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Where Taxpayers and Advisers Meet

Tax Query

mburkitt
Posts: 1
Joined: Thu Feb 09, 2017 10:37 am

Tax Query

Postby mburkitt » Thu Feb 09, 2017 11:30 am

Hi all

We are a business in London that is looking to open an office in California. All of the produce will be created in the UK. The Californian office would be for client relations only, any sales contracts will be with the UK office.

My query is regarding the tax on our employee in the US office. He is a US citizen but will be still be employed by the UK company and paid from here only.

Can you guys tell me if the employee would be liable for tax in the US at all?

Thanks!

bd6759
Posts: 3109
Joined: Sat Feb 01, 2014 3:26 pm

Re: Tax Query

Postby bd6759 » Thu Feb 09, 2017 6:04 pm

Yes. A person living and working in the USA would be liable to tax in that country.

AmanSood
Posts: 215
Joined: Mon Jan 09, 2017 4:12 pm

Re: Tax Query

Postby AmanSood » Fri Feb 10, 2017 8:23 am

Just to also expand, there are a few other considerations. 1) Assuming you are operating out of an office in the US and have an establishment in the US, then it's likely you would need to set up a payroll in the US and withhold taxes/FICA/medicare; 2) also there could be potential corporate tax implications for the establishment in the US and you may need to declare some profits in the US under the BEPS (Action 7 requirement). 3) If you have any of your UK employees visiting the US, then they could increase the permanent establishment risk and potentially result in them being liable to US income tax as well.
Advising on UK employment, expatriate and personal taxes
aman.sood@e-taxconsulting.com.
+44 (0) 207 846 0155


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