- What are the Tax implications for US company hiring offshore software consultants?
- How different is it from hiring a consultant from US in tax filings?
- Are taxes higher for a US Company to hire an offshore consultant?
The main implication is the withholding of taxes from the payments. You must withhold and remit to the IRS 30% of the payments sent to the non-resident contractor.
If you're asking about the difference between the resident and non-resident contractors - then that's the difference: for non-residents you're required to withhold, for residents you're not required to withhold (unless there's a specific withholding requirement for that particular person).
Higher, you mean? No, there's no tax on hiring consultants (as contractors, that is), whether on-shore or off-shore. The withholding is from the money you pay to your consultant, its the consultant's tax, not yours.
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