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

[Alex Balashov]

BTW, it sounds from what you're saying like the most reasonable thing 
might be for my employee to incorporate in Britain (not that this is 
necessarily trivial, cheap, or even possible, but work with me here) and 
for me to pay him as a vendor company rather than as a 1099er or a W-2er.

Trixter aka Bret McDanel wrote:

> 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 :)
> 
> 
> 
> 
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-- 
Alex Balashov
Evariste Systems
Web    : http://www.evaristesys.com/
Tel    : (+1) (678) 954-0670
Direct : (+1) (678) 954-0671
Mobile : (+1) (678) 237-1775