Do I need to pay taxes in USA as european company
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Yes, it is taxable in the US.
There are two terms:
You can find the relevant law here:
https://www.law.cornell.edu/cfr/text/26/1.871-8
In short, if︂ you are engaged in a trade or business in the United States (ETBUS), you need︃ to pay tax on any income effectively connected (ECI) to that trade or business. Hence,︄ ECI only makes sense in combination with an ETBUS.
You only have to file if you have to pay taxes. You can always file︇ a protective 1120-F to protect deductions should the IRS ever question your tax liability. You︈ can file the protective 1120-F up to 18 months after the regular due date and︉ it is still considered timely filed. I would do it.
This is regarding a sales tax nexus.︍ There are different nexus rules for sales tax and for corporate/franchise taxes. There is no︎ real way around the sales tax nexus if it is based on turnover. If you️ are doing Amazon and website sales, you may want to use two different companies for Amazon and non-Amazon. For Amazon sales, Amazon already pays sales tax on all sales, for website sales, you only need to pay sales tax once you reach a threshold. Now, there are certain states which include the Amazon turnover in the threshold. Hence you can probably go around it for way longer if you serve your website customers through another company,
Yes, you are ETBUS with ECI.
There are two terms:
- ETBUS/USTB both meaning "engaged in a trade or business in the United States"
- ECI means "effectively connected income"
You can find the relevant law here:
https://www.law.cornell.edu/cfr/text/26/1.871-8
In short, if︂ you are engaged in a trade or business in the United States (ETBUS), you need︃ to pay tax on any income effectively connected (ECI) to that trade or business. Hence,︄ ECI only makes sense in combination with an ETBUS.
You only have to file if you have to pay taxes. You can always file︇ a protective 1120-F to protect deductions should the IRS ever question your tax liability. You︈ can file the protective 1120-F up to 18 months after the regular due date and︉ it is still considered timely filed. I would do it.
This is regarding a sales tax nexus.︍ There are different nexus rules for sales tax and for corporate/franchise taxes. There is no︎ real way around the sales tax nexus if it is based on turnover. If you️ are doing Amazon and website sales, you may want to use two different companies for Amazon and non-Amazon. For Amazon sales, Amazon already pays sales tax on all sales, for website sales, you only need to pay sales tax once you reach a threshold. Now, there are certain states which include the Amazon turnover in the threshold. Hence you can probably go around it for way longer if you serve your website customers through another company,
Yes, you are ETBUS with ECI.
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