Grand Prairie Cross-Border Tax

A City With Global Ties

Grand Prairie's families come from Mexico, Central America, Vietnam, Korea, China, India and Africa, and some of its plants belong to European groups. That creates cross-border questions for individuals and companies. BOMCAS handles them remotely.

The Texas cross-border tax page covers treaty and Canada–U.S. basics. This page is about Grand Prairie's international families and companies.

New Residents

People who move to Grand Prairie become U.S. tax residents through a green card or the substantial presence test, and from then on report worldwide income. In the year of arrival they may be dual-status, and some can elect to be treated as residents for the whole year to file jointly.

Families From Mexico

Families who own houses or land in Mexico report rent and gains on their U.S. return, with a foreign tax credit for Mexican tax under the treaty. Bank accounts in Mexico count toward the FBAR threshold. Money sent to relatives is not taxable or deductible.

Families From Vietnam

Because the U.S.–Vietnam tax treaty signed in 2015 has never taken effect, residents with income from Vietnam rely on foreign tax credits rather than treaty rates. Land sold in Vietnam is reported with its U.S. dollar basis, using the exchange rate when it was acquired.

Families From Korea

The United States has an income tax treaty and a social security agreement with Korea. Korean workers on temporary assignment may remain in the Korean pension system and be exempt from U.S. Social Security with a certificate of coverage. Korean bank and investment accounts are reported, and Korean funds may be passive foreign investment companies.

Accounts and Gifts

FBARs are due for foreign accounts totalling more than $10,000 at any time in the year, and Form 8938 at higher thresholds. Gifts or inheritances of more than $100,000 from foreign individuals are reported on Form 3520, although they are not taxed.

European-Owned Plants and Foreign Suppliers

U.S. subsidiaries of foreign groups, such as the Airbus Helicopters operation in Grand Prairie, file Form 5472 for transactions with related parties and must set transfer prices at arm's length. Foreign-owned single-member LLCs file Form 5472 with a pro forma Form 1120. Each missing form carries a $25,000 penalty. Payments to foreign suppliers for services performed abroad are generally not subject to U.S. withholding, but royalties and some other payments can be.

Canadians

Canadians working in Grand Prairie's plants under TN or L-1 status become U.S. residents and may have final Canadian filings. RRSPs remain tax deferred under the treaty; TFSAs do not.

Paying Overseas Designers and Consultants

A small supplier buying engineering work overseas should document who performed it and where. A foreign contractor's invoice alone does not establish the tax result. We collect the appropriate W-8 documentation, distinguish services from software rights or royalties and check whether Form 1042-S reporting or withholding applies before the payment leaves the company.

ITINs

Spouses and dependants without Social Security numbers apply for ITINs with the return, with original or certified documents. ITINs expire if not used on a return for three years.

Common Filings

Form 1040 with foreign income.
FBAR and Form 8938.
Form 3520.
Form 1116.
Form 5472.
Form W-7.