Forum Archive Index - September 2003

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi Amber,

I would suggest that this is the kind of question where you should 
contact the IRS website in the first instance and go from there.

http://www.irs.gov

Warning:  I am not trained in US tax laws so what follows should not be 
regarded as taxation advice.   However, to answer your questions as 
best I can:

>
> I understand the double taxation laws pertaining to which country you
> reside is the country you pay. However, If you are the 100 percent
> shareholder in a US company and reside in New Zealand, which country
> will you be required to pay taxes?
>

A company and a person are two different legal entities for taxation 
purposes.   Your US company will pay tax in the USA and if you are a 
New Zealand resident then you will pay tax here.

>
> I am not a permit holder in the US,
> but I am the owner and 100 percent shareholder. Can I assume that I
> will be taxed in the US because that is the main office and not in New
> Zealand?
> 

Exactly how you are taxed will depend on what happens to the income 
that comes into your US company.  If you retain it within that company 
(to fund future expansion in the US for example)  and pay nothing to 
yourself then you in New Zealand will pay no tax on that income.   After 
all until money is paid across to you personally it isn't your income so 
how can you be taxed on it?

I don't know what you mean by the term 'main office'.   AFAIK the only 
thing that matters is where the company is legally registered.  If the 
company is registered in the USA it will pay tax there.   I know there 
are different rules for the treatment of income from shares (as a small 
shareholder) and 'income that is connected with the conduct of a trade 
or a business within the United States'.     But I don't know what that 
difference in tax treatment is.

SNOOPY

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