In principle, the U.S. tax laws seek to impose a tax on every company that is considered to be doing business in the USA. Most U.S. income tax treaties exempt resident companies and individuals of the other treaty country from U.S. federal income taxes on business profits if they do not have a PE in the United States. A Permanent Establishment (PE) is defined therein.

Criteria

Description

A permanent establishment for a business is a fixed place where the business activity is wholly or partly carried on.  » Read more about: Rules around permanent establishment  »

When is a company considered a US resident?

A business entity (including an entity that is disregarded as separate from its owner under § 301.7701-2(c)) is domestic if it is created or organized as any type of entity (including, but not limited to, a corporation, unincorporated association, general partnership, limited partnership, and limited liability company) in the United States, or under the law of the United States or of any State. Accordingly,

 » Read more about: What is my business’ tax residency  »