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CPAs Talk Tech Biz

A blog for the owners, founders, and executives of privately held technology companies.
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By Jyothi Chillara
•
May 23, 2018

Proposed Tax on Digital Services in the EU Threatens Tech Giants

The European Union (EU) proposed a tax on digital services in the draft package for “Fair and Effective Taxation of the Digital Economy”, which it released on March 21, 2018.

According to the European Commission, top digital companies pay an average tax rate of only 9.5% in EU, which is less than the 23.3% paid by traditional companies. The aim of the proposal is to tax the business in the member state in which value is created, even though the business has little or no physical presence in that state. (more…)

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Categories: Spring 2018, The Musings of our Authors, Updates & Alerts
Tags: Digital companies, Digital services tax, Digital tax, Jyothi Chillara,
By Jyothi Chillara
•
January 24, 2017

Trump Presidency, Taxes, and Stock Option Compensation

We all have heard and know of people becoming millionaires overnight with “stock option” money, especially in Silicon Valley. Stock options are an important part of the compensation package for many employees in the technology sector. For companies, it is a tool to retain employees and motivate them to perform better as the company’s growth and success translates to their success.

The most common types of stock options are Incentive Stock Options (ISO’s) and Non-Qualified Stock Options (NQSO’s). The tax consequences to employees are as follows:

Incentive Stock Options (ISO) (more…)

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Categories: Business Taxation, Execs & Owners, Updates & Alerts
Tags: Incentive Stock Options, ISO, Non-Qualified Stock Options, NQSO, Stock Option Compensation, Taxes, Trump,
By Jyothi Chillara
•
July 6, 2016

Foreign Bank Account and Reporting (FBAR) - The Fight Continues!

June 30th deadline for filing the Form 114 – Individuals Filing the Report of Foreign Bank and Financial Accounts has passed, but the IRS continues its fight to secure US tax revenue from foreign financial accounts. (more…)

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Categories: Business Taxation, International Business Issues, Updates & Alerts
Tags: Deadline, FATCA, FBAR, Foreign Bank Account and Reporting, Form 114, Letters, Steps,
By Jyothi Chillara
•
June 8, 2016

India - Mauritius - Tax Love Affair Ends!

The treaty signed between India and Mauritius in 1983, a decade before India opened its door to foreign investors made Mauritius the most favored route to invest in India. Many foreign companies incorporated a holding company in Mauritius which held shares in an Indian company. The sale of shares in Indian company would not result in capital gains tax in India and Mauritius- thereby making it a preferred vehicle for foreign investment.

According to government data, from 2000 – 2015, about $94 billion, a third of all foreign direct investment into India, came via Mauritius. It was a boon to the Indian economy at the brink of liberalization in 1990’s, but gave rise to “round tripping” i.e., Income on which taxes were not paid was routed via Mauritius companies to avoid tax, revenue loss and treaty abuse. (more…)

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Categories: Business Taxation, International Business Issues, Updates & Alerts
Tags: India, Mauritius, Tax Treaty,
By Jyothi Chillara
•
December 23, 2015

Non-residents and U.S. stock options - Taxable or Not?

It is very common for U.S. parent companies to include key non-resident alien employees of their foreign subsidiaries in their stock option plans. What happens when the non-resident exercises the options or sells the options? Is the non-resident subject to withholding tax? Is there a U.S. tax filing requirement?

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Categories: International Business Issues, Operations Management, Updates & Alerts
Tags: employees, ISO, non-resident, NSO, RSU, taxable, u.s. stock options,
By Jyothi Chillara
•
June 24, 2015

June 30, 2015 - Impending FBAR Deadline

IRS recently reminded all taxpayers about the June 30 deadline for Foreign Bank and Financial Accounts (FBAR) reporting. FBAR filings have risen dramatically in recent years as FATCA phases in and other international compliance efforts have raised awareness among taxpayers with offshore assets. According to data from FINCEN, FBAR filings exceeded 1 Million in calendar year 2014.

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Categories: Business Taxation, Updates & Alerts
Tags: 2015, Deadline, FBAR, June 30,
By Jyothi Chillara
•
February 5, 2015

R&D Credit - Does it Apply to You?

It comes as no surprise that R&D credit has been retroactively extended for the 2014 tax year. According to sciencemag.org the credit has been extended 15 times and has undergone five major rewrites. It is likely to be extended again later this year to include 2015 and possibly future years.  Due to the federal government’s budget process, making the R&D credit permanent has proved elusive. However, California has managed to make their R&D credit rules permanent.

 Almost every prospect we meet is working on a technology idea that will have a significant impact on our daily lives.  Most often we are asked if the R&D credit is available for the technology they are developing.

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Categories: Updates & Alerts
Tags: R&D Credit,
September 3, 2014

Navigating FATCA Regulations - More Rules and Disclosure Requirements

By Jyothi Chillara, ASL Senior Tax Manager

The 2010 Foreign Account Tax Compliance Act (FATCA) contains a number of provisions that are intended to make it more difficult for U.S. taxpayers to use foreign accounts to shelter income from U.S. tax. These provisions are designed to prevent U.S persons from evading U.S Tax by holding income producing assets through accounts at foreign financial institutions (FFI’s) or through other foreign entities (non-financial foreign entities or “NFFEs”).

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Categories: Summer 2014
Tags: FATCA Regulations, Foreign Accounts, San Jose CPA,
By Jyothi Chillara
•
August 21, 2014

Navigating FATCA Regulations - More Rules and Disclosure Requirements

The 2010 Foreign Account Tax Compliance Act (FATCA) contains a number of provisions that are intended to make it more difficult for U.S. taxpayers to use foreign accounts to shelter income from U.S. tax. These provisions are designed to prevent U.S persons from evading U.S Tax by holding income producing assets through accounts at foreign financial institutions (FFI’s) or through other foreign entities (non-financial foreign entities or “NFFEs”)…

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Categories: International Business Issues
Tags: FATCA, Foreign Accounts, international tax,
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