I am a UK web developer (limited company) who is planning to reach out into the US market (particularly targeted at schools where I have identified a potential gap in the market).
I don’t have, and don’t intend to have, a physical presence in the USA, or a company registration in the USA.
Do I need to pay any US taxes on my sales, and/or do I need to register with the IRS or US authorities?
Many thanks for any advice.
You shouldn’t have to pay US taxes on your sales, but your US customers may need to justify paying funds to you without withholding tax. To be on the safe side you should fill in form W-8BEN-E. You can find it here: http://www.irs.gov/file_source/pub/irs-pdf/fw8bene.pdf
Its very easy and quick. Instructions on filling it in can be found here: http://www.irs.gov/file_source/pub/irs-prior/iw8bene–2014.pdf
This allows your UK Ltd company to register with the IRS as a foreign entity doing business in the US. It confirms that because you are a UK company and covered by the UK-US tax treaty, your company income is taxed in the UK and thus you aren’t liable for US taxes on your US sales. Your US customers may need to see a copy of the completed form when paying your invoices.
That’s really helpful thank you Tim.