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Posted Thu, 21 Dec 2023 12:14:10 GMT by
I'm in the process of making a UK Limited Company that is going to make websites. My first employee other than myself and the other director is going to be an independent contractor who sells the websites to US Businesses and gets paid a commission out of the deals that they close. When invoicing a US Company for the website, do I have to pay any US taxes? Are there any rules in place that forbid this? Is it entirely covered by the US-UK Double Taxation Treaty that this should only be taxed on the UK side because it's a UK company that is doing all of the work to provide the website?
Posted Thu, 04 Jan 2024 12:32:20 GMT by HMRC Admin 20 Response
Hi atlanticsites,
UK companies do not pay Corporation Tax to another country on the profits from sales in that country unless they trade through a permanent establishment there.
Instead, they pay Corporation Tax on those profits in the UK.  In this case it will depend on where the "supply" is made.
 If the employee (I assume based in US) is actually making the sale then that would appear to be a supply in the US made through a permanent establishment there.
Thank you.


 

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