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If you are merely selling from your UK base and do not have any nexus in the US, you do not have any US tax liability.
Selling a product to a US customer does not subject you to any US tax. Unlike Europe, we have no VAT in the US, so sales tax or sales & use tax, is only collected from the customer if the seller has a US presence.
So, in addition to no income tax liability, you have no VAT or sales tax responsibilities either.
Sell it to us! We wanna buy!
Depending on your product, you may have US import tariffs, but that is a horse of a different shape.
What kind of letter(s) did you receive from IRS?
Usually there is a number in the top right corner
Also, what type of products are you selling to the US customers?
Are you selling wholesale or retail?
Letter has no ID number other than SS-4 which is the form that applied for the EIN in the first place. They asked us to submit Form 1065 before 04/15/2013 but that is for a Partnership which we arent, and goes into all sorts of revenue and cost declarations. I know we have a double taxation treaty but the IRS form monster seems to have hold of us ! What do we file that satisifes the US that we are a legitimate UK company that should only pay UK tax ?
Try CP 575 B
Put this into google and you'll see the exact notification am referring to
You filed with the IRS to tell them you were subject to US tax as a partnership type entity. A CP 575 refers only to the fact you have an EIN assigned.
A foreign entity is not subject to withholding, period. Only foreign persons are, as well as pass-through entities.
IRS Publication 515 only references how withholding works if you are an individual or pass-through to an individual. This is meant really to stop foreign wages from being exempt from taxes to individuals. It is not meant to stop international commerce.
I am researching that information as to how to indicate to your payer that you are not subject to withholding and it may be a few minutes before I can get that information to you.
Assuming all of your owners have limited liability on your end, then the entity should be classified as a foreign CORPORATION, not partnership. You will need to write to the EIN office at the IRS to have this corrected, as it is most likely that you should be treated as a corporation.
Instead of filing 1065 at the end of the year, you would file a Form 1120-F instead.
Revenue derived from US sources is effectively taxed on this form rather than the 1065.
You would still be exempt from source withholding.
If you file a 1065, each member of the LLC would also need a tax ID number so that the taxation can be flowed to the individual members.
Thanks........this is where I ended up !
Its this reporting / accounting that I wanted to avoid...but I think you have reached the same conclusion