Liability & Legality

**Bookworm-SEO** · 07-13-2006, 01:58 AM

Where do you pay taxes on internet revenue? It wasn't technically 'made in a country' as the internet is international, like the high seas, in my opinion (not a legal opinion, just MHO)? What about if your customer is in another country?

On a related note, any suggestions and knowledge on incorporating in a tax-free country (bahams or whatever)?

**pcdoc** · 07-13-2006, 08:06 AM

Where do you pay taxes on internet revenue?

You pay personal or business taxes to your local taxing authority.

In the USA you pay federal income tax and most states have both a personal and business taxes.

**LeeD** · 07-13-2006, 08:44 AM

Yes, web income is taxable and I don't think you can rightly avoid no matter which country you live in.

**Pax** · 07-13-2006, 09:44 AM

what about in a partnership between people in two dif countries?

**beley** · 07-13-2006, 10:11 AM

Quote:

Originally Posted by Pax

what about in a partnership between people in two dif countries?

If your partnership contains one person in the US, I would recommend all the revenue going to the partner in the US and then paying out payments to the partner abroad. Then, you could possibly write off the payments to the international partner as expenses and not be taxed on that income.

And since they are not in the US, they would not be obligated to pay US tax on that money... so that portion of the revenue would never be taxed.

I am not an accountant though, and you might want to talk to one as they are professionals and would know best.

**xboxundone** · 07-13-2006, 10:19 AM

In the US always pay your taxes and if you make any significant amount pay quaterly as uncle sam can hit you with a penalty if he likes for not paying quaterly!

**Pax** · 07-13-2006, 10:25 PM

Quote:

Originally Posted by beley

If your partnership contains one person in the US, I would recommend all the revenue going to the partner in the US and then paying out payments to the partner abroad. Then, you could possibly write off the payments to the international partner as expenses and not be taxed on that income.

And since they are not in the US, they would not be obligated to pay US tax on that money... so that portion of the revenue would never be taxed.

I am not an accountant though, and you might want to talk to one as they are professionals and would know best.

We also have to pay tax in other countries lol.

**Bookworm-SEO** · 07-14-2006, 01:28 AM

How about my question on incorporation? What if you incorporate abroad, and have it worked out like that?

Also, does anyone have links to legal resources on internet law and taxation? I'd be especially interested in canadian law...