Case Study: A Successful Internal Reorganization for an International Distributor

About the Client:

Aprio engaged with an international distributor of consumer merchandise that embarked on an
internal reorganization and required international tax expertise.

The Challenge:

The client needed help with navigating the US federal income tax consequences and
complexities of its internal reorganization, which included the outbound transfer of its valuable
intellectual property (IP).

The Solution:

Aprio’s International Tax team stepped up to the plate and thoroughly analyzed every
component of the client’s internal reorganization. The reorganization affected several of the
client’s foreign affiliates, so the Aprio team provided highly technical US federal income tax
advice, including qualification as non-recognition transactions and the application of IRC
Section 367 on outbound IP transfers.

Upon review, Aprio noted that the transfer of the client’s IP (while subject to US federal income
tax) could benefit from a reduced effective tax rate, due to the application of the foreign
derived intangible income (FDII) deduction.

Thanks to Aprio’s comprehensive tax review and analysis, the client saved nearly $500,000 in
US federal income tax.

The Result:

This case study illustrates how Aprio’s deep technical knowledge and expertise can help clients
reap significant tax savings. Our International Tax team helps companies safeguard both their
valuable IP and their bottom line, implementing compliant international tax strategies that
allow them to minimize risk and tax dollars paid.

If you are interested in seeking technical tax advice from Aprio’s International Tax team,
contact us today.

Jed Rogers
International Tax, Partner
jed.rogers@aprio.com
770.353.3184