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I am a US citizen, but a permanent New Zealand resident. I own my own company here (it's just me in the company), as it allowed me to not pay the self-employment tax America wanted to charge me for contracting with NZ companies. I have been thinking about doing some freelancing work with US companies, but fear it may be way more of a headache than its worth. Either way, my questions are:

1) Can US companies pay my NZ company through Paypal without me setting up a company in the US or somehow registering my company with the US?

2) What are the tax implications for the US side if a US company can pay my NZ company for freelance work? i.e. Will I need to file quarterly taxes or corporate taxes with the US?

I know what happens on the NZ side, but am having real trouble finding out what happens and what the tax implications are on the US side. Thanks for any help you can give!

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1) of course US companies can hire a non-US company. Unless The Idiot Formerly Knowm As Trump passed some new law that I am not familiar with restricting any business with non-US companies. (which he didn't, many of his companies use non US contractors)

2) No you don't. You pay taxes in NZ. That's why everybody hates Apple and Starbucks for having companies in Ireland, you pay taxes where you earn.

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IANAL/IANYL

I think you better check out the IRS rules!

From the corporate side, taxes can be tricky when international business is involved. For that you really should contact a live tax professional/attorney.

As to your personal liability, there is no question about it: you owe incomce tax. The way it's set up, it looks like your income comes from the NZ company, making them your "employer", if you get paid for services to the company. Alternatively it could be dividends, or some other form of "unearned" income if the money merely "passes through" the company. In any case, you have income.

According to the IRS:

If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside.

As a side note, if your NZ company pays you for work, then the "self-employment" tax you are trying to avoid may still apply. That self-employment tax is your payment into the Social Security system, which you and your employer would have made if you had a "regular" job. Since you are both employee and employer, you get to make both contributions (double the rate) into the Social Security fund.

In addition, the income tax, and maybe the "self-employment" tax, apply even if you never do business outside NZ; who/where the clients are makes no difference, only that you are a US citizen with personal income. You need a professional's advice, not random Internet postings.

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