Articles

Volume 37 Number 7 Friday, July 11, 2008

Financing Foreign Subsidiaries of U.S. Multinationals by Robert H. Dilworth, Esq.1 McDermott Will & Emery LLP Washington, D.C. and Oren Penn, Esq.2 PricewaterhouseCoopers LLP Washington, D.C. This article is intended to assist practitioners in identifying a number of the more important tax variables involved in developing a tax-efficient means of financing the activities of a U.S. multinational (hereinafter, a “US MNC”) and its domestic and foreign subsidiaries and affiliates. The variables listed will affect the structural decisions involved in many if not all financing decisions of US MNCs. (For example, within the affiliated group, who should borrow from third parties? Should working capital provided from within the group be intragroup debt or equity?)

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Investments by Sovereign Wealth Funds in the United States: Tax Issues and Challenges by Peter Guang Chen, Esq., CPA Deloitte Tax LLP New York, New York Sovereign Wealth Funds (“SWFs”) have been in existence for decades. These are government-owned funds which invest the surplus cash which the government has in excess of its normal operating and budgetary needs. The goals of SWFs can be diverse and may include objectives such as a means to counter the volatility of government revenue sources, a fund to build up savings for the future as a fund for contingencies, or a way to achieve purely economic aims such as additional revenue for the government.

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MEXICO-U.S. INVESTMENT: Mexican Tax Perspective

Overview of Selected Key Tax Structuring Issues Facing Multinationals Doing Business in Mexico by Oscar Castaneda, John A. Salerno, and Graciela Rivera PricewaterhouseCoopers LLP New York, New York Multinationals with branches or subsidiaries in Mexico have numerous tax considerations to address, both local and cross-border. This article, which constitutes an update of a prior article (36 Tax Mgmt. Int'l J. 319 (7/13/07)) to reflect changes stemming from the 2008 Mexican tax reform, provides an overview of some of the more pertinent tax structuring issues facing multinationals doing business in Mexico, including the Mexican tax treatment of payments for cross-border services; the tax-efficient financing of Mexican operations and related debt-versus-equity considerations; considerations relating to the introduction of the new Flat Tax; and the tax treatment of the sale or other transfer of Mexican shares.

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