Structural choices for expanding into the US – an issue-driven analysis

Published Date: 1 Jun 2023


Australian and US tax laws and the interaction between them are of galactic complexity. This article firstly identifies four archetype structures that can be adopted by a successful Australian enterprise for the concurrent operation of business in both countries, and then proceeds to discuss the relevant issues pertinent to each structure. This provides a coherent framework to elaborate on otherwise diversified or desultory taxation rules in both countries and the interaction between them, thereby achieving greater practical value. Further, a financial model is proposed to quantify the tax implications of each archetype structure in terms of the effective tax rate. This can be further developed to measure tax on both nominal and present value terms, which can ideally inform the decision by an Australian enterprise considering expanding into the US. In the authors’ view, the tax principles derived from the discussion herein and the financial model should serve as a launch pad for further exploration of the tax issues arising from the concurrent operation of business in both countries.

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