Introduced by Donald Trump, the Apple tax, named after the computer firm, is aimed at bringing corporate offshore cash piles into the scope of the Inland Revenue Service.
In the wake of the tax Apple has since pledged to bring its huge cash reserves on shore.
However, the corporate tax has also captured a number of expat individuals who either own stakes in foreign businesses or pay themselves through a company for tax purposes.
Brussels-based adviser Brian Dunhill has warned his clients, who often work as consultants and have set up limited liability companies in order to be tax efficient, to take advice on restructuring their affairs to avoid being caught in the Apple tax.
On Tuesday International Adviser published further details on the tax which compels business owners to pay tax on their non-US business interests in April.
Hong Kong-based Stephenson Harwood private client tax adviser Erik Wallace told International Adviser: “I have several American clients who live overseas and have small family businesses outside the United States. They are being hit with this repatriation tax.
“I met with one client yesterday who does not have the liquidity to pay the tax and questioned whether he should consider bankruptcy,” he said.
In Asia the tax is thought to take in a higher proportion of ‘Accidental Americans’. US citizens who are considered tax payers because family connections or visiting the US to receive higher education.
Under the Foreign Account Tax Compliance Act all US citizens must file a tax return to the IRS even though they may have no taxable US income or continue to live in the US.
Under Apple tax foreign company money is taxable and must file details in a section 965.
