Tax for business in other countries

[EDINN2505 3]

Do you pay taxes in USA for business, companies you own in other countries or you pay where company is? Is it different for US citizens and permanent residents?

[kris&me 572]

If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation ($92,900 for 2011, $95,100 for 2012, $97,600 for 2013, $99,200 for 2014 and $100,800 for 2015). In addition, you can exclude or deduct certain foreign housing amounts.

You may also be entitled to exclude from income the value of meals and lodging provided to you by your employer. Refer to Exclusion of Meals and Lodging in Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, and Publication 15-B, Employer's Tax Guide to Fringe Benefits for more information.

Other Rules

Not foreign earned income: Foreign earned income does not include the following amounts:

• Pay received as a military or civilian employee of the U.S. Government or any of its agencies
• Pay for services conducted in international waters (not a foreign country)
• Pay in specific combat zones, as designated by an Executive Order from the President, that is excludable from income
• Payments received after the end of the tax year following the year in which the services that earned the income were performed
• The value of meals and lodging that are excluded from income because it was furnished for the convenience of the employer
• Pension or annuity payments, including social security benefits

[EDINN2505 3]

If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation ($92,900 for 2011, $95,100 for 2012, $97,600 for 2013, $99,200 for 2014 and $100,800 for 2015). In addition, you can exclude or deduct certain foreign housing amounts.

You may also be entitled to exclude from income the value of meals and lodging provided to you by your employer. Refer to Exclusion of Meals and Lodging in Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, and Publication 15-B, Employer's Tax Guide to Fringe Benefits for more information.

Other Rules

Not foreign earned income: Foreign earned income does not include the following amounts:

• Pay received as a military or civilian employee of the U.S. Government or any of its agencies
• Pay for services conducted in international waters (not a foreign country)
• Pay in specific combat zones, as designated by an Executive Order from the President, that is excludable from income
• Payments received after the end of the tax year following the year in which the services that earned the income were performed
• The value of meals and lodging that are excluded from income because it was furnished for the convenience of the employer
• Pension or annuity payments, including social security benefits

I meant if you live in USA but you are owner of some business in other country with employees.

[Nich-Nick 3,354]

I meant if you live in USA but you are owner of some business in other country with employees.

It depends on the tax treaty between the US and your country. In general, if you live in the US as a citizen or permanent resident, or "resident alien" you pay taxes to the US on all the income you earn anywhere and follow US tax law concerning how to report, what is deductible as expenses, depreciated, etc. and you would not report or pay to the foreign country. You would have to check with the foreign country as well. For example the reverse...an American living in Spain still has to report income to the US on a tax return. They don't likely have to pay any taxes to the US because they are paying Spain. BUT Americans abroad do inform the IRS of their income via a tax return. Some countries simply have a form to fill out whereby you say I'm leaving and won't be doing a tax return anymore. (United Kingdom has that). Check to see what your country requires.

But each treaty is different, so find the details. The IRS website has all treaties published. The foreign income exclusion mentioned to you does not apply once you move to the US. It can apply to your first year when your residence is split between two countries within one tax year.