Non-U.S. Persons or Non-U.S. Individuals (not U.S. residents nor U.S. Citizens) are subject to U.S. Taxes only if his or her source of income is U.S. Sourced.
If a U.S. Person pays a Non-U.S. Person, and it is determined that the payment is U.S. Sourced, the payor will have to withhold taxes (withholding tax) from or to the Non-U.S. Person.
The factor determining the Source of Income will depend on the payment concept, for example, if it is a Royalty Payment, Salary, Rent, Pension, Sale of Property, etc.
The Factor for determining the Source of Income for Salary and Wages, or personal services, is where the services are performed.
So if I am an employee (Salary and/or Wage) or Independent Service Provider (Business Income: personal Services) of a U.S. company, but I perform my services outside of the U.S. Soil, then I will not be subject to income tax.
This information is backed by the IRS in the following links:
https://www.irs.gov/individuals/international-taxpayers/nonresident-aliens-source-of-income
https://www.irs.gov/pub/irs-pdf/p519.pdf
So, as a non-resident sole owner of a sole member LLC, a disregarded entity, that engages in U.S. trade, by creating an Employment Agreement or Independent Service Contractor can I reduce my tax base and not pay taxes if I differ the income as Salary and not as dividend?
Therefore, the correct structure, an Employment or Service Contract, and the correct legal and tax counseling can save me a lot of money in taxes.
About the Author:
Jean Franco Fernández Clark
Corporate & Tax Lawyer.
Speaks English/Spanish/French/Italian/Russian. 我学习汉语。