Liability of foreign company to pay US tax?
I have a question about whether or not my foreign company is required to file tax in the US.
I am a US citizen but live abroad. I file my personal US income tax statment each year. My husband and I own (i.e., are the only shareholders) in a small foreign company. The only connections the company has with the US is that the company has a bank account in the US and it does business on eBay. (We trade on eBay through the company).
All of my buyers' checks are made out to the company and deposited in the company's US bank account. Every month I transfer the money from the company account to my personal account or the company's account overseas in my place of residence abroad.
The company files a local (i.e., foreign) tax return and is audited every year, but I have never filed a return for it in the US since the company doesn't really do any business in the US. All of the company's work (sourcing products, purchasing, hiring employees to run auctions, etc) is done outside the US. Only payment is collected in the US.
So..... should I be filing a return for this company in the US? The bank account is in Minnesota, btw. Thanks in advance
<edit to clarify>
Edited by: jvd hk at: 3/4/02 9:25:47 am
Since you are a foreign company and I am assuming, that you registered with Ebay in that country, you are not liable for filing a federal return in the U.S. This might sound like a dumb question but in what state is Ebay headquartered? I would check the laws of that state because you might have to file a state income tax return there.
The laws on internet commerce are very vague right now but are due to change. It has been mentioned in several tax columns lately and the US Federal Government is not about to let go of a lot of tax dollars for too long. Sooner or later you may have to file and pay so I would keep abreast of the tax changes here within the next year.
Re: Liability of foreign company to pay US tax?
You're welcome. Hope it works out for you because Ca. is one of the highest tax states in the country. They tax everything.
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