Article
How multinational companies can use cash repatriation as a tax planning strategy
Aug. 4, 2021 · Authored by Roy Deaver, Andrea Monroe, Daniel Way
Many U.S. companies have found success operating overseas. Success, however, brings with it the question of what to do with cash accumulated in foreign countries. Determining whether to invest cash overseas or repatriate it to the United States is central to an effective cash management strategy.
Cash repatriation planning must balance financial, operational, and tax considerations. An effective strategy will benefit a company’s worldwide tax burden while furthering the company’s goals and getting cash to where it’s needed.
Before choosing to repatriate cash to the United States, companies should first weigh their options to find tax-efficient ways to do so. Below is an overview of repatriation tax-planning strategies and key benefits for multinational companies that covers the following questions:
What is cash repatriation?
Cash repatriation is the process of bringing accumulated cash from a foreign jurisdiction back to the headquarter country of operations. Cash repatriation can take many forms, from dividends paid by a foreign subsidiary to its U.S. parent company, to related party loans, royalties, and management fees.
The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.