Legal Question in Technology Law in Minnesota

Tax consequences of a opening a branch office of foreign company

Scenario: An ecommerce busness in India is hosted on a US soil doing business all over the world. The revenue goes directly to the Indian bank account. The company pays taxes in India. This company needs to have a branch office in US. The branch office will ONLY do customer service not sales. Does the company need to pay taxes in US as well?


Asked on 7/16/04, 11:00 am

1 Answer from Attorneys
Daniel Press Chung & Press, P.C.

Re: Tax consequences of a opening a branch office of foreign company

Yes, the company will need to pay taxes on U.S. source income, or pursuant to whatever tax treaty exists between USA and India. It certainly makes sense to get competent advice from an international tax practitioner (which I am not). You may want to consider the benefits of setting up a separate US entity, keeping the offshore co. offshore.

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Answered on 7/16/04, 2:45 pm


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