Amy's International tax

    The "Export Service" Problem: Field services performed by an Australian entity in a foreign country (PNG) for a foreign resident (the PNG Buyer) are almost certainly GST-free (zero-rated) as an "export service" under Australian GST law. They are not a "Taxable Supply."  A single service cannot typically be subject to both PNG GST and Australian GST.    * PNG GST applies because the services are performed in PNG.    * AU GST applies only if the service is a "Taxable Supply" under Australian law. The parties agree the Price payable under this Agreement is exclusive of GST. : This is a standard and well-drafted "gross-up" clause. It is protective for the Seller, ensuring that any GST liability is an additional cost to the Buyer and does not eat into the Seller's margin. This clause is good for the Seller.

 It is  required to change your current billing model for this transaction. The current flow China entity (Trainer cost) -> US entity (Enterpreneur)  -> SG entity (invoicing entity to the customer) is not compliant because it doesn't reflect the economic substance of the transaction. 1. The Core Principle: "Arm's Length" & Economic Substance The China tax authority's response is based on a fundamental global tax principle: Transfer Pricing  Economic Substance: The entity performing the service (China) must charge a fair, market-based price ("arm's length") to the entity that is benefiting from that service (SG which holds the contract with the end customer) China entity is performing work in China, so it must earn a taxable profit in China for that work. The Problem:   flow (Beijing -> the US) breaks this link. China entity is doing work for SG, but billing a third party (US entity). The tax authori...

  vat-and-digital-services-in-africa-v2.pdf In theory, the US entity would be required to VAT register and pay 19.25% VAT in Cameroon where digital services are provided to Cameroonian customers (both B2C and B2B), as there is no registration threshold.  However, assuming customer is a locally VAT registered business, they will be required to apply the reverse charge.

 For the distribution, then we have the intercompany agreement for the sale of the products less a discount.  For those, we need to take a look at the returns (like Australia) and adjust the intercompany price if the results aren't within an arms-length range. Royalty exp. <=> Royalty income (under the License agreement)  Commission income & expense for others without the agreement IP, residual royalty, know-how (intangible)- Does treaty protect no matter what? 

What is a Service Permanent Establishment (PE)? A Permanent Establishment (PE) is a concept in international tax law that determines whether a foreign company has a sufficient business presence in another country to be subject to that country's corporate income tax. A Service PE is a specific type of PE that is created not by having a fixed office, but by the physical presence of employees or personnel of a foreign company furnishing services within another country. How is a Service PE Triggered in India? Most of India's Double Taxation Avoidance Agreements (DTAAs), including those with the USA and Singapore, contain a Service PE clause. This clause is typically triggered if a company's employees or personnel provide services within India for a period exceeding a certain threshold (e.g., more than 90 or 183 days) within any 12-month period.   Example 1. Who: Employees of your company 2. What: They provided services in India 3. Where: They were physically present in India t...

Firstly, transitioning a portion of the business to a C corporation means that the income will be subject to corporate income tax rates, which are generally higher than individual rates applied to S corporation income .  C corporations face double taxation, where income is taxed at the corporate level and again at the shareholder level when dividends are distributed   . The remaining S corporation portion will continue to pass income directly to shareholders, who will report it on their personal tax returns, potentially benefiting from lower individual tax rates   . Additionally, the change in structure may affect the business's eligibility for certain tax credits and deductions, as C corporations and S corporations have different rules regarding these benefits . The business must also c onsider state-level tax implications , as states may have different rules for C corporations and S corporations, affecting state income tax liabilities . Furthermore, the transi...

1. General Principles of Pass-Through Taxation Pass-through entities (PTEs) include partnerships, S corporations, LLCs taxed as partnerships or S corporations, and certain trusts. These entities generally do not pay income tax at the entity level. Instead, their income, deductions, credits, and other tax items "pass through" to the owners, who report and pay tax on their share of the entity’s income on their own tax returns . States vary widely in their treatment of PTEs. Some conform closely to federal flow-through principles, while others impose entity-level taxes or have unique rules for allocation, apportionment, and compliance . 2. State-Level Pass-Through Entity Taxes (PTETs) In response to the federal limitation on the state and local tax (SALT) deduction under  IRC § 164(b)(6) , many states have enacted elective entity-level income taxes on PTEs. These allow the entity to pay state income tax at the entity level, which is deductible for federal tax purposes, there...