. So there are a couple of strategies that we recommend. One is following the court action in the Court of International Trade that will protect your interests for those refunds. You know, it may be unnecessary. Maybe the court says the tariffs are illegal. Press a button and give the money back to everybody. Highly unlikely. I mean, at least the the button pressing. You know, I I was at the Department of Justice, when the the, and I worked on this case actually when the Nixon surcharge went in, 10% across the board. And quite frankly, I thought that, you know, even though I was representing the government as a young attorney doing a very small component of the case, I think the final decision in Supreme Court revolves around the fact that they didn't wanna give the money back. Now that was this much money. What's at stake here is this much money. So that might be a consideration. So there might be a resolution where the court says, these things are illegal. These tariffs are illegal under this provision of law, but we're gonna keep the money, and we're gonna eliminate them for the future. That's a that's a distinct possibility. But I think, quite frankly, I think the appropriate resolution would be to refund all the monies if indeed they didn't have the authority under this act. So what we're suggesting is that you file for anybody who has money at stake, file a court action to preserve their right. There's another, possibility that, another way that we get back money from the government is file administrative protest and that you file within a hundred and eighty days of the time that the entry is liquidated, and that preserves your right. I'm not sure that's a remedy, but we're suggesting is about government's suspenders approach. You do both, file a protest and, have this court action. And hopefully, neither one will be necessary and we'll say, that's okay. It was very nice you did it, but it wasn't it wasn't necessary. It's a relatively small investment considering the the the monies involved. Another comment is, you know, the IEPA is, based upon an extraordinary and unusual and persistent activity that is coming from outside The United States and is endangering The United States. Now the courts have dealt with that very casually, and they've said it's not unusual. It's not, coming from the outside of The United States and few other things. I think the fentanyl part of that problem, I think it's hard to argue that it's not unusual and it's not a big threat to United States. So it could be split. The fentanyl tariffs could stay in, and the reciprocal tariffs so fentanyl could go away and the reciprocal could stay. So there are so many variations on the theme, but one way or other, if you file a court action, and you and you file the protest, you'll be protected. This case has nothing to do with the two thirty two, assessments. It has nothing to do with three zero one assessments. It has nothing to do with antidumping or countervailing duty. So those tariffs will stay in place. This case has nothing to do with any of this. We have filed an action in the court against the first imposition of the three zero one tariffs, and we we've got many we've got about 4,000 cases in the Court of International Trade. We can still file it for people who are interested. I think it's a long shot, but, again, the investment is something that's worth making if there's any possibility. And people and there are people, financial institutions that are buying the rights to refunds in both of these cases. So there's some smart money who thinks, there's gonna be a success. So, I'm not smart enough to comment on that, but, it's something you should know about. So let's get down. So I'm pretty close to the end. I think I'm pretty close to the end of my twenty minutes, but I think that, you know, there are strategies that should be considered. Tariffs are not going away. So whether it's separating the air conditioning units, I'll tell you my favorite case is and we do a lot to design products to minimize duty. For example, under the the, beef hormone program, We imposed a 100% duty on a lot of food products, including, canned tomatoes. And we had a lot of clients who were importing canned tomatoes. And we sat down with them, and we said, you know, can you put a little oregano in and maybe a little olive oil and a bay leaf? Because if you can do that, we can get it classified as a sauce preparation instead of canned tomatoes, and it wasn't subject to the 100% duty. I'm telling you, I've had tens of millions of dollars on it. So it's better to do if you can plan in advance. So, you know, I do a lot of work with fashion companies. Sometimes I design ladies footwear because depending on the material. Thank you, Craig. So I'm not designing gonna you wouldn't like my designs. So my designs revolve around changing the materials that are used and the structure of the shoe, to minimize the likelihood of a 37 and a half percent, ad valorem assessment instead of 10. So I might say put a wooden heel, put a put a leather sole, put a plastic sole. And the and the designer may say, Frank, take a hike. And that's not unusual. But they also may say, well, you know, if I have that information, I can plan around it. And certain shoes, they can they can absorb it. They're well, not absorb, but they can get it from their client 37 and a half percent. Other people will say, you know, I can't sell the shoe if I'm paying duty at that price. So there's a lot of lot of loopholes around, a lot of opportunities to, minimize the duty. It's perfectly legal. It's not legal in the EU. This this kind of strategy that I'm talking about would be considered circumvention, and it would be illegal there. So when I'm over in Europe and I'm promoting, some of these programs, they look at me like we don't wanna go to jail. I said, I'm not doing this in Europe. I'm doing this in the in The United States. Again, there were many, many trade wars. We've lived through them. Nobody noticed noticed them. I'm I assume that we're gonna get through this one with some pain along the way, but I think everybody who has a client that's in the importing community should be, focusing on strategies to minimize the impact of, the adverse decisions that are made by the federal government. I thank you for your attention. I'm here to answer. And the first thing? One question, Frank. I think it's on everybody's mind. Everybody talks about who's actually absorbing the tariff. My contractor said I should pay for the full amount of the tariff. I said I'm not paying the full amount. I'll pay you 50¢ pay 50% of it on it. I've heard in other speeches and presentations that it's one third by the producer, one third by the seller, one third by the consumer. Who's actually paying for these tariffs? It's it's it's a combination of everything you just said. I mean, in in Asia, especially China where the tariffs have been pretty, you know, hundreds. There are other other tariffs there, not just the AIPA tariffs. And I think what's happened there is the factories in China have taken a little hit, and the importer takes a little hit. And, of course, the consumer does. But if the money comes back, it's not going back to the consumer. You know? So I was interested during the during the discussions of extending the tax exemptions or the tax provisions, and nobody seems to think that that would, you know, the removal of those tax benefits would be inflationary. I don't think any of those companies are gonna pass on tax benefits to their consumers. So same thing here, you know, at the end of the day, the people who got the money back for the canned tomatoes didn't send it to the local grocers. They didn't send it to the housewives or the husbands that are making the the sundae sauce. So I think it's it's hard to predict, but the reality is there'll be some modification, but, no one person is gonna receive the total benefit unless they're just completely outlawed and the importer gets the money back. Okay. Thank you, Frank. Okay. No problem. The floor, please. Yes. Well, global mobility is quietly becoming one of the hottest topics, I guess, in tax, in business, commerce, etcetera, where, I guess, since COVID, a lot of companies are finding out that their employees are not working in The United States. It's a merchant company. They might find an executive. They might find the president There's no one working at this is laughing because we know stories of companies that say my president and co executive teams in Canada do have to pay tax there. No. Why would you have to pay tax in Canada? You're not doing anything there. So that's the reason why we put together this elite panel of, two people from my firm. We have an immigration attorney. I'll let everybody introduce himself and somebody from Henley and Partners. I will let Eve Olayovsky do all the introductions. So let's welcome Eve and the panel. Okay. You're welcome. Can you still see the panel? Thank you. Thank you. Okay. Hello? Can anybody hear me? Anybody hear me? Are we there? Thank you everybody, for joining us today. I'm Evgenia Believskaya. I am an international tax partner at PKF, Akana Davis here in New York City. And, to Leo's point, a lot about what we see is, in addition to what we do, here at PKF, Akana Davis and as part of international tax team, and that's assisting multinational companies, that's assisting families, ultra high net worth individuals, high net worth individuals, and just expats in general, to go into The United States or leave The United States. It's, not really surprising to everybody, that there is this sense of freedom that people have, that they don't have to be tied to one spot for a long time. But with that freedom, there's always a catch. Right? And that catch is what we're gonna talk about today. That's the global mobility. A lot of our, colleagues and, just friends, if I may, now, do a lot in, in the global mobility world, and I will let them introduce themselves. We'll start with, Margaret. I will let you introduce yourself, but, also, I have a question for you. And that question is, what do you see, in current US policy and how that impact individuals and just families or businesses who are coming to The United States, and generally your thoughts on current situation. Does it work now? Yes. It does. So, hi, I'm Margaret Sawatzka. I am a corporate immigration attorney representing private clients and corporations. I have been doing this for over twenty years. And when we had our initial meeting at the beginning of the year, I said, well, you know, might not we might not have that many changes. God. I was wrong. Yes. Never a boring moment in my practice, seriously, Since I'm also representing a lot of three d traders, I basically get a phone calls every second day about the tariffs and what now we should do, how this is going to be, who is gonna be taxed. Can I come? Can I bring my family? What about the gold card? What about the platinum card? Can I bring my family? What about the Venezuelan employee that I had on the work permit for five years, and now he's telling me that he's gonna be deported tomorrow. So that's basically my daily life. Then I'm getting a phone call from my major client, the big corporation, saying, listen. I have 10 employees on the plane from India, and they are afraid to leave the plane because they are they don't have 100 k each to pay for h one b. And, basically, frankly, we have more questions than answers. Let's start with the h one b's and this famous 100 k. Honestly, we don't know. Nobody paid yet this 100 k. So we don't even have a single case that we can refer to. Yes? So, we are also trying to sue, but we cannot find a plaintiff because nobody wants to be a plaintiff as an employer saying like, okay. We're gonna go against the government. This is discriminating against us. So we cannot file a case for discrimination because we cannot find a single plaintiff. So at this point, we honestly don't know what's going to be. Whether this 100 will apply also to none of our profits. I mean, apparently, we can apply for exceptions to that rule of 100. But what kind of rules will we have to follow? We don't know. We're getting conflicting informations. Nobody paid yet this 100 k. We don't even know to whom we would have to pay this 100 k. There's there's no form. There is just we don't know. Simply. Everyone is panicking because the lottery time is coming in April, And, we simply don't know if the mandate will find out. We will inform our clients. But at this point, the only advice I can say, like, okay. Let's see what's going to happen. Now another big topic, as you know, last night, finally, the famous gold green card was released. So I printed just out 25 pages of the application form. And I'm looking at it, and I'm like, how do I know that? It's exactly the same form as we are filing for extraordinary ability businessmen and for national interest waivers. The only difference is that you have to pay 1,000,000. So why would you do that? Taking out the consideration that to show that you are extraordinary ability businessmen, you be on have to be a level of mask or bezels. Yes? But if you're on the level of mask and bezels, and if you want to come to The United States immediately, I will get you a old visa as extraordinary ability, businessman, then apply for your green card, proving that you are just brilliant. You don't have to pay 1,000,000, and you get the green card. Exactly. If it means that you're not brilliant. So so so, honestly, I've been we I've been going through that form, and I'm just like, where's the catch? Where's the loophole? What what's the story? Then if you are not extraordinary ability, then you apply for the national interest waiver and you pay 1,000,000. Yes? But the national interest waiver, which is e b two category, is backlogged eighteen months. So what about this super quick green card if you have to wait eighteen months? Yes? Again, what's the point? I mean, I can apply for the national interest waiver. And if I really, really prove that you are so fantastic, I can get you all, or maybe I can play with the e visas. So, again, it's not I still cannot understand that, to be honest with you, and none of us ask. I mean, I'm a member of the American Immigration Lawyers Association. Since last night, since midnight, there was already about 3,050 posts of confused lawyers who were like, what is going on? I mean, are we missing something? So everyone is looking at the website, and we still don't understand. What's the difference? How this is going to work? So it seems to be that we have more questions than answers. Yeah. We would definitely and and and then this platinum green card is being introduced. Right. That's, mister Latnick's child who says, well, if you pay 5 millions, we will let you to have a green card in America. You can stay up to two hundred sixty days in The United States, and you don't have to pay any taxes. Thank you. Thank you, Margaret, for your help. I mean, it's a lot of things to cover, I know. And, I wanna get our other presenters to weigh in on that because it's very tightly connected to what we're talking on the technical side as well. Chris, can you tell us a little bit about yourself as a person from United Kingdom, and also tell us what you see in the current policy and how people can stay compliant? Yeah. Absolutely. Hello, everybody. My name is Chris Hall. I'm a director here at PKF OD. I've been working in, global mobility for best part of thirty years now, helping executives, individuals, and families move around the world. Thankfully, I think tax is a little bit clearer than immigration at the moment. We don't have quite as many rules being thrown out as the the we don't come with guidance. There's a few things about the electronic refunds and things like that. But, generally, you know, from a from a tax perspective, things are relatively calm compared to immigration. And the the the the main thing with coming to The US, what we've seen over the years is is a trend. The tax system is is largely the same. You you have and it's I've worked all around the world. The tax system is the same in most countries in that it's really a process of identifying what's taxable income, taking what your deductions are, and then applying the rates. Just about every tax system in the world is the same. Where we see differences in The US in particular, that system is is very confusing for foreign nationals coming in. Firstly, because we have 50 states that can either or choose not to impose their own taxes. So that's something that's very unusual for people coming in. The main thing though that I think we've seen over over the last, certainly, fifteen years of my career is is very much a push towards more compliance through the taxation system. So there is a the once you have done all of that in terms of identifying your taxable income and your deductions and then putting it through the rates, what you then have on top of that is a whole, vast array of reporting requirements. Now most of the people in this room may not know about these, and that's part of the challenge because a lot of these reporting requirements are in relation to foreign assets. So if you have foreign bank accounts, foreign pensions, a foreign trust, a foreign business, all of these create what can only be described as pretty arduous reporting. I mean, you if you actually look at some of the forms, you know, it'll it'll say at the bottom of every tax form, oh, it should take you this long to research and this long to fill in. Some of the international forms are literally like, oh, this might take you a hundred and fifty hours to fill in, you know. It's incredible. And the the shocking thing in a lot of these cases is that it doesn't actually change your tax bill. It's just a lot of reporting that you need to put on to declare your foreign assets. And that's a very easy thing, I think, for foreign nationals coming in to miss, because there isn't a sign at JFK saying, hey, if you move into America, make sure you declare your foreign bank accounts. And so we spend a lot of time, even I particularly, seem to have had a bit of explosion in the last couple of weeks of people who have not done this properly when they first come in, and that becomes then a painful process of getting people through and back to compliance. And really when you're doing your tax return, and next time you do your tax return, if you if you do your own, look at the bottom of schedule b, which is where you report your interest in dividends, and there's a little question about foreign bank accounts. And that's basically the only clue on the regular tax return that you may have this requirement. And so it's it's very much important, particularly if you're an employer bringing people in, you have to think about that duty of care of how much education do I need to give somebody when they're coming into The US about what they have to do from a reporting perspective. It's very clear from a tax perspective, usually, but the reporting is where we see most people fall down. And also, this is where we make most of our money. Yes. Right? Okay. Oh, substantial penalties. Yeah. I mean, it's, you know, depending depending on, the nature. But some of these forms I saw on the other day, like, for supposedly filed it was with the tax return, but the IRS think it was filed filed late. $25,000 flat fee. One form for one year. And then you multiply that by, say, a number of different accounts, a number of different businesses, you can get very substantial penalties very quickly. That's right. That's right. We usually, I usually feel that I'm a cleaner at everyone else's tax affairs because it's a lot of, it's a long process to get them on board. And, also, there's a lot of educational, aspect to it because not a lot of people know, as Chris mentioned. But with that, I do want to move to John who, has been a great partner of PKF Econo Davis. John is from, Hanley and Partners. And one of the questions that we mentioned at the beginning, John, was, the introduction of the Trumbull, card and maybe from your perspective. Because your firm is not a an immigration firm. It's not a tax, firm. It's not an illegal firm. But maybe from your perspective, you can tell us how does that affect Americans, and just American clients in their interest of trying to find another residence outside of The United States? Testing. That's love. Like I said, thank you guys for having me. Thank you, Eve. Thank you, Leo. As a quick introduction, at Henley and Partners, we work with high net worth and ultra high net worth individuals, particularly here in The United States, looking to establish citizenship and residence outside of The United States. So where Margaret and Chris are working mainly with inbound clients, we're actually working with outbound clients. And this isn't really a case of relocation. This isn't a case of expatriation, which is exception more than it is the norm. We work with clients that are looking to increase global mobility and less renowned citizenship. And the idea is it's more about access. It's more about flexibility. It's more about long term risk management. So when something like the Trump card comes out, it just increases the conversation a million fold. Like you said, in in the online forum. Right? The all the it raises more questions than it does answers. So for American clients and the clients that we deal with, we're already in The US. It's not doesn't really affect us from, you know, any regulatory or legal perspective, but what it does do is increase conversation. And then they realize, hey. With all of these changes coming, with all of the conflict with politics these days, Why am I not looking at my own options? Why am I not looking at something outside of The United States and developing a hedge and developing my own mobility plan? If all of these people are coming into The United States for this opportunity, shouldn't I be looking at my own mobility options as well? Thank you, John. Appreciate it. I know that you you're a worldwide firm. Right? So a lot of it is coming into the The Americas. It's a sort of a new business. And tell me how many applications have you left in this year. So since so I would say that investment migration has never really been an industry that's really focused on American citizens. Right? Pre COVID, I think it was maybe four percent of our clients were American, American citizens looking outbound. And this year, American clients are 45% of Henley's business. So the demand has exploded. Our team has doubled in size this year alone only in The US. We've helped well over 500 families this year alone establish citizenship and residency somewhere outside of The US. Great. Thank you. Thank you very much. On that topic, I do want to move a little bit to back to Chris, to you, and maybe you can tell us a little bit as part of the global mobility business, what do, global companies what do they have as part of their discussion on how they're going to compensate individuals who are coming to The United States? And, also, that's one of the hot topics. Right? We see that all the time, the RSUs. And, also, tell us a little bit about, The US tax requirements and just the mistakes that you see employers do. Yeah. Absolutely. And I think, you know, one of the one of the one of the sort of difficult things with global mobility is, each each country will write their own tax rules independently of others, where there is a treaty network and there is an overarching organization, the OECD, that looks and tries to level out those. But certainly, in the world of compensation for businesses when you're paying people, there's a lot that is country specific. And certainly, when you're dealing with The US and you're bringing people into The US, you have to be very careful because what you're effectively doing is importing somebody's, compensation package into US rules. And the way that The US and lots of other countries write their rules, is very much based on US compliance, as you can imagine. And so what we see when people are moving into The US from other countries is we see a lot of, compensation plans, whether that be stock options, deferred compensation, pensions that simply don't work here because they don't fit into the same structure that the IRS has put in place. For example, a four zero one k plan has certain rules that it has to meet. It's very, very rare to see a foreign pension plan meet those rules and qualify as a US plan. In fact, it it barely ever happens in there. So, okay, the fallback is it's fine. We've got treaties with all these countries. Right? Well, yes. But there's only a few that will actually address the treatment of a pension. And so there are others that we have to be careful of and just make sure that when somebody is coming in, they're aware of what what they're importing at the same time. In a worst case, you may have a pension plan where your employer is contributing. That can be taxable. Your contributions are not deductible, and you're also gonna get taxed on the income within your pension while you're here. That's worst case scenario. Again, there are certain different treaty provisions with different countries, but that's the sort of thing that we have to be be careful of. So if you are importing people, again, it comes back to this education at the beginning of what am I opening up myself for. And Leo and I are working on an article at the moment where one of the examples is is these things called EMI options from The UK. If you execute those properly in The UK, you get a 10% tax rate. If you if that business owner moves to The US and becomes a New York citizen, that 10% can go to basically nearly 50. And so if you've got somebody who's coming up for an event and they're like, hey, we need to expand our business into The U US. They have to be very careful about what they're importing at that time through through compensation matters. And the worst case is if you're an employer in that situation and you put somebody in that in that position without really educating them or seeing them, well, if you don't report it properly, you're gonna get impounds. And then if it's your top star performer, what are you gonna do? Are you gonna turn around and pay that extra tax bill? And some people will do that, but then when you add a gross up on top of that, it gets very expensive very quickly. So you just need to make sure you know what you're doing before you bring people in. Thank you, Chris. And, to to just add to that, a lot of those executives who are coming to The United States, they have to have and that's going back to you, Margaret. They have to have a certain amount of compensation that's part of their immigration application. We talk about h one b or a certain level of individuals who are coming to The United States. And maybe you can tell us from the immigration standpoint, what do individuals have to do in order to comply with h with h one b requirements and not to fall out of the compliance? Yes. So, different visas have different rules. H one b visas are regulated also by the Department of Labor. So first, you have to find a labor certification for a potential employee that basically gives you the minimum salary that you have to pay to specific employee. And the Department of Labor is classifying salaries from the level of one to four. And, frankly, these days, under Trump administration, in order to get the h one b approved, you have to be at least on the level three to pay employee in order to show that this is a seasoned experienced employee, and you are not discriminating against you as workers. So the employer must pay this minimum salary to the employee. And the minute the employee leaves the the company, you have to make sure that this labor certification is withdrawn because the employee, frankly, can sue the employer for unpaid wages. So, this is kind of like a complex situation. Other visas, strangely, like, for example, e visas, o visas, actually don't have the labor certification requirements. Also, the intracompany transfer visas don't have the minimum salary requirements. However, to bring the executive to The United States, you better offer enormously high salary. Is that controlled actually by the anyone? No. So, let's assume we're saying that the employer employee is making 500. However, when we're going for the renewal, if the employee is not making 500, that's questioned. But with the l visas, which is very strange, there is actually no rule. There's a loophole. The employee does not have to be paid in The United States as long as it does not meet the days that he or she spends in The United States. So the employee can be on the payroll on the company abroad, and if does not spend enough time in The United States, technically does not have to pay taxes here. Same applies to the e visas. So the whole thing is depending really on the on the type of visas. But with my colleague's situation, very curious how his clients going to are reacting to this new proposal of senator Moreno about forbidding Americans to have a dual citizenship. Is that going to be affecting his business? Because this is kind of really interesting story. What a hot topic. It's been. It's I again, I'm not American here, but I think that it's the fourteenth amendment that allows you to have, you know, dual citizenship. And it I think it'd be a little bit tough to get Melania out of the country and the baron out of the country as well. They're both dual citizens too. So we're all above, I think. I think so. International panel. Thank you. In Italian courts right now. Thank you, John. Thank you very much. This is what's happening, right, politically. That's that's what's driving the change, and that's what we have to, educate our clients on, and people always have questions about that. In order to, move forward in our discussion, one of the final things that I wanted to cover and, is when people are leaving United States. We have a lot of conversation about, you know, people not having, their say, the love affair with The United States has ended. Right? So we I personally had a lot of experience working and together with my colleagues on individuals, not high net worth individuals who brought in a lot of cash from outside of The United States in the nineties and the 2 thousands and, 2010. And then they realized that now that their business is all outside of The United States, they now have to pay tax on this worldwide. And with the current geopolitical situation, the treaties are being eliminated for many of those individuals and families. So what do you do? Right? Because you have a treaty that would originally would protect you from the double taxation. Now you don't have that treaty. So a lot of families are trying to give up their citizenship, and they're they're no longer want to stay in The United States. They're pretty happy with their family members to remain in The United States, but then themselves, they can have a visa and travel the rest of the world and have a citizenship somewhere, Malta, for example, or, Portugal is was was very popular recently. New Zealand. New Zealand. New Zealand is coming up. It's too bad. It's too remote. Well exact well, exactly. So to talk talk more, let's just, talk a little bit more about the outbound. Right? So, Chris, I wanna give you the, opportunity to talk about what do people do? What what do they need to do when they're talking about the what is the exit tax, and what are the repercussions of not paying it? Yeah. Absolutely. So, if you're if you're here on a Visa, it's relatively straightforward. You'd once you leave, you can break your residency and you end your US tax filing requirement if you're just on a Visa. It's it's relatively straightforward unless you have ongoing, say, US source income, maybe a rental property or stock options that relate back to a time you were in The US. What the what the IRS has come up with, for citizens and some green card holders, they're generally long term green holders. For those that are deemed to be covered expatriates, which is there's a a wealth tax, which is basically 2,000,000 of wealth, which is not a huge amount. If you have that amount of wealth, certain other clarifications, you know, qualifications as well, but you're deemed on the day you wanna give up your green card or your citizenship, you're deemed to dispose of all of your assets, on that day. Worldwide assets, not just American assets. You do get an exemption of about I think it's about $870,000 of of exemption on that gain. And then and then but then anything over and above that, you have to pay capital gains tax on, for the privilege of giving up of your green card. And it's like, okay. Or or your citizenship. And people are okay. But, you know, a lot of the times I've I've done this a number of times. More for green card holders, I must say, than than citizens. And, John, I'll ask however many actual citizens you see given up. But, you know, generally, with that 870,000 of exemption, and if you manage it properly in this planning, it can be done. But there's a lot of hoops to jump through, and it is difficult. One of the the other things which, if anyone has any serious questions, I'm gonna defer to Joe in the corner over there on gift tax. He's our expert on on gift tax. But if you give up your green card, and then subsequently to to each point, you still got family in The US, it's very difficult to gift or bequest anything back to them because they then can get hit with a 40% tax. And unlike a state and gift tax, it's actually paid by The US person receiving the gift. And it it's that's pretty harsh. So, Joe, I know you put an article out recently. I don't know if you wanna mention it. Yeah. I mean, Chris is right here. Section twenty eight zero one, that was just enacted. And finally, the temporary regulations became final. The covered expatriate rules are in effect now. So the new form seven zero eight is in its draft form to be released as of twenty twenty six's tax filing season. If you have a situation in which you are subject to the exit tax, you've paid the capital gain, you said goodbye to the Hotel California, sorry, you can't leave. If there are people still checked in, anything above the annual exclusion, you're running a foul of the section twenty eight zero one inheritance tax, in which case you could get out of the tax two ways. Either the person that gifted you the money has paid the gift tax on your behalf, which might be another additional gift to you. So we run a carousel circle of how much tax is being paid. Or, you file a seven zero eight yourself for the money you received, and you take the 40% hit on the money that came in. So it is extremely punitive, you know, from outside The United States coming back into The US, as far as gift taxes are concerned, and it's probably something that's gonna be a bludgeoning area in the next couple years now that it went final. So Thank you, Joe. We can handle things like that. We'll see as they come in over the next couple years how it's gonna affect. But if you have any clients at all that are in that covered expatriate status in any means, tell them to be very careful about who they're gifting back to The US for. Yeah. And I'm I'm right. They're they're not covered. Right? They don't they don't so if they can get them under the 2,000,000? Sure. If you could get outside The US without paying that covered, becoming that coming part of the covered ex patriot regime, then, yeah, fine. So what you do is you gift all of your money to your children and then leave and then hope you can survive in your new country without any money. So Yeah. You try you try planning for you all. That's free, guys. Take that one with you. Try to get it out of your name or into in a a trust itself, a domestic trust on the way out because, you know, as United States citizen, we have starting in fifteen, sixteen days, 15,000,000 each to gift out. That's lifetime. You know, you could start, you know, planning in advance by maybe taking portions of it and putting into a trust. So there's a lot of planning to be done. We work with a lot of firms, international law firms to do this as well, and we'll we do it back and forth. So, it's out there, something to be mindful of, and it's something people get caught up in the back end. Thanks, Joe. Sorry to put you on the spot there, but No. That's what I thought. That's good. That's what he's good at. Alright. So I think we're wrapping up. And, John, I wanted to give you an opportunity to just talk about what you see. That's not a future vulnerability, but what do you see on your end and where people are moving? Any feedback you can give us about what countries they're considering. Yeah. Absolutely. I think you listed a few of them that were really popular, like Portugal, Malta, New Zealand. Those are the ones that grab the headlines. But a lot of the other ones that are maybe less headline grabbing are countries in The Caribbean. Costa Rica has been incredibly popular for us this year. And I did want to address your point on expatriation, Chris. Fewer than 2% of our clients actually expatriate. I have you know, I've helped hundreds of families over the over my time at Henley. I've had one family actually go through the whole process of expatriating, and this was in 2021 right when COVID first started pre Trump, Trump two, I should say. And this client, expatriated, went about, and I lost contact with them. We got them a passport in Antigua, which was, you know, a a wonderful program in a wonderful country that offers citizenship by investment. And they relocated there. And I got a call from them a month or two ago, and I hadn't heard from them in a long time. And I'm like, oh, hey, mister client. Like, how are you? He goes, John, I'm I'm great. You know, I'm so happy. We we love our life in Antigua. It's been amazing. But, you know, I I need I need your help. I'm like, sure. Like, how can I help you? Do you want another passport? I'm very happy to help. Right? But he asked me, John, I actually need some documents from my original application. I'm like, sure. Why? He goes, well, I wanna go visit my family in The US, but I need to apply for a visa now to get back home. So this whole future of global mobility, just to to address your question, I think that, you know, there were something like 60 different elections over the past two years around the world. Our our marketing team called it like the Super Bowl of Elections. And the idea is that more and more families are looking at this as a different part of their global mobility strategy, of their estate planning strategy, of their financial planning. The idea is that you wanna have access to more jurisdictions. You know, we we a lot of our clients think in terms of generations, and the idea here is that it's very politically driven these days, but, you know, is The US political situation gonna get better in three years? Is it gonna get better in eight years? Is The US gonna be The US in fifty years? Is, you know, the US dollar gonna be the strongest currency in the world? You never know. How do you mean to say Yeah. And the idea here is that, you know, Dubai was a desert fifty years ago. Singapore was a swamp. A hundred and fifty years ago, Switzerland was one of the poorest countries in the world. So these countries that think in terms of generations do wanna give these clients, sorry, that think in terms of generational legacy that they're gonna provide, providing access to more than one jurisdiction is the move. Having putting your trust in multiple governments is the move. And diversifying, I guess. You know, you don't put all your trust in in Tesla stock even though it does really well. Why not trust, different governments as well? So what you're telling is that everybody will need a few accountants and accountants in every country? You'll need PKFs and tickets. You got me. Thank you so much, guys. Appreciate it. Just to finish, I have to agree with Joe. Like, we can be very punitive with taxes. We can be very punitive with immigration. When you give up US citizenship and then you change your mind or you give up your green card and you've not done it properly, getting back, I've done it number of cases, is not fun. It's actually really kind of hostile situation. It's not like, oh, I gave up. I can get it back. Not that simple. Just as a prewarning to your clients. Thank you. Excellent. Thank you very much. Nobody in this panel will be here in two years. Alright. Minimum tax? I'll introduce you again. You wanna stay here? Anyhow, I'll just I'll do a bunch of stuff. Thank you. Hello? We have quite a crowd up here now. Very diverse group. Well, there's something called global minimum tax, that's OECD, pop up taxes. These are all terms you might have heard about. They generally affect bigger companies, larger companies. It's €750,000,000 in gross revenue. There's various procedures, disclosures, reporting that's required for these companies. We see it on many of our larger clients, some of our public clients we see it, but the medium sized companies are not directly affected by it. Our panel will be discussing pillar two, the current state of affairs. So when Peter and I did a presentation about ten years ago, we did a comparison of the, BEPS rules in pillar one, pillar two to the US CFC rules. They were fairly in line. They're pretty much the same rules. Just a couple of tweaks, but we were ahead of the game. We were probably our role started ten years before that. Now we have GILTI in those other regimes. But this has been in the works since, I think, 2015 or '16. So I see the updates, the headlines. I yawn. I roll my eyes and say it's never gonna happen. But it's coming it's coming true. Bigger companies are preparing for it. With that, I'll introduce Peter Bam who will introduce this panel. So good afternoon everybody. Sorry, Leo and welcome. And I wanted to thank our early panelists and Frank for their presentations. They're very enlightening. By show of hands, we're we're talking about pillar two. I just wanna know how many people in this room have have understood pillar two, are working with pillar two, know what pillar two is. Okay. Good. So I thought it would be good to give you a little bit of a background of what we're talking about to put some context and welcome to those online as well. So what is pillar two? Pillar two is the answer from the OECD perspective of a global minimum tax. Global minimum tax meaning 15%. Okay. And who does it apply to? It applies to companies with greater than $750,000,000 worth of income. Well, you said that's a pretty high threshold, but how do you measure that $750,000,000 so that's the first question that you're gonna hear as a common theme as we go through this panel today and talk is $750,000,000 is the global revenue, but measured on a financial statement basis, not on a trial balance basis. Okay? So you might be a taxpayer who's paying on a cash basis, but the financial statements run on a accrual basis. So and it's worldwide. So we start to say, well, what are the financial statements prepared on and what grouping of entities? So you could also have financial statements that aren't prepared on a consolidated basis. So the first kind of challenge is getting your arms around the data. And are you a U. S. Company, a U. S. Multinational, are you a non U. S. Multinational that has U. S. Subsidiaries? They both have this problem and that's kind of what we're talking about. So first one, it applies to a lot of companies, but many of the people that are in The United States aren't familiar with these terms because it's an OECD initiative. Okay? The second piece that I wanna kinda bring, there's a lot of terms when we talk about Pillar two, new terms. There's something called the income inclusion rule, there's something called the untaxed profits rule or the qualified domestic minimum top up tax. These are all defined terms and different countries apply them differently. The goal is a 15% minimum tax. And then you say, well, how does this pertain to The US? And as Leo mentioned earlier, this 15% minimum tax is not a new concept from The U. S. Standpoint. We've had things in place for many years. We have the corporate alternative minimum tax, for example, which focuses on a domestic view. We also have different anti deferral regimes, some which are recent, things called GILTI, what's called FITI and BEAT and subpart of income, which has been around since the 1986 tax act. So all this is kind of coming together. We're saying, okay, wait, The U. S. Already has this and the OECD is saying, let's catch up. And now The U. S. Is saying, well, wait a minute, this is unfair, because if we are having a 15% minimum tax, then the question is, is this duplicative? Am I gonna be paying a lot more? Because I might have both The US tax, okay, and the top up tax. So now double taxed. So these were the kind of things that we're talking about. So with that said, we're gonna talk today a little bit from a from a US perspective and from a global perspective with my panel. And then I'm gonna start off by seeing if I can be so good in forwarding the slides, if I'm lucky enough. Bear with me one second. Okay. So just about me, you know, give you a little background about what Pillar two is. I'm an international tax partner. I've been doing this for more than forty years. Work with clients, both US clients and non US clients either coming in or going abroad. And how do we develop structures and how do we comply with the laws to minimize both the tax and any penalty regimes? Similar to what Chris was talking about earlier, the failure to file some of these forms and to do some of these computations comes with significant penalties. I'm gonna turn it off to my panel now. First, Tom, Tom, if you could do me a favor, just give me a little bit of your background and the types of clients you work with. Yeah. Hello. I'm Thomas. I am a director here at PKF. I'm a lawyer by trade, but I work here. I I used to work at PwC for about seven years, and in an international tax. So I dealt with a lot of, you know, big publicly traded companies who were, you know, dealing with pillar two and the implementation of pillar two and how can we get ready for pillar two. Here, I I still do international tax. I work with a bunch of different client bases and a lot of m and a work. But yeah. So I have lot of experience with Pillar two. I've done many calculations. Thank you. Even if you could, just we've already gotten your introduction. You know who I am. Yeah. But let's tell us a little bit some of the clients you're working with and how you you started to see Pillar two come up in conversations. Exactly. So a lot of the companies that we have and together with Tom and also in Peter and a lot of other partners here in the in this room, most of our clients are international, multinational companies. They come to The United States with the hope of expand their market in The United States, generate more revenue, and that to the point of, OECD versus the IRS battle. Right? That's what we're essentially talking about here today is what is this pillar two and how why is it important and why is it even why is it a bit of topic of discussion? Well, pillar two has, it's it's not it's two, so there's there's been a one before. And that the pillar essentially is a program, so to speak, to apply the, global, tax of 15%. And if you think about what type of institution is governing this program, that's an institution that is mostly thinking about the policy. They're mostly thinking about how to make sure that the, everybody who is in the European Union are paying a fair share of tax. Right? And also simplicity. Just simplify, make everyone's life easier, make businesses' lives easier, and let them just progress and generate more revenue. On The US side, we have internal revenue service. Internal revenue service is governed by US government. So it's it's the, organization whose job is to make sure how much money we can bring into The United States. So we have different goals when we talk about pillar two on The US side versus Europe. So in terms of what we see in our side, is we don't we don't see a lot that we can discuss. And every question that you're going to ask, I'm sure, is gonna be very hard to answer because we don't have a direct answer to have a simple answer to all of that. On the European side, a lot of those clients are telling us that they don't have data to to to to do that. They don't if some of the European companies, have are the high tax jurisdictions, as Peter mentioned, you have to do the top up tax calculations. Right? Top up tax calculations is gonna be any other country that opposes more tax right now than just that proposed 15, percent rate tax. So that's difficult for them to calculate that, and they should never stop monitoring the development of that program because that is going to as as we've discussed, it's now. The action should be taken now, but we don't know what to do yet. I'm gonna turn to Bell. And, Bell, if you could just give us a little background on your role and how you see things developing. Sure. Can you hear me? Yep. Great. My name is Bella Minos a Suarez. I've been a CPA for a long time, And I've been practicing in an international tax area for many, many years. My background started at Big Four, and I deal with a lot of inbound companies here. We specialize we have a a group and a lot of us, assisting foreign companies, set their footprints here in The US, in particular with Spanish. I speak Spanish, so we have a large portfolio of Spanish companies. We help them from a through z. We have a group that here specializes in, employee mobility, in structuring, state taxes, exit tax, and so forth. So we help these clients. When you wanna set up a shop in The US, you contact us, and we'll walk you through everything from the, survey, Bureau of Economic Affairs surveys, which a lot of people don't take into consideration, to the compliance with, the state and local taxes, business registrations, and so forth. So we also deal with a lot of high net worth individuals inbound, having them set up, understanding the tax rules. And one of the key things here, to take away from pillar two, is, as Peter and the team has mentioned, is that global minimum tax. Everybody wants their fair share. At the end of the day, you just have to have, a consensus amongst all the companies, all the countries as to what makes the most sense. The US doesn't wanna lose its competitive edge. The US has threatened, with impunity. I think it's eight ninety nine, tax code, which is a 5% surcharge on individuals and corporations. So there's a lot to, work on. The small companies that we deal with, my group or setting them up, we don't see. And that has not become an issue or it's something that they have addressed or asked questions. But as Peter indicated, the GAAP financials, the bridging, the reconciliation, and you have a lot of countries to consider. Thank you, Bill. And last but not, certainly by least, Jimmy, who is is visiting us from PKF Mexico, and is one of the leaders in our transfer pricing group and the center of excellence in transfer pricing. Welcome, and please give us a little bit of your background. Thank you very much for inviting me to speak in this, international business conference. And I'm Jimmy Cruz, Economist. I've been working with the transfer pricing projects for more than twenty years now. And in my experience, I have, the opportunity to work with multinational companies operating in Mexico and abroad, but also with companies in The US, Canada, Europe, and and Asia. So just to to talk briefly about this pillar two, pillar two is, in my opinion, the biggest effort implemented by the OECD, g seven, g 20 countries to collect taxes in the history. So yeah. So the the the set of rules, as as Peter mentioned, are horrible abbreviations such as IIR, as as under tax profit rule, UTP, whatever. So, they are intended okay? It's a set of regulations, intended to recover taxes and to make sure that multinational companies pay at least 15% as effective tax rate. So and 15% is the easy part. Okay? Because the the other issue is then how you calculate that 15%. So you have that set of regulations, okay, established with the only intention that every country every country have the correct portion of profits according to the rules. And then multinational corporations operating in The US, okay, or American companies operating abroad, okay, will have less incentive to achieve profits from one country to another. And and and the intention is is is, I mean, to collect more taxes, of course, but also is with the complete set of administrative prudence and documentations, okay, that they may gather gather a lot of information from different jurisdictions and different companies. And just to add on to what Ginny is saying, the computations are are very interesting. Conceptually, I think everybody gets it. It's a 15% tax, minimum tax. Where it gets complicated is every jurisdiction has to be done separate. Second, financial statement income and taxable income follow different rules. So you might have an accelerated depreciation for book or tax and vice versa, the others doesn't. So if you have accelerated depreciation for tax and you don't have it for book, you're gonna have a larger financial statement income, which you multiply by 15%. Okay. So this top up tax then has to be paid in that jurisdiction. And then the question is, can you recover from other jurisdictions? How is this all being managed from a cash flow perspective? How do we gather the data? Who's gathering the data? Right? Is it is it the business? Right? Is it the tax group? Is it an outside firm? How are you reporting on your financial statements? Okay. So you have a global national entity. They're providing a And the question will come, do you have an uncertain position? This has nothing to do with tax people. This is financial statement people. And now the tax people are involved. You have a global multinational. And just to touch on what Bell was saying, you know, we're looking at this from a US perspective, most people in this room. So you might be one small entity in The United States amongst a very large international organization headquartered outside The United States. Have you heard that from that CFO? Have they started asking you for this information? Most likely not. So now to some of the questions I just wanna raise the group. We're going to go through this framing the conversation is really what I wanted to talk about is, we talked about this global perspective, as Keith mentioned, this is a policy organization and you have more than 50 organizations excuse me, 50 jurisdictions that are now legislating and implementing this this rule. What are we seeing? You know, Europe is forging ahead. The US is still deliberating on this. I'm gonna I'm gonna turn this over to to to Eve first and say, you know, what do you see from a US perspective here? I think you might have already touched upon it already. But That's right. So, one of the and that's a sort of I don't wanna put any generalized opinions out there, but one of the differences between when you when you deal with the European client and US client is that the the the pace the pace the fast pace at which, US client will make the decision to move or not move. Just I don't know. Remember AI. Right? The the what happened ten years ago when Europe was still thinking about it, thinking about the policy, its impact on the world, and how what's gonna happen. US just took the software, ran with it. So it's a lot of, it's a lot of differences on how you approach a certain, process. Until now and in the next tax year, I would say, we're still gonna be in our team, specifically, we're still gonna be concentrating on The US response to the pillar two, which is our well, it's not guilty anymore. No one's guilty anymore. It's not guilty, but it's a tested income and the FDII and everything that, you guys will probably cover it as a OBAA, results, in the m and a world and and and other tax worlds, in The United States. So we're not gonna we're not gonna make any drastic decisions unless there is an imposed policy that is going to be enforced. So nobody as you said, nobody slapped me on the hand yet. Right? So when that starts to happen, then we will try to start moving towards the direction where we can actually sell the service to as as an accounting firm. And not only because it's not benefiting us, it's benefiting the the company in The United States or it's global companies we work with. And to tie that to transfer pricing, it's hard enough to persuade our clients on the importance of the transfer pricing. And the and a lot of education is going on about what's the arms length principle still. People not a lot of business know what it is. People think that, you know, if you're gonna mention one method in transfer pricing, that's it. That's the whole world of transfer pricing, and it's not. It's, way many methodology, which, you know, and, obviously, Jimmy can weigh in on this. There are a lot more methods that will that calculate that cost or an additional cost that you have to charge your own subsidiaries or your own parents, parent companies, or any other parents or related companies within the group. So it's hard to know what we're going to it's hard to answer the again, it's hard to answer this question. But as of right now, we're continuing to follow whatever the policy we have right now, which is The US regulations. We're not moving with the pillar two. We will try to start educating our clients as part of our tax compliance, engagement on what they need to do if it's a global company. But unless we see some certain development on the policy side, I think we're just, if you don't know what to do, just sit still for a while. And, Jimmy, maybe, you know, from from your perspective, if you give us are you seeing anything from the OECD world, as you're talking with these companies, from a transfer pricing perspective? I'm sure this is coming up. Yeah. Definitely. As as I said before, this is I mean, the whole idea is the intention to regulate in more detail every intercompany transaction. So we are, we we will we will need to take care of any intercompany operations such as intangibles, manufacturing activity, services, or financial transactions as all of them will be subject to additional, taxes. And here I want to to raise a point that many of the OECD countries, they are establishing as a primary source of regulation the subject to tax rule or STTR, okay, which may impose additional taxes to intercompany transactions that may be below the, AMS LEND standard or below the range established according with the AMSLEN standard, and that rate is, only 9%. So that 9% could be an additional withholding tax for many transactions that should be considered by the OECD countries to be below the AMS length standard as part of these pillar two regulations, of course. And I think, just just last week, the or two weeks ago, The UK passed a new budget act, which interestingly had a transfer pricing kinda clause to it, which exempted certain transactions under a certain threshold. So similar, you know, here you have one with a carrot and one with a stick. Yeah. So, a lot going on. I'm gonna skip this next slide on the European implementation because I think we've already kinda touched upon it. But, really, you know, to to think about the compliance aspect, I wanted to kind of go through each one of you and just kind of get your thoughts. There's a lot going on which we talked about just to gather this data, and and what we're seeing is, I'm gonna say the best practices and I'll be saying this after the comments, but the best practices are those companies that are beginning to think about modeling. If you're a non US multinational, you should have already been doing this. You're right to the game. Why? Because most of the European jurisdictions, this has already been implemented. It's effective the January 2025. And now they're having to file their first tax returns. And interestingly enough, some of the countries have developed the tools and some of them are delaying them still. The compliance mechanism to submit your results are totally k? So, you know, it's it's ironic that this has been around. We're talking about this, but I wanna just say, you know, pulling this information together, modeling, and complying, there's three separate tasks. So I'm gonna just kinda turn to the team. You know, Tom, maybe you wanna just give me your perspective from an m and a perspective and and the companies you're dealing with. You know, how are you seeing the data, the technology? You know, what are we seeing? Yeah. I can speak to actual calculations that I prepared, you know, at my previous in my previous life. The the data was very difficult for for even big companies to to really pull together because as you mentioned, it's like financial statement reporting. But each rule, it it's specifically defined in the pillar two rules that it doesn't necessarily line up with, you know, our principles. So a definition of what one thing is, it might for US purposes, we might say, oh, yeah. That's that's income. But for pillar two purposes, it might not be income or it might not be a deduction that you can so there's a lot of ins and outs. So I know that clients were it was very difficult for them to get on board and get their systems set up to where that they can get this data. And I imagine that that's gonna be similar. And one thing I know you mentioned at the top, you know, the €750,000,000 threshold, that's not gonna be around forever. So, you know, advising our clients and getting them getting them the knowledge they need to understand, you know, what what is coming their way potentially in the future if that €750,000,000 threshold drops or they grow to exceed the €750,000,000 threshold. Like, these are the things that, you know, we need to start thinking about so that they can get their systems in in place now so that when they are subject to Pillar two, they're they're already ready to go. Great. And and I just wanna add the the comment that I kinda slid by is this is not by legal entity. This is by legal entity, by jurisdiction. So you might have the financial statements. Financial statements have a number. It doesn't have it broken down by jurisdiction. And how do you define jurisdiction, and how do you allocate financial statement income and expenses? What is your methodology? What is your approach? Right? So you have to not do that just for one methodology. You have to now or the, you know, top up tax using three methodologies. So the work just keeps expanding, and you have to do this on a regular basis. So what processes do we have? We have five minutes left. Jimmy, do you wanna just touch on that as well from a data perspective? Any thoughts? Yeah. Definitely. And and and in addition, Peter, we have to take into account that also these, pillar two regulations are establishing a new set of rules to account for the revenues, cost, and expenses, and profits of the companies. Right? Because then you have different accounting systems, different, accounting regulations in every jurisdiction, and you need to put all the accounts, let's say, in a washing machine, like, so so so that you obtain these low profits. And then the low profit, okay, should be the base to determine the 15% effective tax rate in every jurisdiction. Just just as, as a general comment, I was I was talking with, with Tom, and we were guessing if The US companies will not be forced to implement pillar two this year, but then they are operating in other jurisdictions. What will happen? Okay? So they will be subject to pillar two regulations in other countries, but not in The US. And then the same for foreign companies operating in The US. Okay? So they will be subject to the regulations. And then this will raise many, many controversial issues. So, there there I mean, it will be a lot of work for lawyers, okay, for total taxation problems and and issues. So lawyers, be ready to work in pillar two controversy cases. Yeah. Okay? Great. Thank you, Jimmy. And thanks to the panel. Just to wrap up, as recently as just the other day, just to give everybody the last perspective, The U. S. Has been working since the enactment of the most recent Trump Tax Act. There was a clause in there called eight ninety nine, which was basically a punitive tax because of this pillar two. And we dropped that in our negotiations because the OECD and G7 agreed they were gonna develop a side by side system. And they're supposed to have this resolved by the end of the year. Well, you know, everybody knows today's date. We're still waiting. Reports suggest, this was a news article that came out literally yesterday, okay, that they're close. Okay? Close. I don't know what that means. It's not defined, but, you know, again, I'm sure we'll get some further guidance, soon. But the whole idea of this side by side system would exempt The US companies, as Jimmy was just saying, and other multinationals from the IIR and the UTPR. It's supposed to simplify compliance. We've heard this before. Simplify doesn't necessarily mean simplify. And it's gonna provide a parity of substance based nonrefundable credits, Okay. Like The US R and D. I think there's a lot more to be learned from this. So, you know, The US has reportedly conceded, this is a very important fact, that there will be no push down of the tax on the CFC tested income, formerly known as GILTI, so that the income will be first subjected to the qualified domestic minimum top up tax. So meaning that if you're in a multinational country, you're gonna first pay the top up tax. K? And then you're not gonna you know, before you compute The US side of this. So there's a lot of questions here. There's a lot of confusion here. But what are we recommending? I think that's the most important thing is that there's a lot of work to be done, and there's not a lot of work to be done. It's confusing. You have to know what your exposure is, and the best way to find your exposure is to do some modeling. Talk to management. Talk to talk to your CFO. Are they aware that the financial statement impact? Investors are gonna be looking at that. Okay? So you're gonna have to define in your financial statements your exposure. How are you gonna determine your exposure? Are your lenders gonna give you a clean opinion? K? Are your tax people and your financial people on top of things? And what are the other impacts that this is gonna have, you know, on your financial statements, on your business, how you price things? Right? It all comes back to where Frank spoke earlier, you know, in all the tariffs. You have to be able to understand what your cost of goods are, what are your services, how much is it costing you, so you can make better business decisions. So I hope, we developed a center of excellence in India that focuses on pillar two, and can help if that's something that you're interested in. But pillar two is not going away. It's here to stay. Thank you for my panelists, and thank you. Okay. If you thought you were done with taxes, you're wrong. In fact, we're gonna dive deep. We're gonna go into the mouths of the government. A lot of things have happened to IRS over the last few years. They got somewhat like $8,090,000,000,000 dollars allocated to them. Was it three years ago? And a lot of things were happening and maybe for the better. Who knows? Could have been a little bit more government ways. We don't know. We could argue about that. But I think a lot of good things will start to happen. I mean, the biggest area with the IRS is just responsiveness. I mean, just to get them on the phone, I mean, they'll wait for an hour, two hours. Clients don't believe it. We've got clients from countries like Greece saying, I can't believe your tax system is so bad. I mean, Greece is telling us our tax system is so bad. It's embarrassing. They don't believe it that we shut the government down and that it's not gonna be open for six weeks. When it does reopen, there's not gonna be much help. So, I think this is one of the reasons why we needed to hire a tax controversy person. Someone who knows the inside work using the IRS. I mean, like, to be honest, because I've been doing this over forty years. And we've had some some contacts. There used to be phone numbers where you could speak to the special counsel. Those people did. But today, it's not that easy even before the cuts that happened this year. With that said, we're lucky, that the IRS and the government was cutting back and some very, very talented people were available. And we introduced, to our next speaker, Bryce, who else came from the government. In the back there, I don't wanna mention it by name, but, he left the government. He's working with one of the forensic area, ex FBI agent, but, he got to do some stuff over. But, anyway, so our next speaker is Kelly Marcelin Lee, and she'll give us some IRS updates and developments. So, Carrie? Thank you, Leo. First of all, is the mic picking me up? Closer? Closer? Wow. I'm about to eat it. Now? Better? Alright. We're gonna try. Hello, everyone. As as Leo said, I'm Kelly Morrison Lee. Recently joined PKF from a long career at the IRS. Let me be clear. I am now with PKF O'Connor Davies. I no longer work for the IRS, and that was by choice. And I am, like Thomas, also a lawyer by training and most and most of my career by trade, but I now practice for an accounting firm, so controversy works looks a little different on this side. But I joined BKF after fifteen years over a period of twenty, at the IRS. And, I joined because I we we're gonna centralize our tax controversy practice more than we have in the past. And that means having, me aboard because I have a very general and broad view of tax practice and procedure and navigating the IRS and what that means because it it's not just one place as a whole. I spent most of my career, with the IRS with the office of chief counsel. I I did trial work at the beginning of my career. I wrote guidance and eventually held several leadership roles. I also spent some time with the IRS, in their enforcement. I was the senior adviser to the chief tax compliance officer. So that's on Leo. Okay? But, I was her senior adviser and did oversight work for the person who, is in charge of all enforcement of the IRS to include CI, whistleblower office, professional responsibility, and return preparers, but also the operating divisions like large business and international, where a lot of your clients and yourselves fall within their realm. Finally, I was, special counsel to the National Taxpayer Advocate, and that person serves as an ombudsman to the IRS to fix various processes that aren't working. We know that's not a problem, but there is a person who is is, appointed, to to fill that role. She files annual reports to congress about those problems and potential solutions. She also runs a case advocacy staff that I advise when individual taxpayers contact the IRS and try to get help with their processes. So long story short, that's how I've arrived here. And to start us off, let's have a little fun with the elephant in the room. As Leo started to note, the IRS has been to a few things this year through a few things this year. And they're they've encountered some serious resource issues. I think I think that'd be a fair statement. So how about some trivia about those resources resource challenges? Who in this room might be able to tell me the name of the current IRS commissioner? Not a one. Not a one. In a in a room of tax practitioners. The current IRS commissioner, one of seven this calendar year, is Scott Bessens, the current treasury secretary. It is an acting commissioner and acting chief counsel. No deputy commissioner in charge of enforcement at this point in time. So that that creates some some interesting structural challenges. Let's try another trivia question because somebody in this audience can answer it. Who here thinks they have the longest standing administrative process issue with the IRS. Frank, is that you well, Frank deals in tariffs and customs, so probably not too much interaction with the IRS. Perhaps some of his clients have dual issues, though. Does anyone think they have that case? I mean, I have several on my desk where the clients have been dealing with the IRS for the better part of ten years, but I thought we might have some interesting anecdotes to share. Just trying to have a little fun with the reality. But just as the IRS is dealing with those resource cuts to include staffing challenges, LVNI is certainly taking hits as well. Generally speaking, if it takes a human, that process is not working very well right now. So what does it mean? Well, in one way, we could argue it's a good thing. Right? That IRS initiated enforcement has less resources and so that it's more it's less likely in our current state, our current environment. But we also know that the IRS has noted they have increased increased focus on international taxpayers in particular, both both individuals and businesses who may come in the international space as part of connections to other security enforcement measures. So we also see finally that voluntary oh, I'm still on the wrong slide, guys. That voluntary compliance is slower with with less staff involved. As I noted before, leadership is largely acting roles, and a lot of changes in process, procedure, policies, or just clearing of very large cases requires several levels of approval. When you don't have individuals in those roles and then you have actors who have several jobs, those approvals are gonna take longer. That's true in the closing agreement space and other initiatives. However, the IRS has continued to note that they are looking for opportunities for quicker issue resolution, including in this space. Over the summer, the inter the, large business and international division issued an internal guidance memorandum that noted they're going to try to streamline some exam procedures to make the examination process faster. We can take this as good news. What they noted in particular is that through the, document review process when they're requesting documents at the beginning of an exam, there will be no required acknowledgement of facts. That's a procedural step that often takes a lot of time in an exam, so that's that's generally good news. They're looking to expand the accelerated issue resolution program that's often called AIR or AIR, for larger dollar cases and larger taxpayers. And finally, for those of you who've been involved in fast track settlement programs, they are trying to, well, not trying. They are requiring mandatory review for denials of those settlements. So that could be potentially advantageous for our taxpayer clients as well. I will also just say that the streamlined procedures that many of us have relied upon before for our clients to find compliance initiatives, those largely are unchanged and remained in place. We may be hearing about some systems being eliminated. We're also hearing about some other updates in the enforcement space, but the, streamlined foreign offshore compliance program, maybe there's not a scene there. But that program is is still available to all individuals. It does require that there's no willfulness in the conduct of the taxpayer, no prior civil examination for the issues involved, and that that taxpayer is current on filings. But it's a it's a potentially advantageous route that we can offer. But I think that what you're here to why you are here to hear from me today is more to figure out where the IRS is gonna go. And sadly, that's an area of uncertainty. And as we talked about, nobody in the tax environment wants to be facing uncertainty. Nobody in the financial environment wants to be facing uncertainty, and nobody in the immigration environment wants to be facing uncertainty. Yet here we are. So we learn from the facts we have available. Government officials in recent conferences have noted that the prior strategic plan that accompanied the $80,000,000,000 Inflation Reduction Act initiative that Leo referenced, That strategic plan and those initiatives are going to be abandoned. However, we have not heard the exact time frame or what the new plan will look like. But we can infer, given references, that the IRS will still continue to focus on international tax payers. The prior plan was was designed and specifically noted that large businesses, corporations and partnerships, high net wealth individuals, and all of those those types of entities with international connections would be a focus area. I think that when we look at the government enforcement realm generally, not just in the tax realm, we can infer that international taxpayers will still be a focus. But we have to guess what that means for where the IRS is going to put put their resources. I think is Jimmy still in the room? I think Jimmy would agree. Given the current litigation environment, transfer pricing is still going to be one of those issues that's the focus of the IRS. I think that given the value to be raised with the OECD changes that we just discussed in the last panel, You know, the, the pillar two taxation environment, the IRS is still gonna be focused on that. Even though they're not enforcing it necessarily, that's going to affect IRS enforcement and collection as well. But other than that, we're looking at areas where we need automation, because the IRS is facing reductions in resources and staffing, and that's not going away. So it's those reporting regimes that become extremely important. That includes cross border information sharing, and those that could lead to the potential for an AI based audit. So we already have very entrenched information sharing agreements with Canada, with Mexico. We have mutual collection assistance programs with those two countries and several more. So we can expect that that data becomes increasingly important in the automated space. So if you have clients in those countries, make sure that they are looking through their data. They're aware of their information. They're aware of their their outcomes. We also talked about before the penalty the penalty environment and, the FATCA and FBAR regimes for information reporting around your foreign bank accounts is gonna continue to be very important. I do wanna note, a little internal revenue code provision that those in the tax, tax law space love to to reference the sixty one zero three. Those are the disclosure provisions. The IRS is still governed under those those provisions, so any exchange of information, be it with other countries, be it with financial institutions, is going going to be limited by the constraints of those rules, and the use of that information is also going to be limited by the constraints of those rules. That said, it's very important to continue to track any foreign accounts and any foreign assets. Outside of enforcement, however, the IRS desperately needs to to modernize as well, and they've given lip service to that modernization. But when we talk about that reality in the international space in particular, there are some hurdles we need to take into account. In September, the IRS brought up the idea for a an executive order that all payments in the future will be electronic, be it a a payment made to the IRS or a refund from the IRS. It certainly looks like that that implementation is going to take time to roll out in reality. So I don't wanna, you know, I wanna I wanna caution everyone but not alarm everyone. However, but we think about that in the international space. There's additional hiccups along the way. The electronic funds transfer payment system, EFTPS, we call it, is the the main mechanism to pay the IRS electronically. That requires a domestic bank account that has a US based address. How many of your clients are not in that situation? Just think about that as an at the outset. Direct Pay is another system to pay the IRS that doesn't require a login. It's not account based. A lot of taxpayers like it for that reason, but it works through the id.me verification system, which you have to verify your identity. And and so that really only works for individuals, including those with foreign passport. So that there's for international individual taxpayers, that is a potential mechanism. But businesses, obviously, do not carry a passport. One thing I would consider for any international clients right now is their ability to set up a domestic account if they can make that available to themselves. And then finally, a a a program that is overlooked a lot, the IRS does have a same day wire transfer program, and that is definitely a mechanism that's available. But circling back to the information returns, automating those systems based on the forms that you have to file, If you don't get it right, there's very little room for error, and it leads to significant, quick, and plentiful tenant penalties. And, I I just wanna say both for for national individuals and international businesses, it becomes increasingly important as we are automating the systems that track these things to make sure you have clear recordation, clear tracing of all of those accounts and where those accounts end up. And, please, with domestic bank accounts, trace your withholding payments in US based financial institutions. Those 10 '42 s issues, taking eye contact out there, are causing lots of hiccups for clients right now as well. And as as Leo noted, again, while these adjustments and penalties and enforcement related to all of these information return requirements and reporting requirements are increasingly automated, we are not seeing the parallel for resolution mechanisms. And largely resolution is still going to have to go through a human. So having your ducks in a row, having clear data, having records is very important. While we hope there might be future future options like the document upload tool available to international taxpayers, but right now, it's very important to stay on top of and respond to every notice you receive. Contact your tax practitioner right away. Make them aware of it early. There's often strict deadlines to respond. I think you've probably gathered here today. The PKFOD is very well positioned to navigate these issues. I've come aboard to help with that that initiative. But it's going to be an increase increasingly uncertain space for a while. We're going to see a lot of automation that creates more questions, and it's it's a it's a matter of making yourself putting yourself in the right position to defend yourself and being aware of your taxpayer rights and taking advantage of them. Thank you, everybody. I'm scared to ask this. Does anyone have questions? Try not to break this again. We'll save the questions for later if you wanna ask anybody. I don't know. We'll have fifteen minutes after our next presentation. Our last panel is going to be covering covering cross border international m and a. We have a, a huge transaction advisory practice at the hip of Connor Davies, and we we deal in all different areas, valuation, quality of earnings, due diligence, crypto and all this, cyber. So, part of that team is, led by well, the m and a tax team is led by Chris Magliaccio. And Chris will be bringing up some of our international tax folks, and they'll be talking about m and a and tax. So, Chris, come on up with your team. Kelly? Anybody need to stretch your body a little bit? Stretch. Yes. Everyone Tap off. It's the home stretch. Yeah. I was told, earlier in a different context, to work on making things conversational but deep. So that's what we're gonna go for. It was not you, Leila. Yeah. Welcome everyone. I'm Chris Noliachio. I'm, as as Leo mentioned, one of the lead the lead, m and a tax partner at at PKF O'Connor Davies. I also deal still a lot in, international structuring and and acquisitions. We'll be kinda working through today. You know, we we recognize, that we have been put in the unenviable position of being, the last thing we have between you and the cocktail hour. So we're gonna, that's not too technical, but we wanna tell some stories. Right? We're gonna talk about things that we see with our clients, things that we see where, the issues that come up when we're working with clients, when they're, you know, making investments in The US, doing acquisitions in The US, what they're seeing, and the things for for you as you're advising clients, sort of keep an eye out for. And, I I always say that the biggest thing you can take away from something like this is is knowing, when to see a problem and and when to call someone. So, with that, I'd love to introduce, the panel. First up, let's go that way. We have Ralph Rudenberg. Ralph, do you wanna introduce yourself? Yeah. Thank you. Thank you, Chris. Yeah. So international tax partner based in New York City. Over twenty years of experience and in the multinational multinational entity space, cross border always, individuals, corporations, partnerships, inbound and outbound business. Yeah. Yep. You're getting yourself? Good point. Okay. Now I think it works. Yes. Yo, Evgeny Antonov here. I'm a tax director in the international tax group, and I specialize in international tax planning, both on the inbound and outbound side, more on the inbound side, and I also do a lot of m and a work as well. Yeah. So I'll turn it over maybe to Kelly to introduce herself. Sure. I can borrow. Right? Hello, everyone. My name is Kelly Lin, international tax partner, colleagues with, all of them. And I focus more in the Singapore world, you know, multinational, inbound, outbound clients, spend twelve years with the big four. And here, I'm on my tenth year. So I know. What happens when we when you get to 10, do we do we have anything for you? I wish. Let's see. More clients. More clients with that. Yeah. That's what you get. That's what that's what you get. Yeah. I I also have to say, you know, it's it's interesting by working at the PKF or Conner Davis, because there's a PKF international brand. Okay? And I'm also the coleader of our PKF Asia Pacific, you know, group and get you interact with the Asia country, those, member firms. And, also, I have a little bit of mixed of, skill set of, you know, s SSC seven forty. If anybody, you know, you need a financial you need your tax provision. Okay? Review or prepare. I also lead that practice. Perfect. So, yes, if we're gonna be kinda going through some of the key issues here, we've got all of the ones, info on the slides. Oh, I'm jumping somehow very far ahead. You have put your one step. They did not put it here. I have to Oh, they didn't put them up. Oh. Oh, well. They gave one slide. They're the structure. Oh, well, you know okay. Well, here's the slides. The slides will we'll we'll send them later. It'll be fine. It's gonna be a conversation. Don't worry about the slides. You'd be distracted anyway if you were reading them the entire time. So, I think the first thing we wanna talk about is, you know, businesses when they're making moves into The US, in the most haphazard way possible. Right? They're starting to sell into The US. Maybe they're requiring a business that's been selling into The US but has done sort of literally nothing from a structuring perspective. And so I'll turn to you again first. What are some of the issues you see when you encounter a business that's making those moves, but has done sort of no structuring at all? What are the things they need to be concerned with? Yeah. So one of the key things that we kinda see is, you know, when you have a foreign a foreign, corporation that's doing business in The US, sometimes they don't kind of think of all the possible tax ramifications of what that business can be subject to. And there's there's a lot of them. The first off, it could be, you know, it could have federal U US tax implications. Secondly, you have state tax implications, and then you could have potential sales tax implications. You kinda have to consider all these things when you're kind of structuring a business. And, you know, new businesses can start out in The US. Quite before working on this. I just wanted to double check. When you're just starting off, and you're, you know, you're a small business and you're not scaling, maybe it's it's okay. You don't have that many sales into The US, and there's no kind of significant or minimum kind of tax implications. But once you kind of begin to scale that business, you have to consider, you know, do I need a US subsidiary or can I operate from as as a foreign corporation? So when considering these things, you have to look at really the country that you're operating from. Does the country have a tax a US income tax treaty with The United States? And maybe you don't. Maybe you you're operating from a country like Brazil that doesn't have a tax treaty with The United States. And then you have to look at really, do the question is, do I have a US trader business, in in The United States? And a US trader business is usually kind of a lower threshold than what's called a permanent establishment, which is kind of the treaty version, which is a little bit of a of a higher threshold that you have to kinda reach to have a US trader business. And one of the key considerations here is, like, okay. Well, what if I have a, either a US trader business or a permanent establishment in in The United States? What kind of, US taxes kind of do I face? And if you have a permanent establishment in The United States, somebody could think, okay. Fine. I will pay my foreign corporation will pay the 21% tax rate and, you know, be be done with that. I'm okay. But you have to kind of look at it, holistically here, what's actually happening. Let's say you have a US trader business. You're making about $2,000,000 in US US sales. It says $2,000,000 in profit. $4,400,000 of that is gonna be subject to tax. And you say, okay. I'll pay that tax. But what a lot of what a lot of foreign corporations are not considering is the branch profits tax. Afterwards, after you take you take the $400,000 off the top of that $2,000,000, now you have $1.01 1,600,000 left. And The US says, no. Wait a minute. We're gonna take 30% of that because we're gonna consider that as, you know, your as a branch profits tax. And what The US, what The US tax code is really doing here is putting you on the same kind of level as a US as your as a US subsidiary. They're taking your US net built in net equity that you have in your as a as a foreign corporations in your US territory, and they're taxing that at 30%. So now instead of 1,600,000.0 in profit, you have, I don't know, about 1.1. And that's not even taking any state taxes into consideration. Right off the top, you're close to a 50% effective tax rate at the federal level. Maybe not not quite 50%, but pretty damn close. Yeah. And and unless a treaty reduces the branch of its tax. Right? So The US The US has tax treaties with a lot of countries. So I just had a case with Ireland. Ireland is reducing the branch profits tax under certain circumstances to 5%. Germany is reducing it to 0%. So unless but, basically, I mean, the Evgeny is right. Right? It's 30%, right off the bat unless unless there's a treaty. Maybe one one additional comment on the permanent establishment, comment and also on the initial comment, Cruz made when investors move to The United States. Unfortunately, in many situations, we are consulted after the fact. They don't they don't speak to us, before they make a move, and I want to tell stories. I have a brief story, one minute, two minutes. So that's something that, law firms, tax lawyers in Germany are coming up in the or came up in the last in the last years, kind of a sandwich structure. So in Europe and around the world, everybody knows US is a good place for investment. Right? There's a lot of money here. There's family offices. There are private equity firms. So there's a lot of money here. So what they wanna do is they want to set up kind of a hub, and holding company in The United States to get money from investors. Not just US, but mainly US because it's a lot of money. So what they do is they set up a holding structure in The US, an investment company. And, the business, the operating business is not necessary in The US, not yet. It's abroad. It's, in Germany. It's in France. It's in Italy. So The US entity has subsidiaries, 100% subsidiaries in many cases. On the other hand, the owners of The US holding company are also foreign. So that are, the founders. Right? They are also not in The United States. So the structure that, I'm encountering in the last years a lot is US holding foreign subsidiaries owned by foreign entities, corporations. And then we start talking and we start talking about tax compliance. And I'm telling them, yeah, for each operate operation you have abroad, you need a form fifty four seventy one. Whoever has ever I mean, who has seen this form, knows it's it's really a monster. The cost is 4 to $6,000, at least, yeah, to do that. So for each of these subsidiaries, you need this form. On the other hand, for the owners of the holding company, we may also need certain forms cheaper, but also they need to be done. So the tax compliance for the structure is complex. So that's the first the first communication point and the first surprise for these people because they didn't think about it. They didn't talk about it. They did not reach out to US tax advisers. Nothing. And, and then the continue the communication continues or the discussion continues and we come to PE. The OECD just updated the commentary on the OECD and the tax model treaty for PEs. And some of these, founders, they say, yeah. I'm the CEO of The US entity, and I but I work from home. So the OECD just changed rules in terms of working from home. They make a lot of situations where you work from home abroad with the PE. Before, it was not that strict, but now they are loosening it up. It's commentary from the OECD. Countries would have to implement it. It's not law anyway, and it's commentary, but a lot of countries will take this as good advice from the OECD and will change their rules. So It's logical. Right? I mean, a lot of part of what that that OECD guidance also did, right, was it said that if you are working from another place for, like, a, you know, two or three months even, that that might not create a PPE. So it sort of solves what had been sort of an an age old conversation with a patient problem. Right? My my CEO, he's got that house in Italy. He likes to go for two months and, you know, still do work. Okay. Well, maybe that's not a PE that's fair and that's kinda reasonable. But if he's like, I'm I'm ducking out and I'm gonna go live in Italy for a year, now you definitely got a PE and it's quite clear in that at that moment. You know? I think it's like a We're so passionate about this. I know. We're passionate about Yeah. He has to join in. Yeah. So you mentioned Italy. Hypothetically, if a a CEO, a a tax partner. Partner, Leo Key, we'll call them. But there are no reason Italy for six hypothetically. No. I was gonna say there's maybe basically 50% thresholds. I mean, that was one of it. It also depends what's being done in that office. It's typically like The US tax lawyers. Is it a is it a home office or not? Are you seeing clients there? Is productive work being done there? Who is the person doing it? Is the president making executive decisions, or is it somebody who's a software engineer, you know, doing code? So it really depends on that. But it's really good guidance and sorry to chime in, but I couldn't help myself. I'm gonna can I have two minutes, please? Show you some text, Kelly. Of course. They are Of course. Fast. Right? As you guys can see, they're already digging into the detail. The terminology probably will throw you off. But I think to summarize, you know, the most important thing and I think now our foreign investors, they're getting smarter. They they're aware of you know, before I even set up up my operation in The US, what is the format of the company I need to set up? Should I set up a US LLC, or should I set up a US corporation? Right? And because the tax implementation of your the form of your US holding company can make a lot of difference. Right? So that's kinda like what they they they skipped the the the basic explanation. You go into the detail because if you got a foreign investor, you got your US holding company, and then US holding company doing business worldwide. You got your sandwich structure here. Okay? That sandwich structure is not good. I think that's the point. Okay? Sandwich structures are bad. Right. Sandwiches are good. Sandwich structures are bad. That's right. Yeah. But maybe one one comment on that one. Partnerships for foreign investors, I don't see that much. I see a holding in The US, and then below that, I see partnerships. The Balancer Because the Yeah. That Because the foreign investor that sets that's setting up a partnership in The US, the moment you tell them this is a trade or business for the part for the members in the partnership, doesn't matter where they are, then that that piece of the discussion is over. Right? Because nobody no individual or an individual likes to submit a return. For companies. They don't want that either. So in that situation, then it moves to a blocker. Right? We we call it a blocker. Right? If it's corporation in The US that blocks, foreign people who are owners of that. Blocker is one of the first things I, like, learned, as as a tax lawyer, you know, that I was trying to understand, like, why the structure was being set up. There was a a foreign individual who was making some investment. And I was like, what is this doing if the tax rate's all gonna be the same? He's like, yeah. But this guy doesn't have to file a US tax return. And I was like, oh, important. So that's still still a thing that people don't like to do. But to back to pull it to Evgeny's point, you know, one of the things we're we're doing m and a in in these businesses, these kinds of issues are one of the most likely things we're gonna find, particularly sort of the state issues, right, where, you know, they may have a business may have thought about the permanent establishment issue, but they haven't thought about the potential state tax issues, particularly the sales tax issues. And so that's kind of a common one we find where we've got a US business that's, you know, relatively significant, and it's it missed a fair number of state tax filings. That's where, you know, again, you're protected on the permanent establishment and protected on those rules, but, no, the the state taxes are really the issue. The federal level, you're protected on the states. Many of the states don't follow, the federal rules, don't give you the same protections. You know, we did a a a fairly large deal recently where that was really the only issue that we were actually trying to defend against. The the buyer was trying to say there were actually larger issues working with sellers. No. No. That's that's not quite as bad. It's bad. Let's be clear. We're not it's not they've got some issues here, but it's not quite as bad as our as our argument. Chris, just a question. I think you might wanna also add from a structuring perspective, the estate tax, not state tax Mhmm. On structures. Sure. Do you do you guys Real estate. Well, not just real estate, but if you are a investor investing into a US company, and you might have some estate tax issues. You'll have US property. Right. Real property. I mean, you are for it's any US Owning. Yes. Citus. Yeah. It's about Citus. Right? It's about US Citus. Oh, we've got Joe Parmigiani and Microsoft. We have Joe Parmigiani in the back. Why are we asking him? Yeah. US corporations for estate and gift tax are subject to US Citus real prop property, which will be subject to a 40% tax after the first 60,000 when somebody dies. So there's a huge issue coming into The United States about, someone having, you know, an apartment in New York, for instance, most of my clients. These apartments are quite a penny now, at least a couple million. And you could see when you tell the family you have to pay 40% on that apartment, how their inheritance dwindles very, very quickly. And most of the time, it's about eighteen to thirty six months after they figure out they have a problem. So they're already late, and now interest in penalties are accruing in The United States has basically taken 60 to 70% of the value. So just to be aware and mindful of that, Ralph and I have a lot of issues on that. Chris and I work together. So like I said, The United States is very punitive. If you have anything that they could, find a way to attach or have nexus to. Yeah. I I think this is such a great example how we work together. Right? So Chris packs m and a. Right? Joe Yeah. They just grabbed me when they made me. Whenever I have something, I work with Joe. I work with Chris. I tell you, it's really it's really a great team. Conversational discussion style. When Rob just started with us, she was looking at him. Is Kelly and then you are yelling at each other? Because we have a problem. So that's why I put us the last. It was seven seven years. Seven years ago. Yeah. So and it's about making a good point and maybe we'll touch on this more. Right? You know, in terms of people thinking about making the investments, you know, what are the considerations when you're figuring out what type of entity and sort of what type of disruption? Maybe you go to that next slide. I put that slide together just to, yeah, just to show to show you what what can happen. So this is I am not going in through this into into detail, but you see here, foreign country, the foreign country is a DACHI region. It's Germany here, Germany, Austria, Switzerland, almost the same. And you can see here what what can happen if you choose the wrong structure. And I can I can tell you, on the very left, you see the top tax overall tax rate is 64%? So every dollar, 64¢ go are going away. Right? And I can I can tell you how many LLCs I still see? Everybody here. Right? E for Chris. Right? E for Guinea. How many LLCs we see? Because US likes LLC. Right? US attorneys like LLC. But a lot of attorneys do not really grasp what's happening from a from a tax perspective when you have a foreign owner in the NLC. Right? First thing, as I said before, if it's if it's one individual, it's a different entity, foreign individual would have to file a tax return. Right? You cannot imagine how many people don't know that when I tell them, oh, what can we do? I took you can merge NLC into a corporation. You could check the box check the box to a corporation. So there's there's ways out of it, but the initial mistake is done. And it costs a month, right, of course, right, to to fix it. Right? So very left very left and I think it's left right from everybody's. Yes. The left. Yeah. Very left, it's 64%. On the far right, I like that structure. You can bring it down to to to roughly to 26 to 30%. Right? So that's that's possible. So it's a difference on over 30% in the tax rate. And that's that's that's just demonstrate and shows how important it is. In between, you have these other structures, different levels of taxation, overall taxation. And this is really when the dollar is in the pocket of the owner. Right? So the the tax burden. It's not just on a corporate level. It's really when the when the dollar is coming to the to the to the owner and to his pocket. And to Frank's point, that that's not a loophole. That's just smart tax planning. Right? Yeah. That is yeah. Exactly. But this If you combine that with the tariff stuff, you save a lot of money on diamonds. Yes. You can. Yeah. Actually, I do have a real case here, you know, how important the tariff place into Another one. Yeah. Well, another one. Yeah. Did you because when you have a cross border clients, right, you're really doing business around the world. So you gotta modeling your overall consolidated tax. Right? That that's your total tax here. And then then, I'm sure we'll bring this transfer pricing will come into the place. Right? So so there's a lot of tax planning in this worldwide cross border, you know, structures, tariff. We use a tariff as example. Okay? I have a client. This is a real case here. Okay? They used to, control pay less. Let me think about it. They used to pay what's the other way around? Before this tariff, the the cost yeah. So they used to pay lower, income tax lower US income tax because they manufacture in China. Okay? And then they send it here to sell. So US is really you you just sell. You distribute. Right? So the tariff, they use they can manage it, let's say. You know, user transfer pricing, okay, to use cost of goods sold, reduce income tax. Okay? They pay less income tax. But now because of, you know, the recent change and the company is smart enough, they don't they're not a US, you know, management here, but they they're thinking, hey. Should I pay more tariff tax, or should I pay more income tax? Because if I increase my income tax, I might have more room to play around. Do I have a credits? Right? Is there any tax credit? I can think about it. And if I pay more tax, you know, hey. Maybe when I become an IPO, you you if I go for IPO, I have more proof to say I'm doing well. Right? So then this year, in 2025, they rather to pay more income tax than tariff tax. So everything is related, you know. Yeah. No. It's a lot of there's a lot of interconnected questions, I think, when you're setting up that planning. I mean, I think one of the big things I always think about is if I am setting up that US entity, how am I gonna get the money out? Right? Because that's the point of big in terms of end planning. Right? You know, if if I've made profits in The US, especially if I'm a non US investor, you know, am I gonna just pay a dividend? Am I gonna get money from a sale? Like, what's, you know, what are opportunities here and and what are the consequences of that? Right? You know, maybe we talk a little bit, Kelly, right, you know, the in the treaty network. Right? In in Europe, we have a The US has a pretty consistently good treaty network. But in Asia, for example, we have a very patchwork set of treaties where depending on the country that you're in, you could have a very, you know, different answer. Oh, yeah. Absolutely. So, for example, China to Hong Kong. You know, for US people, we think China, Hong Kong is the same. China. Okay? Unfortunately, the tax treaty with the China set up back in nineteen eighty something. You know? Yeah. Long time ago, Hong Kong was separated from China. So China and The US has a treaty. Okay? But Hong Kong and China does not have a treaty. And in the recent trend, we have a lot of ecommerce client. Okay? Talking about the tariff, you know, Chinese business is saying, okay. If I'm importing stuff, you know, to to The US, it's much more expensive now. And they did not know, hey. Should I use, a Chinese company to do business in The US, or should I do Hong Kong use a Hong Kong entity to do business in the in The US? Or should I just really set up a US holding company, okay, to manufacture things here in The US, get some incentive? Or, you know, do I send my stuff, semi product stuff to, you know, Vinay or, you know, different, Asian countries and export it from there to The US has get the less tariff tax. Right? Like, really interplace. Yeah. You know? And the treaty is important on the withholding tax. Yeah. It's a it's a flow of money question, right, which can be very important when you're doing m and a and you're setting up that that structure. I mean, we recently did a transaction where there's gonna be an acquisition in Canada, and we're like, oh, okay. Well, that shouldn't be too hard. Well, we'll set up a Canadian LLC. No. No. No. But Canada doesn't have an LLC. It's got ULCs, unlimited liability companies, and corporations. Okay. Well, what does this do? Well but okay. How do we then gonna move the money back? Because Canada doesn't recognize US LLCs and US s corps differently, for example. There's all sorts of little things there where as we were just changing slight details similar to what we were seeing on the screen there, you know, we were changing the tax rate as we went. We're changing our confidence in the tax rate. So I think that can be a really important thing in terms of developing that because you've gotta be able to answer those questions. And again, to Ralph's point, the last thing you want is to have set up a structure and find out, actually, you're in a terribly inefficient structure after I've made a bunch of money. That that that's true. And LLC in The US is a very specific concept for tax purposes. It's unknown outside of The US. Whenever people, outside of the USC LLC, I think it's a corporation. Right? A corporation for right. Intransparent. Right, to block kind of a blocker. And that's not for you as everybody who is in The US knows that it's definitely not for tax. But it protects you from a legal perspective. I mean, I'm not a lawyer, but it protects you from a legal perspective. But tax is a flow through or it's partnership. Right? Unless you would make it check the box here. Of course. Yeah. And one side note, I just wanted to mention related to all of this is just from a documentation perspective. You know, if you're gonna check the box, you're gonna file eighty eight thirty two. Just make sure you have that on file. Make sure you receive the, you know, IRS acceptance letter for that sort of thing. And, additionally, like, for sales tax, let's say that you're sale for resale. You sell tires into The US. You you you you sell it to wholesalers that sell it, to other businesses, to other businesses and then to the end customer. You need to make sure that, you you're collecting sale for resale certificates and tax exemption certificates because maybe you're not subject to sales tax, but maybe you have to, file zero tax returns and actually collect the tax exemption certificates or sale for resale certificates. Or there's other ones like, manufacturing certificates. You can use some parts for manufacturing. You probably need to collect, in some states, certificates for those two. Yeah. I just wanna ask, maybe Chris can answer it. In the M and A area, a lot of times you walk into a structure, there's an acquisition being made. You might buy a structure that has this sandwich in place. Maybe there are assets in different countries and different subsidiaries. Isn't there certain restructuring that should be done in advance? And sometimes you inherit the structure, and how do you disorganized it to do a reorganization to get out of that current structure? How does that happen in a lot of M and A transactions? Right. Yeah. And a lot of it is it's sort of the art of the possible and what it is. Right? And and because a lot of times, again, especially in cross border scenarios, there's a question of what works for us from a structure perspective and what works for the other side. You know, again, going back to actually, it's sort of the same Kadeem deal. We were dealing with the question of, okay, here's what's the most efficient for us. We're gonna unwind sort of the the sort of prior structure that was set up. And the buyer said, no. No. The seller said, no. No. No. If you do that, we're gonna get hit with terrible taxes. So, you know, we have to sort of meet and sort of work together in that middle in terms of we have a best answer for us, but is that gonna impact the other side? You know, we said a similar one actually in in Spain where, the seller was trying to convince us that there were, beneficial tax credits. And our our colleague in Spain was like, I don't see how you'd ever get the benefit of these things the way this is set up. And they said, yeah. Just kidding. Actually, you're right. We we we there's no way you're gonna get that benefit. We just didn't. We just yeah. We we we wanted to get credit for it. We wanted to so it can be a very kind of a a a tricky thing because you there's a lot of kind of moving parts to it, you know. Right. Can I just add one more thing? We only have one minute left. Okay. No. So in the acquisition, right, when you acquire foreign company, okay, and, there's a stock deal, there's a asset deal, right, from tax perspective, and the buyer wants to, you know, buyer wants to do the stock of asset deal. Right? Because with with the asset you you purchased with, you know, any residual value, goodwill, you get a basis. You get amortized. You get a tax benefit. A seller wants to kinda like a sale, right, like a stock deal. So in the foreign in the transaction of acquiring foreign company in the MA world, you know, there's option. Hey. From legal perspective, you can treat it as stock deal, but then, you know, we can make some election, you know, section three thirty eight election to treat it to that as asset deal to get a tax benefit out of it. So there are just a lot of, you know, planning and, you know how, you know, to to be to make the client be in the best tax efficient manner. That that's my point. Okay. So I think we're I think we're, I actually think we're out of time. We had no we were gonna we were gonna talk about transfer pricing and, so instead, I'm just gonna tell the bar guys, just don't come in, Ralph. We're gonna talk about transfer pricing. It's been an hour, guys. Don't Just stay here alone. But thank you all. Again, if you have any questions about what we're talking about, we're happy then. We are all happy to chat about it in great detail. Thank you, Ben. Okay. Well, I know there are a lot of speakers. Are there any questions for anybody? No. No. I mean, we could talk while we drink. Anything? We all set up in there? We could start it all. Alright. Well, thank you for coming. Thank you for our virtual audience. You can go to bed now. And please come again next year, and I'd like this full room to be filled. I've heard if we get over a 100 people, we might go in be going to a nice club locally. So let's try to get that attendance up and get a better venue for next year. So thank you for coming again.