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Old 10-07-2015, 09:08 AM
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Tax liability when selling on Amazon as a foreign owned US LLC

I am trying to determine US tax liability based on USTB/PE for selling via Amazon Fulfillment by Amazon (FBA) with a foreign corporation or foreign-owned US LLC pass-thru entity.

With Amazon's FBA program, the foreign corporation (FC) can sell on the Amazon.com platform in the US. The inventory is stored in Amazon's warehouses in the US and the FC owns the inventory up until Amazon facilitates the sale between the FC and US customer.

The FC has no physical presence in the US. It just sends its inventory from China to Amazon's warehouses and then sells it via their platform.

Based on this do you think I am or am not a US Trade or Business (USTB)?

If I am a USTB then I have to look to PE and country specific tax treaties which I think in general would exempt me from tax but I would still have to file.

If I can say I am not a USTB then I don't have to file at all.

Also I am hoping that if I say I am not USTB then I could also create a US LLC pass-through entity owned my the FC that could accept payments from Amazon.com and pay for various SAAS tools with a USD credit card in the LLC's name.

Any thoughts?



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Old 10-07-2015, 10:20 AM
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I am trying to determine US tax liability based on USTB/PE for selling via Amazon Fulfillment by Amazon (FBA) with a foreign corporation or foreign-owned US LLC pass-thru entity.==it depedns.UINLESS your LLC is a partnership or is treated as a S corp, your LLC ‘d be treated as a disregarded entity I mean SMLLC . An individual owner of a SMLLC that operates a trade or business is subject to the tax on net earnings from self employment in the same manner as a sole proprietorship in US. If your LLC is a MMLLC , a partnership,set up in an US state then your LLC has to file annual taxes to the US government UNLESS the LLC has NO taxable income. All US companies do, regardless of where their owners live in US. Second, you will also probably be liable to personally file a return in the US and unless the US has a tax treaty with your native country . if npt,you may end up paying taxes on your same income to both countries.

With Amazon's FBA program, the foreign corporation (FC) can sell on the Amazon.com platform in the US. The inventory is stored in Amazon's warehouses in the US and the FC owns the inventory up until Amazon facilitates the sale between the FC and US customer.

The FC has no physical presence in the US. It just sends its inventory from China to Amazon's warehouses and then sells it via their platform.

Based on this do you think I am or am not a US Trade or Business (USTB)?=======>Yes; your biz is USTB ;Corps/LLCs that are doing business in a US state or have income from a state source are required to file a return with the state. Doing business" means being engaged in any profit-seeking activity in a state in US. An entity having a stock of goods in a state is clearly doing business in the state in US in general: you need to contact the state where you have a stock of your goods for more info in detail.




If I am a USTB then I have to look to PE and country specific tax treaties which I think in general would exempt me from tax but I would still have to file.=====>Correct as mentioned above. You need to file both federal level and state return with the state dept of revenue where you have a stock of goods.Foreing citizens set up LLCs in DE/NV states.

If I can say I am not a USTB then I don't have to file at all.==>Correct not at all UNLESS you have US source income.

Also I am hoping that if I say I am not USTB then I could also create a US LLC pass-through entity owned my the FC that could accept payments from Amazon.com and pay for various SAAS tools with a USD credit card in the LLC's name.===>Correct;UNLESS you have US source income that you earned in US, you do not need to file any return. you can even create a reg C corp in US however you need to pay some amt of $150 I guess excise tax to the state where yu incorporated your biz.



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Old 09-02-2016, 12:39 PM
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Foreign Owner, Selling On Amazon, Deducting Compensation To Officers

My business in Incorporated in Nevada. I'm the owner and I live in Malaysia. I sell on Amazon. Can I pay myself and deduct as "compensation of officers"? Please let me know... Thank you!



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Old 09-02-2016, 02:38 PM
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Quote:
Originally Posted by DELGADOTAX View Post
My business in Incorporated in Nevada. I'm the owner and I live in Malaysia. I sell on Amazon. Can I pay myself and deduct as "compensation of officers"? Please let me know... Thank you!
My business in Incorporated in Nevada. I'm the owner and I live in Malaysia. I sell on Amazon. Can I pay myself and deduct as "compensation of officers"? ========>>>>>>>Of course; as you formed a C corp in NV, your corp will be taxed as like any other US corp. The corp will pay the same taxes that any other US corp would on all US-sourced income and your NV corp would also be taxed on all foreign earnings, in accordance with US Treasury regulations. Since the corp was formed in the US, it is taxed as a domestic corp and you will file Form 1120.On your form1120, you can claim yur compensatin of officers as a part of your biz operating expenses. In your C-Corp you will have to pay the IRS, and then when you transfer the money in your native accounts, pay taxes on these dividends again;howver,


Note;
generally speaking LLC is a better option for NON-US Residents rather than a C-Corp; I know many non US residents just simply follow what their tax pros recommend them incorporate in US however, if you only plan to sell goods, perhaps through the Internet or wholesaling to U.S. companies, it may not be necessary to form a U.S. company. You may also give some forethought to the fact that some U.S. consumers are more likely to purchase things over the Web from a U.S. company rather than overseas, so it may be desirable for marketing purposes to incorporate in the US as well.in C-Corp the revenue of the company is taxed and later when the profits are paid out as dividends, the Individual is taxed again. Hence the word DOUBLE-TAXATION.
In LLC the company is not taxed at all, and are passed through to the individual running the show to file the company's taxes in his personal returns.State taxes depend on where the company is formed. So, companies owned by foreign nationals who want to do business in theUS must weigh the options of whether or not to form a corporation or LLC/



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Old 09-02-2016, 05:01 PM
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My business in Incorporated in Nevada. I'm the owner and I live in Malaysia. I sell on Amazon. Can I pay myself and deduct as "compensation of officers"? ========>>>>>>>Of course; as you formed a C corp in NV, your corp will be taxed as like any other US corp. The corp will pay the same taxes that any other US corp would on all US-sourced income and your NV corp would also be taxed on all foreign earnings, in accordance with US Treasury regulations. Since the corp was formed in the US, it is taxed as a domestic corp and you will file Form 1120.On your form1120, you can claim yur compensatin of officers as a part of your biz operating expenses. In your C-Corp you will have to pay the IRS, and then when you transfer the money in your native accounts, pay taxes on these dividends again;howver,


Note;
generally speaking LLC is a better option for NON-US Residents rather than a C-Corp; I know many non US residents just simply follow what their tax pros recommend them incorporate in US however, if you only plan to sell goods, perhaps through the Internet or wholesaling to U.S. companies, it may not be necessary to form a U.S. company. You may also give some forethought to the fact that some U.S. consumers are more likely to purchase things over the Web from a U.S. company rather than overseas, so it may be desirable for marketing purposes to incorporate in the US as well.in C-Corp the revenue of the company is taxed and later when the profits are paid out as dividends, the Individual is taxed again. Hence the word DOUBLE-TAXATION.
In LLC the company is not taxed at all, and are passed through to the individual running the show to file the company's taxes in his personal returns.State taxes depend on where the company is formed. So, companies owned by foreign nationals who want to do business in theUS must weigh the options of whether or not to form a corporation or LLC/



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Old 09-02-2016, 08:31 PM
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ALL PROFITS AS compensation to officers ?

So, I can deduct all of my profits as compensation of officer? Thank you!



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