Industry Focus: SaaS
Expert CPA’s with deep industry knowledge
of accounting for SaaS companies.
Our expertise with SaaS accounting enables us to help you implement best practices for your SaaS company as you grow and scale.
Our expertise in the SaaS industry enables us to help you implement best practices for your SaaS accounting as you grow and scale.
B2B SaaS & B2C SaaS Accounting Services
We’ve worked with both early stage and growth SaaS startups who sell B2C and B2B to streamline their accounting & finance department.
Helpful Resources, Tips & Useful Information
Commonly Asked SaaS Accounting Questions
In today’s dynamic business environment it is becoming increasingly common for U.S companies to have operations overseas in pursuit of talent, business strategy, and/or tax savings purposes. However, it is a common misconception that many U.S taxpayers (individuals and corporations) have that the U.S tax law is limited to imposing taxes and reporting obligations on revenue streams within its shores. One of the least commonly known nuances about foreign operations reporting is the concept of controlled foreign corporations (CFC) regulations that mandate detailed reporting of any foreign entity that is 50% or more owned by the U.S taxpayer. In this context, the taxpayer refers to any individual, corporation, partnership, trust, or any entity that is a U.S tax resident. These reporting regulations dictate that the offshore corporation may be taxed under certain situations – Subpart F income for example. To the company, the IRS mandates the U.S taxpayer to file form 5471 to report the activities of the foreign corporation.
IRC Section 6038(a) requires information reporting with respect to certain foreign corporations (Form 5471) and describes the information required to be reported on this form. IRC Section 6038(b)(1) provides for a monetary penalty of $10,000 for each Form 5471 that is filed after the due date of the income tax return (including extensions) or does not include the complete and accurate information described in Section 6038(a).
On the other hand, if there are foreign shareholders of a U.S entity then the U.S entity is mandated to file form 5472 if there are any (related party) reportable transactions. The penalty for non-filing or late filing form 5472 is $25,000.
Nevertheless, besides form 5471 and 5472 there are other numerous information returns related to foreign holdings and activities that carry hefty penalties, even owning disregarded entities offshore is cumbersome as it comes with form 8858 filing obligation. Please schedule a consultation with us if you have any questions.