[asterisk-biz] OT: Paying people in faraway (Western) places.

[Trixter aka Bret McDanel]

On Wed, 2009-01-07 at 18:41 -0500, Alex Balashov wrote:
> For those of you based in the US, how do you pay employees outside the
> country?  And, I do mean employees, not contractors, staffing firms,
> body shops, consultants, or any of the stuff that comes with offshoring.
> 

carefully :)   if you are a US corp and pay someone, no matter where
they are located, there are IRS tax rules, rules they keep changing all
the time.  If you pay a company that is outside the US then its much
more clean and generally helps to prevent the IRS from getting involved
and taxing that person.

In addition some states in the US are making a claim to state income tax
for telecommuting workers.  Now this would only come up if the company
is based in that state (NY is one who was going after people), but it
could expose that non-US worker to not just federal but also state
taxes.  This applies to contractors (1099) as well as employees (W2)

If they are your employee and not just a contractor overseas, you may be
deemed to be operating a business with an office in that jurisdiction
which can make you liable not only for the wage taxes but potentially
for revenue taxes on a business level in that country (it varies).  

Governments see taxation as free money all too often, as such they look
for every way they can do naughty things to people, such as taking their
money.  

If you have a large enough base, you can legally (generally) avoid taxes
(consult a tax advisor!) by forming a corporation somewhere and running
all non-US stuff through there (sales, service, etc) which halts the US
from taxing globally as they love to do with companies that are US
based.  It also lets you pay non-US people out of there which can
greatly remove some of the rules for it all.  


This multijurisdictional stuff is not that uncommon, cocacola, gucci,
microsoft, tyco and many others do it.  Almost any large company that
has a US base of operations has done it because of the tax rules that
are insane.  Microsoft also uses a non-US holding company that owns
their trademarks, copyrights, etc, and the US company pays license fees
to this company - in essence they move money away from the tax man.  But
dont do like gucci did who formed a "consulting" company they paid for
over a decade for creative ideas, and nothing was ever done until irs
audit time then it was 2 designs that got rejected, course one of the
gucci heirs was told they would be written out of the will and they
tipped off the irs as a result :)


-- 
Trixter http://www.0xdecafbad.com     Bret McDanel
pgp key: http://pgp.mit.edu:11371/pks/lookup?op=get&search=0x8AE5C721

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