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

[Nitzan Kon]

--- On Wed, 1/7/09, Trixter aka Bret McDanel <trixter at 0xdecafbad.com> wrote:

> 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.

Be VERY careful going this route:

1. While YOU think the US should not be taxing such a company,
The IRS may disagree.

2. If you own directly or indirectly more than 50% of the
company it is considered a CFC (Controlled Foreign Corporation)
which will make it be treated as a regular US company for tax
purposes - actually worse because it will guarantee more
scrutiny and reporting requirements.

3. YOU don't avoid taxes. The COMPANY does. When you take out
money from the company you are still required to pay personal
income tax on it.

4. Offshore companies are viewed pretty negatively which
may or may not get you in trouble with potential vendors
and customers. The "bill for trademarks" model might work
but in all likelihood the IRS will go after you.

5. If the majority of your income is from the US, the IRS
is likely to try and go after a foreign company too for
taxes. Just calling it "Hong Kong" won't work if 90% of
your customers are in Atlanta, for example. You have to
have a legitimate business reason if this ever comes up
in court, and the business has to have multiple owners
preferably not US citizens or residents.

Anyway, this is just what I've researched about the
subject. I've been considering it for asset protection
more than tax purposes, but will most definitely not do
it without consulting a lawyer first.

--
Nitzan Kon
http://www.future-nine.com/
http://www.comparevoipproviderrates.com/