Taiwan Parent Company + US Subsidiary: How to Handle Taxes?
Many Taiwanese companies establish a US subsidiary when expanding into the US market.
Important points to keep in mind:
1. The US subsidiary is an independent entity
- The US company must file and pay taxes in accordance with US tax laws.
- Transactions between the Taiwan parent company and the US subsidiary must be properly recorded.
2. Common parent-subsidiary transactions
- Taiwan company supplying goods to the US company
- Taiwan company charging service fees to the US company
- US company paying management fees to the Taiwan parent company
- Parent company providing funds/capital to the US subsidiary
These cross-border transactions may involve relevant tax and reporting regulations.
Special Note If the US company is held by a Taiwan company, and there are movements of funds, goods, or services between the Taiwan parent and the US subsidiary, filings such as Form 5472 may be required.
Therefore, do not wait until tax season to start organizing your records.
US Certified Public Accountant (CPA) Sophie Luo (羅霞) reminds you: After a Taiwan company establishes a US subsidiary, it is recommended to plan parent-subsidiary transactions and tax arrangements in advance to reduce the risk of filing errors in the future.
If you have any questions or need further assistance, feel free to reach out for a consultation:
- US CPA Sophie Luo (羅霞): +886 980 919 600
- E-mail: ustaxproservice@gmail.com
- Official Website: ustaxproservice.com (USTAX Service LLC)