can generally conclude contracts on your
behalf without creating a taxable presence in
that country. However, if that person were an
employee (whether an actual employee or a de
facto employee), then a taxable presence would
be created if he or she were concluding contracts.
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In countries where there is no treaty, the mere
existence of a salesperson, independent or not,
may trigger a taxable presence. Understanding
the threshold for creating a taxable presence in a
country is key to this analysis.
While income
taxes are generally
governed by tax
treaties, non-income
taxes (in this case
sales taxes) are
governed by each
country’s own domestic tax laws. Therefore,
having an individual in a country generating
sales can create a presence for sales taxes
without creating an income tax presence.
And thus, if you were able to avoid the
administration of registering for, collecting, and
remitting sales taxes when you were selling
directly, having an individual in the country may
now trigger that registration requirement.
Having an individual in a country generating sales
can create a presence for sales taxes without
creating an income tax presence.
(IC-DISC), which permits US taxpayers to reduce
the US tax owed on their exports.
The IC-DISC was originally added to the
Internal Revenue Code back in 1984. But absent
additional legislation, for most exporters the
IC-DISC is set to expire at the end of 2012. Even
