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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
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I am living in Curacao, Netherlands Antilles and

Customer Question

Dear Sir,
I am living in Curacao, Netherlands Antilles and have incorporated a Delaware LLC. I would like to create an affiliate website in order to sell on the internet. I would like to know whether I will be taxable in the USA
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.
Hi and welcome to our site!A Limited Liability Company (LLC) is a business structure allowed by state statute.Depending on elections made by the LLC and the number of members, the IRS will treat an LLC as either a corporation, partnership, or as part of the LLC’s owner’s tax return (a “disregarded entity”).So - if that is a single member LLC - all income and deductions must be reported on your individual tax return.As a nonresident alien - you are generally taxed ONLY on income from US sources.There are some complex rules to determine the source of income. You may take a look - page 13 IRS publication 519 -http://www.irs.gov/pub/irs-pdf/p519.pdf- Table 2-1. Summary of Source Rules of Nonresident Aliens.As you see the factors in determination of the income source income:Personal services - Where services performed.So when services are provided by nonresident aliens and are provided outside the US - that income is not taxable in the US..regarding Sale of inventory — which was purchased - the factor to determine the source of income - where sold - so if sold outside the US - that income is not from US sources.But when sold to US buyers - that income is from US sources - and is subject to US income tax.
Expert:  Lev replied 1 year ago.
As you might know - ther eis a tax treaty in effect between the US and Netherlands - http://www.irs.gov/pub/irs-trty/nether.pdf
The article 7 Business Profits
1. The profits of an enterprise of one of the States shall be taxable only in that State unless the enterprise carries on business in the other State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment.
So while under some circumstanced that income might be from US sources and as such might be taxable for you as a nonresident alien - such income may still be excluded from US taxable income based on the tax treaty provision.
Let me know if you need any help.