Covington advises multinational corporations, financial institutions, and sovereign wealth funds on their most important and sensitive international tax matters. These matters include the tax-efficient structuring of inbound and outbound investments; the development, documentation, and defense of transfer pricing policies; and the successful resolution of international tax controversies.
Our international tax advisory work includes global tax minimization, intellectual property migration, nonfunctional currency transactions, complex financial instruments, cross-border tax arbitrage, cost-sharing arrangements, cash repatriation, and Subpart F and foreign tax credit planning. Our tax attorneys support the firm’s corporate attorneys in Beijing, Brussels, London, New York, San Francisco, and Washington (or the client’s own attorneys) in planning and implementing cross-border mergers, acquisitions, dispositions, and joint ventures.
We enjoy a long record of successfully settling major international tax controversies for clients of the firm, whether the matter is under examination, at Appeals, before the National Office, or in Competent Authority proceedings. We are almost always able to achieve a favorable settlement for our clients without resort to litigation, but if needed, we are prepared to proceed, and we prevail in that venue as well, to protect our clients' best interests.
Our extensive experience in managing tax controversies informs our judgment on the ultimate viability of tax-sensitive transactions, and we are often called upon by senior management of firm clients to opine upon the prudence of proceeding with tax strategies proposed by other advisors and the appropriate tax accrual for such strategies.
We have secured a number of innovative letter rulings involving international issues for our US and foreign clients and have been equally successful in obtaining legislative or regulatory relief on behalf of individual clients and industry groups.
To address tax issues involving multiple jurisdictions, we rely on our London office and our global network of correspondent firms (ordinarily one of the top tax advisory firms in each country), but we are also accustomed to collaborating with our clients’ own foreign advisors, including foreign offices of the global audit firms.
Representative Matters
- We have recently settled large transfer pricing disputes with the IRS involving cost sharing "buy-in" payments.
- We secured within a single year a landmark “outbound” letter ruling that gain from the sale of active subsidiaries did not convert a foreign corporation into a PFIC and a landmark “inbound” letter ruling that the US branch of a foreign bank could use the net operating losses of the bank’s liquidated US subsidiary.
- We pioneered the development of “virtual contract manufacturing” (the use of modern risk-management technology to achieve the tax savings of traditional “contract manufacturing” strategies with less tax risk and business disruption).
- We designed and implemented holding company structures to minimize global tax for numerous clients worldwide.
- We designed complex foreign currency hedging strategies for numerous foreign multinationals that reduced volatility in their global effective tax rate.
- Through careful study of underlying financial records and the application of tax treaty expertise, we converted what appeared to be a multi-million dollar tax deficiency into an even larger refund.
- We developed a program for reducing the valuation allowance on the net operating loss carryovers of multiple US enterprises owned by a major overseas bank.
- We managed a multinational service company’s global review of its intercompany headquarters services charges under attorney work product protection.
- We successfully defended a US multinational against multi-year transfer pricing adjustments and a corresponding disallowance of foreign tax credits.
- We provided strategic advice concerning the potential outcome of cross-border tax controversies to support the FIN 48 analysis of several major clients.
Accolades
- Reeves Westbrook and William Paul are listed in the International Who's Who of Tax Lawyers.
- Reeves Westbrook chairs the Transfer Pricing and Litigation Subcommittee of the International Bar Association’s Tax Committee.
- William Chip chairs the Transfer Pricing Subcommittee of the U.S. Council for International Business, chairs the OECD Subcommittee of the ABA Tax Section’s Committee on Foreign Activities of U.S. Taxpayers, and serves on the Tax Committee of the OECD’s Business and Industry Advisory Committee.
- Dirk Suringa is a member of the executive committee of the International Fiscal Association, USA Branch and also the Tax Management Advisory Board, U.S. International. Prior to joining the firm, Mr. Suringa served as Attorney-Advisor in the U.S. Treasury Department’s Office of International Tax Counsel.
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