I have some questions about taxes
for a US
company that is owned by a foreign
OK, let's make the following assumptions:
- The US company is incorporated in the state
of Delaware as an LLC
- The US company is 100% owned by a Hong Kong company.
- There are no USA-citizen or USA-resident shareholders
or directors of the Hong Kong company.
- The US company's business is 100% virtual. (No physical offices or employees, etc…)
- The US company makes $1m revenue. $200k is from customers located outside of the US. $800k is from customers located in the US, including $100k from customers located in the state of Delaware.
- To keep things simple, we'll say the US company has no expenses. So the $1m revenue = $1m net income
1. How much Delaware state tax would be payable by the US company?
2. How much US federal tax
would be payable by the US company?
3. Could "transfer pricing" or some other method help reduce the amount of US state and/or federal tax payable?
For example, let's say the Hong Kong "parent" company invoices the US company for an operations manager that costs $150k per year and a secretary that costs $50k per year. The US company would record this as $200k of expenses, right? Would this "expense" therefore decrease the amount of net income for the US company by $200k? (ie: It would effectively "transfer" $200k of pre-taxed revenue to the Honk Kong company?)
4. What is your advice and suggestions for the following:
- I am a non-US person living outside the US.
- My business is 100% virtual (no office or anything else and I am the only employee), so I can "run" it from anywhere in the world.
- I would like to expand to the US market, so I'm trying to figure out if it's possible to have a US company that sells to US residents, but pays as little US corporate taxes
In other words, how do google, Starbucks, Microsoft, Amazon and all those companies end up paying only a few % in taxes? (I read such stories all the time, about how they make billions in revenue in the US, but pay only a few % in taxes because they "transfer" it offshore…)
I'm quite happy to pay 5% to 15% corporate tax in the US. Any more than that, and it just isn't worth it… is this possible?