VOL. 1 • 2013 - German American Chamber of Commerce New York

VOL. 1 • 2013
VOL. 1 • 2013
CONTENTS
I.Corporate & Finance
V.Tax
1.Financial Markets
Chadbourne & Parke LLP
Critical U.S. Legal Issues
to Consider When Restructuring
Corporate Bonds...............................3
1.International Tax
Dworken, Hillman, LaMorte &
Sterczala, P.C.
Doing Business in the US –
When does a Foreign Based
Business Cross the Line?.................. 18
2.International Transactions
Sidney N. Weiss
U.S. IRANIAN EMBARGOES
and SANCTIONS AND
GERMAN BUSINESS.........................6
II.Employment & Labor
1.International Employment Law
Phillips Nizer LLP
Entsendung deutscher
Angestellter in eine
US-Tochtergesellschaft.......................8
Deloitte Tax LLP
Swerving from the cliff:
American Taxpayer Relief Act
of 2012.......................................... 20
ParenteBeard LLC
Determination of your
tax liability status
in the United States......................... 22
III.Energy, Environmental & Land
Development
Rödl & Partner
Folgen ausgewählter
US-Steueränderungen
auf deutsches Investment
in den USA..................................... 24
1.Environmental
Hodgson Russ LLP
The Far Reach Of
California Proposition 65.................. 11
2.State and Local Tax
WeiserMazars LLP
A Primer on Sales
and Use Tax................................... 26
IV.Intellectual Property
1.International IP
Gibbons P.C.
Trade Secrets – What You Don’t
Safeguard Might Hurt you!................ 13
2.IP Litigation
Nietzer & Häusler
Protect your Domain: Gefahr
des Domainverlustes durch
U.S.-Versäumnisurteil....................... 15
3.Patents
Vonnemann Kloiber & Kollegen
Unitary European Patent and
Unified Patent Litigation System
are about to enter the home stretch!...... 17
3.Others
AugustinPartners LLC
Late Filing Can Be Costly
Beyond Late Filing and
Payment Penalties........................... 28
VI.Others
1.European Law
Noerr LLP
Recast of EU Regulation
on Cosmetics: Far-Reaching
Changes for Manufacturers
and Vendors of Cosmetics
in the European Union
as of July 2013...............................30
VOL. 1 • 2013
Critical U.S. Legal Issues to Consider When
Restructuring Corporate Bonds
The recent financial crisis has prompted, and in some cases forced, companies to
adjust the liability side of their balance sheets. German companies that have issued
bonds in the U.S. capital markets need to consider a variety of U.S. securities law
issues when contemplating a restructuring. Their options depend to some extent on
whether or not they have access to cash.
Marc M. Rossell
[email protected]
Cash Available
Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, NY 10112
T +1 (212) 408 1057
F +1 (646) 710 1057
www.chadbourne.com
• If the indenture permits the company to redeem the bonds prior to maturity, then
A company with available cash can consider an optional redemption, open market
purchases or a cash tender offer.
it can consider an optional redemption. But many indentures restrict optional
redemptions in the early years—the so-called “non-call period”—and in later years
redemption may be subject to the payment of a premium. Some indentures allow
redemptions at any time subject to optional payment of a “make-whole” premium
based on the recuperation of the yield through maturity, a price that is usually quite
high. Where the bonds are trading in the market at a discount to par value, these
early redemption options will be particularly unappealing.
• Most indentures do not restrict the company from repurchasing its bonds in
the open market. In that case, and assuming no other prohibitions apply, then
cash repurchases in the open market can be made through privately negotiated
transactions with individual holders. Care should be taken to avoid characterizing
such purchases as a “tender offer,” which would result in the application of certain
procedural and other requirements.
• Finally, a company may decide to make a cash tender offer to its bondholders,
which would be regulated by Section 14(e) of the Securities Exchange Act of 1934
(the “Exchange Act”) and Regulation 14E thereunder. These rules generally prohibit
fraudulent and manipulative activity and require that the tender offer be kept
open for a minimum of 20 business days from commencement and 10 business
days from notice of a change in either the percentage of securities sought, the
consideration offered or the dealer’s soliciting fee.
No Cash Available
Without cash, the most likely alternative is an exchange offer of new securities for the
existing securities. Any exchange of newly-issued securities for outstanding bonds is
3
VOL. 1 • 2013
Marc M. Rossell
[email protected]
Critical U.S. Legal Issues to Consider When Restructuring Corporate Bonds
Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, NY 10112
T +1 (212) 408 1057
F +1 (646) 710 1057
www.chadbourne.com
considered an offer of securities under the Securities Act of 1933 (the “Securities Act”)
and, thus, it must be registered with the SEC unless an exemption is available. The
most common exemptions are the Section 3(a)(9) exemption and the so-called “private
placement” or Section 4(2) exemption. Exchange offers are also considered tender
offers and, thus, the Exchange Act tender offer rules apply.
• Section 3(a)(9) of the Securities Act allows a company to offer and sell new
securities to existing holders of its securities without registration, subject to certain
conditions. The offering must be made exclusively by exchange with its existing
holders and the issuer of the new securities must be the same as the issuer of
the old securities, which can present structural challenges if there are parent or
subsidiary guaranties involved. In a Section 3(a)(9) exchange offer, there is no
restriction on general solicitation or advertising, thus allowing unrestricted publicity,
and there are no restrictions on the nature of the offerees. However, there are
restrictions on the way dealer managers are compensated; generally, “success” fees
are not allowed.
• Another exemption available is the so-called “private placement” exemption under
Section 4(2) of the Securities Act, under which the offer and sale are made only to
accredited investors such as large institutional holders; non-US persons are often
solicited in reliance on the separate exemption provided by Regulation S of the
Securities Act. Historically, one important limitation of this exemption is that there
can be no general solicitation or advertising, a restriction on publicity that needs to
be taken into account when considering this alternative. Recent legislation passed
by the US Congress mandates the SEC to amend its rules relating to this restriction
in the context of private offerings so this limitation may ultimately disappear. The
good news is that this exemption has no limitation as to how broker dealers are
compensated in connection with the other.
• Another option is a registered exchange offer. A German company can file a
registration statement on Form F-4 with the SEC to register the offer and sale of
the new securities to the holders of its existing bonds. In a registered exchange
offer, there are no structural restrictions as there may be in a Section 3(a)(9)
exchange and dealer-managers can freely solicit tenders and all holders can
participate, including retail investors. But companies cannot generally use existing
“shelf” registration statements to conduct an exchange offer and the SEC may
elect to review a new registration statement, a process that can be lengthy and
unpredictable. Non-SEC reporting German companies face additional disclosure
4
VOL. 1 • 2013
Marc M. Rossell
[email protected]
Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, NY 10112
T +1 (212) 408 1057
F +1 (646) 710 1057
www.chadbourne.com
Critical U.S. Legal Issues to Consider When Restructuring Corporate Bonds
hurdles and financial information issues and would become subject to SEC reporting
requirements on an ongoing basis as well as to other requirements under the
Sarbanes-Oxley Act and other statutes. Companies are also subject to heightened
liabilities under the Securities Act for disclosures and omissions in a registration
statement and prospectus.
Undertaking a financial restructuring involving corporate bonds can be a time-consuming
and often complex task and a company would be well advised to seek appropriate
advice from competent legal counsel early on in the decision-making process.
5
VOL. 1 • 2013
U.S. IRANIAN EMBARGOES and SANCTIONS
AND GERMAN BUSINESS
Sidney N. Weiss
Attorney at Law
Sidney N. Weiss
675 Third Avenue
New York, NY 10017
T +1 (212) 986 5309
F +1 (212) 986 5629
[email protected]
www.weisslaw.net
6
U.S. sanctions against doing business with Iran are severe and carry harsh penalties
against violators. German companies and individuals residing in or doing business in
the United States are treated the same as United States companies and individuals.
However, in many circumstances, German companies and individuals residing abroad,
and having no connection with the United States also come within the scope of U.S.
Iranian sanctions.
Iranian Sanctions prohibit at least three types of activity. First, the embargoes prohibit
all unlicensed activity between “U.S. persons” and Iran. Second, the embargoes prohibit
anyone (U.S. person or not, and anywhere in the world) to export certain U.S. products
and services to Iran. Third, U.S. persons are prohibited from transacting business or
assisting individuals or entities which may be on the various U.S. sanctions lists.
“U.S. persons” are U.S. citizens, U.S. residents (Green Card holders), U.S. companies,
and affiliates of U.S. companies. In certain circumstances, the Iranian embargos and
sanctions extend to entities which are controlled by U.S. persons. The law prohibits U.S.
persons from engaging in all transactions with Iran involving goods, services, technology,
or money transfers of any kind. United States persons may also not assist in any of
those transactions. For practical purposes, this means that U.S. persons (including
German nationals living in Germany) may not have anything to do with such transactions,
including providing advice, engaging in discussions, etc, involving such transactions.
U.S. sanctions against Iran also prohibit the exportation or re-exportation of United
States goods, services, and technology to Iran. The prohibition on exportation or reexportation of U.S. goods, services, and technology applies whether or not the exporter
is a United States or foreign person, and whether or not the exportation or re-exportation
occurs from the United States or elsewhere. This prohibition also applies in almost all
cases in which the U.S. part or technology is incorporated into another product. Under
this scenario, German persons and entities who export U.S. goods, services or technology
to Iran (or incorporate them into other products or technology which are exported to Iran)
have violated U.S. law.
Moreover, there does not need to be an actual exportation or re-exportation of goods,
services or technology to Iran for a violation to occur. Whenever U.S. goods, services,
and technology are discussed with, or exposed to, an Iranian national, an export or reexport to Iran is “deemed” to have occurred, and United States law has been violated.
The deemed exportation in such circumstances may occur in a conference room or
office in Germany, or in a telephone or email conversation to which an Iranian national
has access. Typical examples of “deemed exports” to Iran occur when any portion of
VOL. 1 • 2013
Sidney N. Weiss
Attorney at Law
U.S. IRANIAN EMBARGOES and SANCTIONS AND GERMAN BUSINESS
Sidney N. Weiss
675 Third Avenue
New York, NY 10017
T +1 (212) 986 5309
F +1 (212) 986 5629
[email protected]
www.weisslaw.net
the transaction is discussed with Iranian nationals present, or when the technology is
discussed or reviewed with an Iranian national. Deemed exports also occur when an
Iranian national has access to servers containing U.S. technology, or when an Iranian
national reviews documents for due diligence purposes and thereby has access to U.S.
technology or an analysis of U.S. technology.
The Iranian sanctions are backed by a draconian set of penalties. Criminal penalties
may be as much as $1,000,000.00 and 20 years in prison for each violation. Civil
penalties may be the greater of $250,000.00 or twice the amount of the transaction that
is the subject of the violation. With such severe penalties, companies and individuals
are eager to reach settlements with the authorities in order to reduce their civil and
criminal exposures. As a result, judicial intervention and review is not common and
the administrative authorities have a great deal of discretion in administering the law
and its penalties. Consequently, a certain amount of arbitrariness has crept into the
administration of the law.
Accordingly, any German person or entity must approach doing business with
Iran with full knowledge and awareness of U.S. law and obligations and implement
procedures to protect itself from the scope of U.S. sanctions.
Sidney N. Weiss is a customs and international trade lawyer in New York, and the
former president of the Customs and International Trade Bar Association, the largest
association of customs and trade lawyers in the world.
7
VOL. 1 • 2013
Entsendung deutscher Angestellter in eine
US-Tochtergesellschaft
Die zeitweilige Entsendung von Mitarbeitern eines deutschen Unternehmens
in eine US-Tochtergesellschaft wirft diverse rechtliche Fragen auf. Soll das
deutsche Mutterunternehmen der Arbeitgeber bleiben oder soll die amerikanische
Tochtergesellschaft zur Arbeitgeberin werden? Wie wirkt sich die Gestaltung der
Entsendung auf die Sozialversicherung aus?
Florian von Eyb, LL.M.
Attorney at Law in New York
Rechtsanwalt (admitted in Germany)
T+1 (212) 841 0720
[email protected]
I. Echte Entsendung: Dt. Gesellschaft bleibt Arbeitgeberin
Um eine echte Entsendung im Sinne des deutschen Sozialgesetzbuches handelt es
sich, wenn
• das deutsche Mutterhaus Arbeitgeber bleibt und weiterhin das Gehalt bezahlt;
• das deutsche Mutterhaus das Weisungsrecht behält;
• die Entsendung auf 5 Jahre begrenzt ist; und
• der Arbeitnehmer organisatorisch in Deutschland integriert bleibt.
Die Folge ist eine sog. Ausstrahlungswirkung des deutschen Sozialgesetzbuches.
Diese bewirkt, dass der Arbeitnehmer während der Tätigkeit in den USA weiter
in der deutschen Sozial-, d.h. Renten-, Kranken-, Pflege-, Arbeitslosen- und
Unfallversicherung bleiben kann.
II. Keine echte Entsendung: US-Gesellschaft wird Arbeitgeberin
Steven H. Thal
International Counsel
T+1 (212) 841 0742
U.S. Mobile:
+1 (917) 757 6200
International Mobile:
+49 (172) 67 33 36 5
[email protected]
Phillips Nizer LLP
666 Fifth Avenue
New York, NY 10103
F+1 (212) 262 5152
www.phillipsnizer.com
Wenn ein Mitarbeiter von der US-Tochter angestellt und sein Vertrag mit der deutschen
Muttergesellschaft nur ruhend gestellt wird, gilt dies nicht als echte Entsendung. In
der Regel endet damit seine Sozialversicherung in Deutschland. Ausnahmsweise kann
er jedoch beantragen, dass die Rentenversicherung weiter in Deutschland läuft. In
einem Ruhestellungsvertrag kann geregelt werden, dass die Muttergesellschaft die
Rentenversicherung weiterbezahlt, während die US-Tochter für das Gehalt aufkommt.
Kranken-, Arbeitslosen-, Unfall- und Pflegeversicherung müsste die US-Tochter nach
amerikanischem Recht bereitstellen, sie sind nicht Teil der Ausnahmegenehmigung und
bestehen nicht in Deutschland weiter.
III. Risiken der echten Entsendung und Vorteile einer Anstellung durch
die US-Tochter
Auf den ersten Blick erscheint es vorteilhaft, wenn der Betroffene bei der deutschen
Muttergesellschaft angestellt bleibt. Auf diese Weise befindet man sich weiterhin
8
VOL. 1 • 2013
Florian von Eyb, LL.M.
Attorney at Law in New York
Rechtsanwalt (admitted in Germany)
T+1 (212) 841 0720
[email protected]
Steven H. Thal
International Counsel
T+1 (212) 841 0742
U.S. Mobile:
+1 (917) 757 6200
International Mobile:
+49 (172) 67 33 36 5
[email protected]
Phillips Nizer LLP
666 Fifth Avenue
New York, NY 10103
F+1 (212) 262 5152
www.phillipsnizer.com
Entsendung deutscher Angestellter in eine US-Tochtergesellschaft
im Anwendungsbereich des bekannten deutschen Rechts und muss lediglich eine
Vertragsmodifizierung vornehmen. Ein amerikanischer Arbeitsvertrag wird nicht erforderlich.
Zudem kann der Arbeitnehmer Mitglied in der deutschen Sozialversicherung bleiben.
Gegen die fortgesetzte Anstellung in Deutschland (echte Entsendung) sprechen
jedoch erhebliche Nachteile:
• Das deutsche Mutterhaus würde durch den Mitarbeiter eine Betriebsstätte in
den USA gründen und sich so direkter Haftung für dessen Handlungen vor USGerichten aussetzen, womit ein wesentlicher Zweck der Gründung der US-Tochter
obsolet würde.
• Durch den Mitarbeiter würde die deutsche Gesellschaft in den USA unmittelbar
tätig und müsste sich im jeweiligen Staat als Unternehmen anmelden, wodurch
Gebühren und Verwaltungsaufwand entstehen.
• Die deutsche Muttergesellschaft würde ggf. in den USA steuerpflichtig.
Dagegen hat die Anstellung und Versicherung des Mitarbeiters bei der US-Tochter
neben der Vermeidung dieser Risiken auch weitere Vorteile:
• Für die Visumsbeantragung ist es günstiger, wenn der Mitarbeiter von der
US-Gesellschaft angestellt und bezahlt wird. Beispielsweise verlangt ein
E-Investorenvisum den Nachweis, dass die US-Tochter den Visumsnehmer
finanzieren kann. Ein L-Inter-Company-Transfervisum setzt gerade den Wechsel
von einem zum anderen Unternehmen einer Gruppe voraus.
• Unter Umständen wird eine doppelte Sozialversicherungspflicht vermieden,
denn bei der echten Entsendung kollidieren die deutsche und die amerikanische
Versicherungspflicht. Das zwischenstaatliche Abkommen sieht nur für die
Rentenversicherung eine Ausnahme vor. Hinzu kommt, dass viele US-Unternehmen
ihre Mitarbeiterschaft ohnehin als Gesamtheit krankenversichern lassen. Die
„unechte“ Entsendung vermeidet somit doppelte Beiträge.
• Eine US-Krankenversicherung vermeidet die Notwendigkeit von Vorauszahlungen,
die im Falle eines Notfalls extrem hoch sein und die Behandlung verzögern
könnten, wenn zunächst die Gültigkeit einer deutschen Krankenversicherung
geprüft werden muss.
IV. Fazit
Die Entscheidung, ob ein Arbeitnehmer bei einem Auslandsaufenthalt von der
deutschen Muttergesellschaft entsandt oder bei der amerikanischen Tochtergesellschaft
9
VOL. 1 • 2013
Florian von Eyb, LL.M.
Attorney at Law in New York
Rechtsanwalt (admitted in Germany)
T+1 (212) 841 0720
[email protected]
Steven H. Thal
International Counsel
T+1 (212) 841 0742
U.S. Mobile:
+1 (917) 757 6200
International Mobile:
+49 (172) 67 33 36 5
[email protected]
Phillips Nizer LLP
666 Fifth Avenue
New York, NY 10103
F+1 (212) 262 5152
www.phillipsnizer.com
10
Entsendung deutscher Angestellter in eine US-Tochtergesellschaft
angestellt sein sollte, bedarf gründlicher Überlegung im Einzelfall. Die Vermeidung
von Haftungsrisiken, Steuer-, Gebühren- und Verwaltungsaufwand sowie die Vorteile
bei Visums- und Sozialversicherungsaspekten sprechen für eine Anstellung bei der
amerikanischen Tochtergesellschaft und überwiegen meist die Argumente für eine
echte Entsendung, bei der die deutsche Gesellschaft Arbeitgeberin bleibt.
VOL. 1 • 2013
The Far Reach Of California Proposition 65
Charles W. Malcomb
Associate
Environment & Energy Practice Group
Municipal Law Practice Group
Oil & Gas Practice Group
Wind Energy Practice Group
Buffalo Office
D+1 (716) 848 1261
[email protected]
In 1986, California voters approved an initiative to address their growing concerns with
exposure to toxic chemicals. That initiative became the Safe Drinking Water and Toxic
Enforcement Act of 1986, better known by its original name of Proposition 65. When the
initiative came up, it was not directly contemplated that it would apply to products being
sold at retail. However, over the years Proposition 65 has significantly evolved and given
rise to thousands of lawsuits against retailers and manufacturers of products that contain
“hazardous substances,” including lead, phthalates, cadmium, and acrilymides. In light
of the far reach that has developed under Proposition 65, any foreign business selling,
distributing and/or manufacturing items in the United States should be well aware of its
potential application.
Why Should I Care About California If I Don’t Do Business There?
Due to the size of California’s economy, its regulations have become the practical national
standard for products. In addition, one need not be doing business in California to be
in the chain of Proposition 65 litigation. Imagine a Massachusetts manufacturer that
sells to a New Jersey distributor which in turn sells to a retailer doing business in New
York. Should one of the items sold to the retailer doing business in New York end up in
California, the manufacturer, the distributor and retailer could be potentially be named as
defendants in a Proposition 65 lawsuit, and the venue would be in California.
Required Warning Label
Maureen R. Monaghan
Senior Associate
D+1 (646) 218 7544
[email protected]
Hodgson Russ LLP
1540 Broadway, 24th Floor
New York, NY 10036
F+1 (212) 751 0928
www.hodgsonruss.com
11
Proposition 65 requires California to publish a list of chemicals – updated at least once
a year – known to cause cancer or birth defects or other reproductive harm. Over 900
such chemicals have been identified by the State since the list was first published in
1987, including formaldehyde, benzene, crystalline silica, and some heavy metals.
Proposition 65 prohibits businesses from knowingly exposing persons in California
to any of these chemicals without first providing a ‘’clear and reasonable warning.” A
proper warning must state in clear, reasonable and legible language that the product
contains a chemical known to the State of California to cause cancer, birth defects or
other reproductive harm.
Safe harbor levels (levels of exposure that trigger the warning requirement) have been
established for many of the chemicals listed under Proposition 65. Businesses that cause
exposures greater than the safe harbor level must provide Proposition 65 warnings. In
the absence of a safe harbor number, regulations provide guidance for calculating “no
significant risk levels” to obviate the necessity of a warning label. As many attorneys have
built their businesses entirely on filing Proposition 65 lawsuits, many businesses prefer
VOL. 1 • 2013
Charles W. Malcomb
Associate
Environment & Energy Practice Group
Municipal Law Practice Group
Oil & Gas Practice Group
Wind Energy Practice Group
Buffalo Office
D+1 (716) 848 1261
[email protected]
Maureen R. Monaghan
Senior Associate
D+1 (646) 218 7544
[email protected]
Hodgson Russ LLP
1540 Broadway, 24th Floor
New York, NY 10036
F+1 (212) 751 0928
www.hodgsonruss.com
The Far Reach Of California Proposition 65
to place a Proposition 65 warning even if there is severe doubt that their products really
may show human exposure that causes any health risk.
Enforcement
The greatest threat of Proposition 65 is that, in addition to the state and local district
attorneys, private citizens can enforce the statute and recover penalties and litigation
costs (the so-called environmental bounty hunter provision), plus attorney fees. A plaintiff
may seek injunctive relief as well as penalties of $2,500 per violation per day. From
2005 to 2010 private parties entered into approximately 1,020 settlements relating to
Proposition 65, requiring total payments of $74.9 million (which did not include the costs
of defending the suit or reformulating products), or $73,000 per settlement on average.
In 2011, almost 75% of the total $15.9 million paid in 327 private suit settlements was
for plaintiffs’ legal fees
Settlements have pertained to a wide range of consumer products, including, vitamin
supplements, crystal, dinnerware, cookware, glassware, products containing brass
(such as faucets), beverage dispensers, cappuccino makers and other heating vessels,
medical devices, food items, children’s toys, cosmetics and a wide variety of personal
care products (e.g., shampoo, sunscreen, lotions). Proposition 65 settlements often result
in reformulation of products so that they contain fewer chemicals and other substances
known to cause cancer or reproductive harm.
Compliance
Retailers and manufacturers whose products could foreseeably end up in California
should ensure Proposition 65 compliance by learning upfront whether or not their
products contain chemicals listed under Proposition 65 and, if so, should post Proposition
65 warnings. Doing so will insulate retailers and manufactures from liability.
12
VOL. 1 • 2013
Trade Secrets – What You Don’t Safeguard
Might Hurt You!
David E. De Lorenzi
Chair
Intellectual Property
T+1 (973) 596 4743
F+1 (973) 639 6235
[email protected]
Ralph A. Dengler
Director
Intellectual Property
T+1 (973) 596 4825
F+1 (973) 639 6381
[email protected]
Gibbons P.C.
One Gateway Center
Newark, NJ 07102
www.gibbonslaw.com
13
Trade secrets, which broadly consist of valuable information that is kept secret to afford
an economic advantage, take on different forms: customer lists; formulas, patterns,
projections and recipes. Just as with other forms of Intellectual Property, such as patents,
trademarks and copyrights, companies need to strictly enforce policies relating to trade
secrets and vigilantly protect them.
Yet, in a recent global report by Symantec, a disturbing 50% of employees who lost or
left their jobs in the past 12 months indicated they kept confidential company data upon
their departure. Of these, an unsettling 40% indicated they planned to use this information
in their new jobs, despite its proprietary nature. Exacerbating the situation is the perception
on the part of employees that it is acceptable to retain confidential corporate information,
and that employers do not care. Obviously, employers should – and do – care.
As does the U.S. government. The White House recently released a report, the
“Administration Strategy On Mitigating The Theft Of U.S. Trade Secrets,” setting forth its
multi-pronged approach to protect “[o]ur single greatest asset . . . the innovation and the
ingenuity and creativity of the American people.” This report follows the recent passage
of the Theft of Trade Secrets Clarification Act of 2012, (S. 3642), which expanded the
definition of trade secrets under the Economic Espionage Act of 1996 (EEA), 18 U.S.C. §
1832. This broadened definition makes clear that trade secrets protected by the EEA may
be those merely “related to” a product or service used in or intended for use in interstate
or foreign commerce, even if the trade secret itself is not used directly in such product or
service. Thus, protected trade secrets now encompass technical know-how that need not
become part of a product or service to be enforced.
This legislation closed a loophole in the EEA and National Stolen Property Act
(“NSPA”), 18 U.S.C. § 2314, as highlighted by the decision of the U.S. Court of Appeals
for the Second Circuit in United States v. Aleynikov. There, the Second Circuit reversed
a jury’s finding that Aleynikov, a computer programmer, breached his confidentiality
agreement with his employer, Goldman Sachs, when he misappropriated proprietary
computer code relating to its high-frequency trading system. The court determined that
Aleynikov should never have faced criminal charges for his conduct under either the EEA
or the NSPA. Regarding the EEA, the court found that Goldman’s trading system was
neither “produced for” nor “placed in” commerce because Goldman had no intention
of selling the system to anyone, and hence, did not constitute trade secrets covered
by the Act. Further, the court noted that storing an intangible property (source code)
on a tangible medium (a remote server) does not change the intangible property into a
stolen “good,” under the NSPA. Thus, although Aleynikov should have known that his
VOL. 1 • 2013
David E. De Lorenzi
Chair
Intellectual Property
T+1 (973) 596 4743
F+1 (973) 639 6235
[email protected]
Ralph A. Dengler
Director
Intellectual Property
T+1 (973) 596 4825
F+1 (973) 639 6381
[email protected]
Gibbons P.C.
One Gateway Center
Newark, NJ 07102
www.gibbonslaw.com
Trade Secrets – What You Don’t Safeguard Might Hurt You!
conduct was in breach of his confidentiality obligations to his former employer, the court
nevertheless ruled it was not violative of either of the EEA or the NSPA.
Previously, in TianRui Group Co. Ltd. v. U.S. Int’l Trade Comm’n, the Court of
Appeals for the Federal Circuit affirmed that the International Trade Commission (ITC)
has authority under Section 337 of the Tariff Act of 1930 to investigate and grant relief
based on overseas conduct in order to protect domestic industries. This seminal decision
gives teeth to U.S. companies seeking to prevent the importation of articles into the US
that resulted from a misappropriation taking place overseas.
Despite these significant developments, and parallel attention in many state courts
and legislatures, companies would be remiss to rely upon government action or litigation
alone to protect their confidential and proprietary information. Rather, employers should
develop, implement and police an internal trade secrets protection plan. At minimum,
this should include: 1) auditing their employment policies, non-disclosure and restrictive
covenant agreements, particularly in light of recent legislative changes; 2) analyzing their
physical security of files, information and computer equipment, as well as access for
employees, and particularly off-site or remote data access; and 3) scrutinizing departing
employees well before data potentially can be misappropriated.
Implementing these best practices to safeguard trade secrets must be a proactive part
of any business strategy.
Ralph A. Dengler, a Director in the Intellectual Property Department at Gibbons, is of
German-American heritage and speaks German. He has extensive experience litigating
Intellectual Property matters. The firm’s Intellectual Property Department provides a full
range of patent, trademark, copyright, unfair competition, E-commerce, trade secret,
and computer and Internet law experience, including litigation, strategic licensing and
transactional work, patent prosecution, trademark and copyright registrations, corporate
due diligence, intellectual property audits and general intellectual property counseling.
14
VOL. 1 • 2013
Protect your Domain: Gefahr des Domainverlustes
durch U.S.-Versäumnisurteil
Marcus Römer, LL.M.
Fachanwalt für Handels- und
Gesellschaftsrecht
Attorney at Law (New York, U.S.
Supreme Court)
Nietzer & Häusler
Rechtsanwälte • Attorneys at Law
(USA) • Notar
Allee 40, 13. Stockwerk
74072 Heilbronn
T+49 (71) 31 20 39 10
F+49 (71) 31 20 39 12 0
[email protected]
www.unternehmensrecht.com
Blogs:www.usa-recht.de
www.nietzer.info
15
Eine neue Entscheidung des Bundesverfassungsgerichts verdeutlicht die Risiken von
Inhabern ausländischer Domains (z. B. .us), und sogenannter generic Top Level-Domains
(z. B. .net, .com, .cc, .biz, .info).
Das Bundesverfassungsgericht (2 BvR 2805/12) hat kürzlich die Klagezustellung
eines U.S.-Gerichts in Domain-Streitigkeiten in Deutschland generell für zulässig erachtet.
Damit besteht für Domaininhaber ein erhöhter Wachsamkeits- und Handlungsbedarf.
Reagiert der betreffende Domain-Inhaber auf eine entsprechende, ihm zugestellte U.S.Klage nicht oder nicht rechtzeitig, so riskiert er, dass im betreffenden U.S.-Verfahren
Versäumnisurteil ergeht und er hierdurch die Domain „verliert“. Dies selbst, wenn die in
den USA erhobene Klage letztlich unzulässig oder unbegründet war.
Der Entscheidung lag ein Fall zu Grunde, in dem ein ausländisches Unternehmen
die deutsche Inhaberin einer „.net“ Domain u.a. auf Löschung vor einem US-Gericht
verklagte. Die Beklagte, ein deutsches Unternehmen, versuchte sich gegen die
Zustellung der U.S.-Klage in Deutschland zur Wehr zu setzten. Dabei fuhr das deutsche
Unternehmen das gesamte „Arsenal“ von Argumenten gegen ein Gerichtsverfahren in den
USA und das US-Recht im Allgemeinen auf. Es argumentierte gegen die Unzulässigkeit
von im US-Recht möglichen Ansprüchen auf Strafschadensersatz (punitive damages),
dreifachen Schadensersatz (treble damages) sowie im amerikanischen Zivilprozessrecht
vorhandene Kostentragungsregelungen, welchen zufolge jede Partei unabhängig vom
Erfolg des Prozesses ihre eigenen Prozesskosten selbst zu tragen hat (american rule).
Das Bundesverfassungsgericht hat nach diese Argumente nach erfolgter Prüfung
jedoch zurückgewiesen und die Klagezustellung in Deutschland für zulässig erachtet.
In seiner Entscheidung betont es, dass für die Zurückweisung der Zustellung einer
ausländischen Klage noch weit striktere Kriterien gelten, als für die Anerkennung eines
ausländischen Urteils in Deutschland. Das Bundesverfassungsgericht stellt in der
Entscheidung folgende Aspekte besonders heraus:
Die Zustellung einer US-Klage in Deutschland erfolgt auch dann zulässigerweise,
wenn das der Klage zu Grunde liegende US-Recht für das beklagte deutsche
Unternehmen weitreichende Nachteile mit sich bringt. Ausnahmen hiervon sind nur in
Fällen möglich, in welchen die Hoheitsrechte oder die Sicherheit der Bundesrepublik
Deutschland gefährdet sind. Dies ist bei der bloßen Zustellung einer Klage in der
Regel aber nicht der Fall. Von dem strengen Maßstab der Gefährdung der Sicherheit
der Bundesrepublik Deutschland, bzw. deren Hoheitsrechte ist der wesentlich weniger
strenge Maßstab für die Anerkennung rechtskräftiger ausländischer Urteile zwecks einer
anschließenden Vollstreckung in Deutschland zu unterscheiden.
VOL. 1 • 2013
Marcus Römer, LL.M.
Fachanwalt für Handels- und
Gesellschaftsrecht
Attorney at Law (New York, U.S.
Supreme Court)
Nietzer & Häusler
Rechtsanwälte • Attorneys at Law
(USA) • Notar
Allee 40, 13. Stockwerk
74072 Heilbronn
T+49 (71) 31 20 39 10
F+49 (71) 31 20 39 12 0
[email protected]
www.unternehmensrecht.com
Blogs:www.usa-recht.de
www.nietzer.info
16
Protect your Domain: Gefahr des Domainverlustes durch U.S.-Versäumnisurteil
Selbst Straf-Schadensersatz (punitive damages), dreifacher Schadensersatz (treble
damages) sowie die von deutschen Rechtsvorstellungen deutlich abweichenden
Kostentragungsregelungen im amerikanischen Zivilverfahren ändern hieran nichts.
Speziell die Kostentragungsregelungen im US-Recht – so das Bundesverfassungsgericht
– seien lediglich eine Folge der unternehmerischen Entscheidung für eine
grenzüberschreitende Teilnahme am Wirtschaftsleben und damit eine bewusst in Kauf
zu nehmende Konsequenz unternehmerischen Handelns.
Das bedeutet für die unternehmerische Praxis: Deutsche Unternehmen sollten bei
vor US-amerikanischen erhobenen Domain-Klagen innerhalb der gesetzten Fristen
reagieren, auch wenn die mit der Klage geltend gemachten Ansprüche haltlos erscheinen
mögen. Ansonsten droht der Erlass eines Versäumnisurteils in den USA, welches
bewirkt, dass in den USA befindliche Vermögenswerte des Unternehmens gefährdet
sind. Dies sind insbesondere die Domainnamen bei generic Top Level-Domains wie .net,
.com, .cc, .biz, .info.
Schließlich sollten vor diesem Hintergrund für ausländische Top Level-Domains (z. B.
.us) und für generic Top Level-Domains auch vorsorglich entsprechende Rückstellungen
für Rechtsstreite im Ausland gebildet werden. Denn selbst bei einem Prozesserfolg in
den USA wird das Unternehmen in der Regel die eigenen Verfahrenskosten selbst zu
tragen haben.
Als eine seit über 17 Jahren auf deutsches und U.S.-amerikanisches
Unternehmensrecht spezialisierte Wirtschaftskanzlei (nunmehr auch auf China und
UK ausgerichtet) verfügt NIETZER & HÄUSLER über entsprechende Erfahrungen im
Umgang mit US-Klagen und berät Sie gerne bei der Abwehr entsprechender Ansprüche
in Deutschland und den USA.
VOL. 1 • 2013
Unitary European Patent and Unified Patent
Litigation System are about to enter the home stretch!
Dr. Lars Hoppe
German and European Patent
and Trademark Attorney
Patent Attorneys
Vonnemann Kloiber & Kollegen
EUROPEAN PATENT ATTORNEYS
Edisonstraße 2
87437 Kempten (Germany)
T +49 (0)83 12 32 91
F +49 (0)83 11 77 15
[email protected]
www.vonnemann.de
17
As reported previously (GACCNY newsletter vol. 2, 2011 and vol. 1, 2012), the IP
situation in the European Union is about to change dramatically:
After having passed the EU parliament, recently also the European Council has accepted
two out of the three required Regulations for establishing a Unitary European Patent and a
Unified Litigation System within the EU. The Regulations on the Unitary European Patent
and the Regulations on its translation requirements are well on their way. It is now expected
that the Treatment on the Unified Patent Litigation System will also be accepted soon.
The first two Regulations will now have to be ratified by the member states of the EU.
According to experience, this will take some time. It is therefore unlikely that the earliest
possible validity date of January 01, 2014 may be kept. It is furthermore unclear, if the
ratification process of the third and last Regulation will be finished in time. Applicants
will have to wait (much?) longer, before they may file a European Patent Application with
unitary effect throughout the complete EU.
Beside this exiting development in European IP matters, none of the problems
addressed in the last article have been remedied. Although the Regulation on the Unitary
European Patent should not raise too much problems in practice, mainly because the
work is done by the well established and renowned European Patent Office, this will be
different for the Patent Litigation System.
There will be a court of appeal and a court of first instance. The court of appeal will
be situated in Luxembourg. The court of first instance will have a Central Panel, Regional
Panels and Local Panels. The Central Panel will be located in Paris, in Munich and in
London and each of these locations will deal only with a special technical field, e.g.
Munich will deal with mechanics. Regional Panels may be established for two or more
member states upon their request. A Local Panel will be established in every member
state. For every hundred infringement cases per year in the mean of the last three years
in a member state, another Local Panel will be established there. More than four Local
Panels in one member state are not admissible. In each Local Panel, there will be three
judges being nationals of two or three member states. The judges finally will be chosen
out of a multi-national pool of experienced judges. Only upon request of one of the
parties, each Panel may be enforced by a technically trained judge.
As can be seen from the brief description of the court system to come, there will be a
lot of procedural problems to be considered and explained to the users of this system.
As a summary: the Unitary European Patent will come alive soon, the quality of the
associated court system might be questionable and will have to be closely observed.
The world is turning.
VOL. 1 • 2013
Doing Business in the US – When does a
Foreign Based Business Cross the Line?
James G. Cosgrove, CPA, CVA, MST
Principal
Dworken, Hillman, LaMorte &
Sterczala, P.C.
Four Corporate Drive, Suite 488
Shelton, CT 06484
T+1 (203) 929 3535 x255
F+1 (203) 929 5470
[email protected]
www.dhls.com
18
For a company expanding its business by se lling into the United States for the first time,
the question arises as to when its activities cross the line and require it to start declaring
income to the US fisc. Assume the company is selling inventory products.
A classic initial entry is to sell its’ products directly to a US customer or through
an importer. In such cases, assuming the company sells fob shipping point, or “c.i.f.”
(cost, insurance, freight), the sale should be respected as not arising from a US trade or
business under the title passage rule and so escape the possibility of the income being
considered effectively connected income (“ECI”) under Internal Revenue Code (“IRC”)
Section (§) 864(c). However, in one case, A.P. Green Export Co. v. U.S., the shipping
terms were “c.i.f.”, although the parties agreed that “c.i.f.” notwithstanding, the seller
(A.P. Green) was responsible for the goods until they were delivered to the destination.
For inventory property, this distinction is important as under the IRC §861 regulations,
goods that are sold FOB destination, whether by terms or by agreement, are considered
US source income if sold by a foreign business.
For the subject business’ ECI to be taxed by the US, it has to be engaged in a trade
or business in the US [IRC §864(c)]. The difficulty lies in the fact that what constitutes
a US trade or business is not defined in the Code or Regulations, and the threshold
for having a trade or business in the US is lower than the definition of permanent
establishment (“PE”) found in bilateral tax treaties, which typically define a PE as a
fixed, permanent place of business in a specific location at which the entity carries on
activities other than those exempted.
A trade or business determination is factual, and the company’s interpretation might
differ from that of the IRS. Assume that one of the foreign company’s customers provides
its’ employees with rent-free space on a regular and continuous basis, and the employees
use that space for general activities, including making sales calls to potential prospects.
This might avoid classification as a PE under a tax treaty, but it likely might be considered
a trade or business under the tax code. As an aside, some countries have recently
adopted a “deemed permanent establishment” approach, e.g., Canada, so care must be
taken even when the business has no fixed place of business of its own.
Alternatively, assume the subject company uses an independent agent or
manufacturer’s representative to sell its’ goods in the US. Normally, such an arrangement
would be respected and the activities of the agent would not be attributed to the
foreign company and the title passage rule will be effective. If however, the agent is not
independent, and takes complete direction from the foreign business and is effectively
under the foreign business’ control, his activities will most likely be attributed to the
VOL. 1 • 2013
James G. Cosgrove, CPA, CVA, MST
Principal
Doing Business in the US – When does a Foreign Based Business Cross the Line?
Dworken, Hillman, LaMorte &
Sterczala, P.C.
Four Corporate Drive, Suite 488
Shelton, CT 06484
T+1 (203) 929 3535 x255
F+1 (203) 929 5470
[email protected]
www.dhls.com
foreign company. Another way to cross the line, and be considered to be doing business
under IRC §864(b).
Using an agent would seem to be straightforward, but even here there are
complexities. Revenue Ruling 70-424 held that a domestic corporation that was a general
commission agent for a foreign corporation was in effect a dependent agent, despite
the fact that the agent had no authority to conclude contracts and had no stock of
merchandise (should have ruled the opposite, e.g., independent). The ruling also found
that there was ECI under IRC §882 and so dragged the foreign corporation into the
US tax net. Under IRC §864(c)(4)(b) and Regs §1.864-7(d), an office or fixed place of
business of a dependent agent with the authority to conclude contracts and regularly
does so or regularly fills orders from a stock or merchandise, such activities will cause
the office of the dependent agent to be attributed to the foreign company.
Once the foreign business leases office space, then agent attribution is no longer
an issue, as this will likely create a trade or business under the Code or a permanent
establishment under most treaties. Under IRC §864(7), once a foreign business opens
a US office or fixed place of business, inventory sales into the US that would normally
be considered foreign source under the title passage rule, will now be “resourced” as US
source and included with sales otherwise classified as US source income.
Once the foreign business has crossed the line and has US source income, it now
must make a choice: report the income through a transparent (LLC) or a deferral entity
(corporation). This is a topic for another article.
19
VOL. 1 • 2013
Swerving from the cliff: American Taxpayer
Relief Act of 2012
Andreas Maywald
Client Service Executive
Deloitte Tax LLP
2 World Financial Center
New York, NY 10281
T+1 (212) 436 7487
F+1 (212) 655 6989
C+1 (347) 819 3278
[email protected]
www.deloitte.com
20
As the United States grazed the edge of the so-called “fiscal cliff,” Congress approved and
sent to President Obama legislation that among other provisions permanently extends the
reduced Bush-era income tax rates for lower- and middle-income taxpayers, and allows
the top rates on earned income, investment income, and estate and gifts to increase from
their 2012 levels for more affluent taxpayers.
The American Taxpayer Relief Act of 2012 became law on January 2, 2013, just one
day after it was approved in the House and Senate. It is the product of a compromise
forged between Senate Republicans and Vice President Joe Biden in the hours leading
up to the expiration of the Bush tax cuts at midnight on December 31, 2012. (Negotiators
were also working against the clock to avert a variety of spending cuts that were set to
take effect on January 1 or shortly thereafter.)
In addition to addressing the Bush tax cuts, the Act also provides a permanent “patch”
for the individual alternative minimum tax (AMT) and extends through 2013 dozens of
temporary business and individual tax “extenders” provisions. The Act also includes
provisions related to spending programs.
The new law does not extend the reduction in payroll taxes that was in effect in 2011
and 2012, nor does it reduce or delay new tax increases on earned and unearned income
that were enacted under the Patient Protection and Affordable Care Act of 2010 and that
took effect on January 1, 2013.
The major provisions of the American Taxpayer Relief Act of 2012 are the following:
• Permanent extension of most of the individual income tax relief provided in the
Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and the
Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) for unmarried
taxpayers with income of $400,000 or less and married taxpayers with income of
$450,000 or less;
• Permanent set of the top marginal tax rate at 39.6 percent (up from 35 percent in
2012) for unmarried taxpayers with income over $400,000 and married taxpayers
with income over $450,000;
• Permanent set of the top rate on income from capital gains and qualified dividends
at 20 percent (up from 15 percent in 2012) for unmarried taxpayers with income
over $400,000 and married taxpayers with income over $450,000;
• Increase of the individual AMT exemption to $50,600 for unmarried filers and
$78,750 for married filers for 2012, permanent indexation of those exemption
amounts for inflation beginning in 2013, and allowance of nonrefundable personal
credits against the AMT;
VOL. 1 • 2013
Andreas Maywald
Client Service Executive
Deloitte Tax LLP
2 World Financial Center
New York, NY 10281
T+1 (212) 436 7487
F+1 (212) 655 6989
C+1 (347) 819 3278
[email protected]
www.deloitte.com
Swerving from the cliff: American Taxpayer Relief Act of 2012
• Permanent reinstatement of the personal exemption phase-out (PEP) and limitation
on itemized deductions (Pease) for single taxpayers with adjusted gross income
(AGI) above $250,000 and joint filers with AGI over $300,000, with the thresholds
indexed annually for inflation;
• Permanent set of the top estate tax rate at 40 percent for estates worth more than
$5 million (indexed for inflation); and
• Extension through 2013 of an array of expired and expiring tax provisions such as
the research and experimentation credit, the subpart F active financing exception,
and the look-through rule for payments between related controlled foreign
corporations (CFCs).
The Act is notable in several respects. First, it ends – at least for now – a debate between
President Obama and congressional Republicans over the future of the Bush-era tax cuts
that had been simmering since those provisions were last extended in 2010. Second, the
inclusion of higher tax rates for upper-income taxpayers marks a significant concession
on the part of many Republicans in Congress who have maintained that any increases in
federal revenues should come primarily from economic growth generated by tax reform.
Third, it is likely to set the stage for a larger debate on deficit reduction and fundamental
tax reform that will continue to play out in 2013 and beyond.
While the fiscal cliff settlement resolves several of the most pressing tax and budget
issues, it leaves a few items on the table that will need to be addressed in the near term.
First, the settlement does not address the automatic spending cuts under the Budget
Control Act’s sequester; it only postpones the first round of cuts until March. Second, the
United States reached its statutory debt ceiling at the end of 2012, and Treasury is taking
what it calls “extraordinary measures” to keep from breaching the limit. Finally, federal
government operations are only funded at FY2012 levels through March 27, requiring
congressional action to prevent a government shutdown beginning March 28.
21
VOL. 1 • 2013
Determination of your tax liability status in the
United States
Kathrin Hacklander, Steuerberaterin
Manager, International Tax Services
German Desk
T+1 (646) 375 3832
[email protected]
Unlimited and limited tax liability status of individuals in the United States is based on the
residency status in the United States. An individual classified as a resident will be taxed on his
or her worldwide income and needs to file Individual Tax Return Form 1040. A so called nonresident alien will be taxed only on the U.S. source income and needs to file Form 1040NR.
To be unlimitedly liable for United States tax you need to qualify as United States tax
resident. i.e. a United States citizen or an alien individual who is a United States resident
under the Internal Revenue Code (IRC). Unlike German Tax Law, under United States tax
law you do not even need to have a domicile or habitual abode in the United States in
order to become a tax resident.
An individual is treated as a resident of the United States with respect to any calendar year
if the individual meets the requirements of any of three basic tests under IRC Sec 7701 (b):
• Green Card Test
• Substantial Presence Test
• First-year election
Green Card Test
An alien individual who is lawfully admitted for permanent residence into the United
States, i.e. obtains a green card, is considered a United States tax resident. The residency
start date generally is the date on which the individual receives the green card.
Karen Andersen, CPA, MST
Manager Tax
T+1 (856) 330 8139
[email protected]
ParenteBeard LLC
The Empire State Building
350 Fifth Avenue, 68th Floor
New York, NY 10118
T+1 (212) 736 1900
www.parentebeard.com
Substantial Presence Test
If an individual is a foreign citizen and is living or working in the United States on a Visa,
he or she might qualify as a resident under the substantial presence test, if the individual
was present in the United States for at least 31 days in the current year and at least
183 days including the current and two preceding years. The latter is calculated using a
weighted measure of the number of days spent in the United States in the current year
and two prior years and illustrated best with an example:
Peter, a German national, spent 160 days in 2012, 60 days in 2011 and 24 days in
2010 in the United States.
a) Current year – total number of days present in the United States:
(160 days x 1)
b) First preceding year – 1/3 of the days present in the United States:
(60 days x 1/3)
22
160 days
20 days
VOL. 1 • 2013
Kathrin Hacklander, Steuerberaterin
Manager, International Tax Services
German Desk
T+1 (646) 375 3832
[email protected]
Determination of your tax liability status in the United States
Karen Andersen, CPA, MST
Manager Tax
T+1 (856) 330 8139
[email protected]
In total Peter spent 184 days in the United States over the last three years according to
the substantial presence test. As the number of days exceeds 183 days, Peter qualifies
as a resident alien.
The two main exceptions for the residency classification under the substantial
presence test are the de minimis exception and the tax-home exception.
The de minimis exception applies if an individual is physically present in the United
States for 30 days or less in the current year. In this case he or she would be treated as
non-resident despite the fact that the substantial present test might be met.
Additionally the tax-home exception applies if an individual is physically present in the
United States for less than 183 days in the current year and proves he or she maintained
a closer connection to a foreign country, e.g. Germany, which is his or her tax home. A
closer connection to a foreign country exists, for example, if the location of the permanent
home is still in Germany and/or the spouse and children are still living in Germany. The
tax-home exception, however, does not apply for any year in which an individual has
applied for a green card or has taken any other steps to become a permanent resident.
ParenteBeard LLC
The Empire State Building
350 Fifth Avenue, 68th Floor
New York, NY 10118
T+1 (212) 736 1900
www.parentebeard.com
c) Second preceding year: 1/6 of the days present in the United States:
(24 days x 1/6)
4 days
First-Year Residency Election
The first-year residency election is kind of a special provision. Under certain
circumstances an individual may elect to be treated as a resident alien for the first year of
presence in the United States, even though the requirements of the green card test or the
substantial presence test have not been met. This election might be beneficial because
it allows the taxpayer, although taxed on his worldwide income, to claim greater itemized
deductions or to make an election to file a joint return with a spouse. Additionally, foreign
tax credits and foreign losses incurred during the residency period are allowed.
Treaty Protection
The United States and Germany have an Income Tax Treaty. An individual who is a resident
under the United States tax law as well as the German statutory tax rules may rely on the
residency article of the treaty and be classified as German resident under the so called tiebreaker rules. In this case, the individual would be treated as non-resident alien in the United
States and therefore would only be taxed on the U.S. source income in the United States.
ParenteBeard can help you determine your tax liability status and address your
tax liability questions. Please contact us to discuss the application of these rules to
your situation.
23
VOL. 1 • 2013
Folgen ausgewählter US-Steueränderungen auf
deutsches Investment in den USA
This article summarizes the impact of the recent U.S. tax rate changes (effective 1/1/13)
on German business and real estate investments in the U.S.
Als Ausfluss der Fiscal Cliff Debatte in den USA wurden durch den American Taxpayer
Relief Act of 2012 mit Wirkung ab 1.1.13 auch einschlägige Steuersätze geändert1.
Dr. Will Dendorfer, CPA, StB
Partner
Rödl & Partner
Rödl Langford de Kock LLP
Certified Public Accountants
747 Third Avenue, 4th Floor
New York, NY 10017
D+1 (212) 380 9220
[email protected]
www.roedl.com/us
Höhere Steuern nur für Höherverdienende
Im Wesentlichen gelten die bisherigen Einkommensteuersätze für solche Steuerpflichtige
weiter, die bestimmte Einkommensgrenzen (z.B. $ 450.000 bei Zusammenveranlagung
von Ehegatten) nicht überschreiten. Für darüber liegende Einkommensbereiche gilt
nunmehr ein erhöhter Spitzensteuersatz von 39,6% statt bisher 35%. Für langfristige
nichtgewerbliche Veräußerungsgewinne (Longterm Capital Gains) und bestimmte
Dividenden gilt ein besonderer Steuersatz, der auf 20% statt bisher auf 15% beschränkt ist.
Zusatzsteuer nicht anwendbar auf ausländische Investoren
Die ebenfalls ab 1.1.2013 geltende Zusatzsteuer von 3,8%2 auf den niedrigeren
Betrag aus Investmenteinkünften 3 oder allgemein Einkünften ab bestimmten
Einkommensgrenzen ist nicht auf ausländische Investoren anwendbar, gilt also nicht
für beschränkt Steuerpflichtige, d.h. z.B. nicht für in Deutschland steuerlich ansässige
Gesellschafter von US-Personengesellschaften oder Direkteigentümer von US-Immobilien.
Sie gilt ebenfalls nicht für in- oder ausländische Kapitalgesellschaften.
Keine Erhöhung der Körperschaftsteuersätze
Die Steuersätze der auf US-Kapitalgesellschaften und auf US-Betriebsstätten
ausländischer Kapitalgesellschaften anwendbaren Körperschaftsteuer wurden nicht
geändert, gelten also mit 15% bis 35% weiter.
Änderungen bei der Nachlass- und Schenkungsteuer
Hier wurde der Spitzensteuersatz von bisher 35% auf nunmehr 40% erhöht. Der
Freibetrag von $ 5.000.000 für unbeschränkt steuerpflichtige Nachlässe bzw.
Vgl. Dendor fer, USA: Steueränderungen durch den American Taxpayer Relief Act, in: IStR 3/2013,
Länderbericht, S. 14ff.
2
Medicare Contribution Tax, eingeführt durch den durch den Health Care and Education Reconciliation Act
des Jahres 2010.
3
U.a. nichtgewerbliche Zinsen, Dividenden, Veräußerungsgewinne und Mieten, nicht aber z.B. gewerbliche
Gewinne und Einkünfte aus selbständiger und nichtselbständiger Arbeit.
1
24
VOL. 1 • 2013
Dr. Will Dendorfer, CPA, StB
Partner
Folgen ausgewählter US-Steueränderungen auf deutsches Investment in den USA
Rödl & Partner
Rödl Langford de Kock LLP
Certified Public Accountants
747 Third Avenue, 4th Floor
New York, NY 10017
D+1 (212) 380 9220
[email protected]
www.roedl.com/us
Schenkungsvermögen (z.B. von US-Staatsbürgern) ist unverändert geblieben, wurde nur
inflatorisch angepasst (2013: $ 5.250.000). Bei beschränkt steuerpflichtigen Nachlässen
bzw. Schenkungsvermögen (z.B. von bestimmten ausländischen Investoren) ist der
Freibetrag wie bisher generell auf $ 60.000 beschränkt4.
Fazit für deutsches Investment in den USA
Sofern das US-Geschäft von einer US- oder deutschen Kapitalgesellschaft
betrieben wird, ergibt sich aufgrund der gleichbleibenden Körperschaftsteuersätze
steuerbelastungsmäßig keine Veränderung gegenüber 2012.
Wird dagegen das US-Geschäft von einer US- oder deutschen Personengesellschaft
betrieben kann aufgrund des erhöhten Spitzensteuersatzes von 39,6% eine
Steuermehrbelastung resultieren, falls bei den Gesellschaftern (natürliche Personen) die
o.g. Einkommensschwellenbeträge, bezogen auf ihre US-Quelleneinkünfte, überschritten
sind. In diesen Fällen (sowie bei Direktinvestitionen von Privatpersonen) kann im
Immobilienbereich eine Mehrbelastung bei langfristigen Veräußerungsgewinnen wegen
des erhöhten Steuersatzes auf Longterm Capital Gains (20%) eintreten. Hier kann sich
auch eine höhere Nachlasssteuerbelastung ergeben.
Aufgrund der relativen Mehrbelastung bei Personengesellschaften (bzw. allgemein
bei einer sog. steuerlich transparenten US-Investmentstruktur) empfiehlt sich bei
Familienunternehmen im verstärkten Maße die Steuergestaltung mit Hilfe von
steuerlich hybriden Rechtsformen – z.B. einer Limited Partnership, deren Anteile von
einer deutschen GmbH & Co KG gehalten werden, die für US-steuerliche Zwecke
intransparent ist. Dies gilt auch für das US-Immobilieninvestment vermögender
Privatpersonen, nicht aber unbedingt auch für das US-Investment mittels geschlossener
Fonds mit Massenanlegern.
Für in die USA entsandte und dort steuerlich ansässige Mitarbeiter resultiert generell
eine Einkommensteuermehrbelastung, wenn sie (auch) Investmenteinkünfte beziehen
bzw. die o.g. Einkommensschwellenbeträge überschreiten.
4
25
Er ergibt sich durch Umrechnung des Steueranrechnungsbetrags (Unified Credit) von $ 13.000. Der
Freibetrag kann sich je nach welt weiter Vermögenslage des Erblassers sowie bei Vererbung an den
Ehegat ten erhöhen.
VOL. 1 • 2013
A Primer on Sales and Use Tax
Monica Ranniger, CPA, MBA
Tax Partner
Head of German Desk
T+1 (212) 375 6570
[email protected]
Christopher Meier
Steuerberater
T+1 (646) 225 5942
C+1 (347) 223 7109
[email protected]
WeiserMazars LLP
Audit, Tax and Advisory
135 West 50th Street
New York, NY 10020
T+1 (212) 812 7000
F+1 (212) 375 6888
www.weisermazars.com
26
Many foreign companies looking to begin or already doing business in the US are
faced with complex tax laws that are state dependent. One of the most confusing
ones is the United States equivalent to the VAT tax: The sales and use tax.
Sales and use tax is a destination based tax which is imposed and administered
at the state and local level, but not at the federal level (except for certain excise tax).
Forty-five states, the District of Columbia, and many local jurisdictions within some
of the 45 states impose a retail sales tax, a single-stage tax that applies to sales to
final consumers. A retail sales tax, as opposed to the European VAT tax, is levied on
all final or retail sales of goods and services, except those that are exempt from tax.
Thus, the input VAT concept is not present in the US system. The tax rates typically
range from as low as five to almost nine percent of the retail selling price. The seller
collects the sales tax from consumers at the point of sale and remits the tax to the
respective jurisdiction at various intervals set forth by each respective jurisdiction.
When a customer purchases an item, the sales tax, a percentage of the price, prints
directly on the receipt.
The sales and use tax rules vary state by state. More than one half of the states,
for example, exempt food consumed at home. Generally, services are not taxed,
except in a few states, partly to achieve social objectives and partly for administrative
reasons. Many, but not all, sales to business firms are exempt, which is necessary
to prevent raw material used in production from being taxed more than once as it
moves through the production-distribution process. However, in order to allow the
seller not to collect sales tax from a business customer, the customer must provide
an exemption certificate for each state to the seller.
A business is responsible for collecting the sales tax on its sales in a particular
state to the extent that the business has a physical presence (“nexus”) within that
jurisdiction and then must remit such collections to the state. If the purchaser does
not pay sales tax, then it may have an obligation to pay use tax (at the same rate)
in that state. Of course, the determination of taxability is dependent on not only
in which state(s) the business is selling its products or services, but also on the
whether the customer is an exempt business customer.
Businesses are required to remit sales tax (or self-assess and remit a use tax) by
filing separate tax returns at the end of each month or quarter (or even annually).
These returns can be audited by state authorities, generally within a three year
period, but if a return is not filed, there may be no time limit for auditing and
collecting past due taxes. It should be noted that even if no tax is due or collected,
many states will require the filing of a zero return. Certain states, as part of an
VOL. 1 • 2013
Monica Ranniger, CPA, MBA
Tax Partner
Head of German Desk
T+1 (212) 375 6570
[email protected]
Christopher Meier
Steuerberater
[email protected]
T+1 (646) 225 5942
C+1 (347) 223 7109
WeiserMazars LLP
Audit, Tax and Advisory
135 West 50th Street
New York, NY 10020
T+1 (212) 812 7000
F+1 (212) 375 6888
www.weisermazars.com
A Primer on Sales and Use Tax
increased effort to streamline the sales and use tax laws, have joined together
to create a Streamlined Sales and Use Tax Agreement to substantially reduce the
burden of tax compliance to businesses.
Recent legislation by many states has started to require internet retailers, such as
Amazon, to start charging sales tax for shipments sent into particular states. Amazon
had avoided creating nexus within the various states and local jurisdictions, in part
to avoid sales tax collection and remitting responsibilities. The online retailer had
created its affiliate and click-through program as a way to grow revenue. The states,
in looking to increase tax revenue on internet sales, perceived the affiliates program
as a way to require Amazon to collect sales taxes, by asserting that the affiliates
residing in their states were representatives of Amazon. Thus, Amazon would have
a physical presence in their states (and thus have nexus) and could be required to
collect sales taxes on purchases shipped to those states.
Collecting and remitting sales tax can be a cumbersome task, especially in the
early stages of business operations. Company officers need to remain vigilant, as
non-remittance could result in personal liability by the officers.
The authors may be contacted at [email protected] or christopher.
[email protected].
IRS CIRCULAR 230 DISCLOSURE: TO ENSURE COMPLIANCE WITH REQUIREMENTS IMPOSED BY THE IRS, ANY U.S. FEDERAL TAX ADVICE
CONTAINED IN THIS COMMUNICATION (INCLUDING ANY ATTACHMENTS) IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE
USED, FOR THE PURPOSE OF (I) AVOIDING PENALTIES UNDER THE INTERNAL REVENUE CODE OR (II) PROMOTING, MARKETING, OR
RECOMMENDING TO ANOTHER PARTY ANY TRANSACTION OR MATTER ADDRESSED HEREIN
27
VOL. 1 • 2013
Late Filing Can Be Costly Beyond Late Filing
and Payment Penalties
Gabriele Soll, Dipl.-Kff., Dip-IFR, CPA
AugustinPartners LLC
300 East 42nd Street, 14th Floor
New York, NY 10017
T+1 (212) 593 9900
F+1 (212) 593 9997
www.augustinpartners.com
28
Many individual taxpayers are aware that penalties and interest may be assessed if U.S.
returns are filed late and there are net taxes due to the government. Absent a showing of
reasonable cause, the penalties can be substantial and interest is rarely, if ever, abated.
Many are not as aware of other negative consequences of late filing or failure to file that
can be even more costly than the interest and penalties assessed.
For example, nonresidents who file a U.S. return more than 16 months late can
be denied deductions or credits that would otherwise be allowed. If the IRS has sent a
notice to the taxpayer asking about the delinquent tax return before the taxpayer files
it, deductions can be lost even if the return is filed prior to the 16 months period. This
can be extremely costly for nonresidents who are engaged in business in the U.S. since
included in the lost deductions could be large amounts such as depreciation that would
be lost forever. In fact, even if a nonresident is a limited partner in a partnership, the
income reported in the K-1 can be readjusted by the Internal Revenue to reflect gross,
rather than net, income.
Nonresidents who have rental property in the U.S. also have to be aware of timely
filing. The general rule as stated in Section 871 of the Internal Revenue Code is
that unless an election is made in a timely filed return to treat the rental property as
“effectively connected income”, the taxpayer will be taxed on thirty percent of the gross
rental income or gains generated by the real property. The code section gives the Treasury
the task of defining what “timely filing” means and in Regulation Section 1.871-10 the
Treasury mandates that the period prescribed by Section 6511(a) of the Internal Revenue
Code governs in this section. Therefore, similar to the preceding paragraph, the period
considered timely is usually sixteen months from the original due date of the return.
Corporate filing is outside the scope of this article; however, it is important to note
that foreign corporations are also in jeopardy of losing important deductions and credits if
they do not timely file their returns. The period considered timely for foreign corporations,
however, is 18 months.
In addition to nonresidents, U.S. citizens or residents who are working outside of
the U.S. can encounter problems related to late filing of returns. One example of this
is the election to exclude foreign earned income or housing. If a taxpayer does not file
a timely return, the ability to elect the exclusions may be lost. However, if after taking
the exclusions the taxpayer does not owe taxes, the election will be allowed as long as
a disclosure is made on the return. Even if the taxpayer does owe taxes, the IRS can be
petitioned to allow the late election; however, most taxpayers would want to avoid this
and should make every attempt to timely elect.
VOL. 1 • 2013
Gabriele Soll, Dipl.-Kff., Dip-IFR, CPA
AugustinPartners LLC
300 East 42nd Street, 14th Floor
New York, NY 10017
T+1 (212) 593 9900
F+1 (212) 593 9997
www.augustinpartners.com
29
Late Filing Can Be Costly Beyond Late Filing and Payment Penalties
Given the potential high cost of filing late, nonresident taxpayers, as well as U.S.
residents and citizens working overseas, should be vigilant of the time constraints for
filing their returns. While there are procedures in place to argue reasonable cause, these
arguments are not guaranteed to be successful and professional help to assist with the
argument can be costly as well.
VOL. 1 • 2013
Recast of EU Regulation on Cosmetics:
Far-Reaching Changes for Manufacturers and
Vendors of Cosmetics in the European Union
as of July 2013
Martin A. Ahlhaus,
Dipl.-Verw.wirt (FH)
Rechtsanwalt
[email protected]
Noerr LLP
Brienner Straße 28
80333 Munich, Germany
T +49 (89) 28 62 82 84
F +49 (89) 28 01 10
www.noerr.com
Evelyn Schulz
Rechtsanwältin
[email protected]
Noerr LLP
Paul-Schwarze-Straße 2
01097 Dresden, Germany
T +49 (351) 8 16 60 41
F +49 (351) 8 16 60 81
www.noerr.com
30
Regulation (EC) No. 1223/2009 on cosmetic products entered into force in early 2010
and has now been recast, creating new obligations for manufacturers and vendors of
cosmetics in the European Union (EU) as of 11 July 2013. The labeling requirements
have also changed. The provisions of the German Act on Foodstuffs and Commodities
(LFGB) and of the German Regulation on Cosmetic Products (KosmetikVO) will for
the most part become obsolete when the revised EU Regulation takes effect. Some
particularly profound changes are outlined below.
New: Responsible Person
In future cosmetic products may only be put on the market in the European Union
if a legal or natural person is appointed as the “responsible person” to this end. The
responsible person is as a matter of principle the manufacturer of the cosmetic product,
i.e. the person who manufactures, develops or causes the manufacturing of a cosmetic
product and who places such product on the market under its own name or trademark.
A vendor will become the responsible person if it places a cosmetic product on the market
under its own name or trademark or if it modifies a product already on the market in a
manner which casts doubt on its compliance with the legal requirements. In view of the
international dimensions of commerce especially, it is reassuring for vendors to know that
the mere translation of information relating to a cosmetic product is not considered such a
modification. However, a translation does trigger an obligation to notify the Commission.
The enterprises affected are at liberty to appoint the responsible person. In particular, the
role of responsible person may be assigned by written agreement to a person established
within the Community. This means that responsibilities may be assigned fairly within
the supply chain, e.g. between production and commerce, and the relevant operative
obligations within groups of companies can be aggregated.
New: Notification via Central EU Portal
The notification of cosmetic products via the central EU Cosmetic Products Notification
Portal (CPNP) will in future replace the notification procedure under national provisions
(in Germany: § 5d of the Regulation on Cosmetic Products). The portal is already
accessible but will not become mandatory until 11 July 2013. Notification obligations
predominantly concern the responsible person, but in particular cases also vendors of
cosmetic products.
VOL. 1 • 2013
Martin A. Ahlhaus,
Dipl.-Verw.wirt (FH)
Rechtsanwalt
[email protected]
Recast of EU Regulation on Cosmetics: Far-Reaching Changes for
Manufacturers and Vendors of Cosmetics in the European Union as of
July 2013
Noerr LLP
Brienner Straße 28
80333 Munich, Germany
T +49 (89) 28 62 82 84
F +49 (89) 28 01 10
www.noerr.com
New: Labeling
Evelyn Schulz
Rechtsanwältin
[email protected]
Noerr LLP
Paul-Schwarze-Straße 2
01097 Dresden, Germany
T +49 (351) 8 16 60 41
F +49 (351) 8 16 60 81
www.noerr.com
In future the label on cosmetic products has to include the name or company name and
address of the responsible person. Where several addresses are provided on the cosmetic
product or its packaging, the address of the responsible person where the product
information file is easily accessible has to be highlighted. The product information file will
in future be the main instrument for describing the cosmetic product, for documenting its
origin as well as evaluating aspects relevant to product safety.
Further changes concern, in particular, the list of ingredients (mandatory heading in
future: “Ingredients”), the labeling of nano-materials and specification of the country of
origin where imported cosmetics are concerned.
New: Information for the General Public
The responsible person will play a particular role in future where information for the
general public is concerned. According to the new Regulation on cosmetic products, the
responsible person has to ensure that information about the qualitative and quantitative
composition of the cosmetic product, details on perfume and aroma substances, the
identity of the supplier as well as existing data on undesirable effects of the product is
made easily accessible to the public by any appropriate means. This means that the
general public can obtain such information from the label.
Especially when assigning the role of the responsible person, therefore, it is important
to ensure that the designated enterprise not only has all relevant information, but also
displays the necessary sensitivity in its activities on the market. This applies all the more
so as under the recast EU Regulation on cosmetic products the responsible person also
has to monitor the market and take measures to avert risks, including product recalls.
Questions? Ask us!
Noerr LLP has extensive knowledge and expertise in advising cosmetic companies in the
European Union. Should you wish to receive more information on this subject or discuss
anything of the above mentioned topics, please do not hesitate to contact the authors via
e-mail or at the telephone numbers provided.
31
DISCLAIMER: The content in this newsletter is provided
by the German American Chamber of Commerce, Inc. and
its third party content providers for general informational
purposes only. It is not intended as professional counsel and
should not be used as such. You should contact an attorney
to obtain advice with respect to your specific circumstances.
The German American Chamber of Commerce, Inc. shall not be
liable for any errors, inaccuracies in content, or for any actions
taken in reliance thereon.
German American Chamber of Commerce, Inc.
Susanne Gellert, LL.M.
Rechtsanwältin | Attorney at Law
Head of Legal Department
75 Broad Street, 21st Floor | New York, NY 10004
T+1 (212) 974-8846 | F +1 (212) 974-8867
[email protected]
www.gaccny.com