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EDC with Uncle Sam

Aug 18, 2007
For those of you who really desire the straight legal weedy, here are the details. This isn't the entire Internal Revenue Service document, 2006 bulletin number 38, but it's enough to clarify what the USVI Economic Development Council (EDC) program is all about.If you've heard about the great savings in the United States Virgin Islands for your business, what you've heard is probably true. If you qualify, you can save 100 percent on some taxes such as excise taxes, and 90 percent on the business income tax you would normally pay to Uncle Sam if you were stuck year after year away from this gorgeous island paradise.

Whenever necessity to a business executives, sympathising of the EDC application process, the entire IRS bulletin can be downloaded from the government Web site.

An acknowledge states how businesses must prove that the business income is derived from the USVI territory, in order to realize the corporate benefits and save the income taxes allowed in the EDC program.This IRS EDC bulletin, to help Virgin Islands businesses save taxes, was issued on September 18, 2006. Notice 76 of this bulletin is found on page 459. It gives clear examples that show how to fill out the application for the EDC program, and confirms the details of the program and the regulations to which you must adhere to qualify.

Procedure 37, on page 499 of the IRS document states how the business taxpayer, in qualifying for the USVI EDC program, can prove its income qualified for time period and location.

Employee plans for the corporate USVI Economic Development Council corporate benefit programs are spelled out in part 9280 of the IRS bulletin, on page 450. Here is spelled out the section 411 final regulations for the qualification and compliance with the anti-cutback rules.Here you will also find the criteria that determine reasonable fees for the costs that could be associated with creating the studies, research and /or compilations as needed.

Announcement 2006-67, found on page 509 of the IRS bulletin explains any corrections to any temporary EDC IRS regulations, if they are related to a firm's application to save taxes and other corporate benefits through foreign tax credit limitations and the payment of dividends.

The administrative regulations of the IRS EDC program for United States Virgin Island firms are detailed in the bulletin's page 460, its Review of Procedures 2006-34. Here you will find specifications for the corporate filing of Form 1042-S. This is known as the Foreign Person's Income Subject to Withholding form for U.S. Source Income. It can be submitted either magnetically or electronically. This new regulation supersedes Publication 1187 on the same subject. In this administrative material you will find the EDC guidelines set forth by the IRS for other agencies of the government or residents so that they can request that special statistical research and studies or compilations be completed necessary for a firm's EDC application.
About the Author
Garland Choate (GR) is a retired Airline Captain who now publishes articles from the USVI. Find many great articles about Caribbean Living and great luxury homes in paradise at http://www.StThomasLuxuryHomes.com
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