also called PE
A taxable business presence a company is deemed to have in a country, for example through a fixed place of business or a dependent agent.
The point where your company stops being a visitor in a country and starts being taxable there. It usually turns on having a fixed place of business, or someone on the ground who can bind you to contracts. The catch for people working remotely is that a person can create it: you sitting in an apartment closing deals can be enough for the tax authority to say your employer now has a presence there.
You take a remote job and spend most of a year working from another country without telling anyone. Your employer has no office there and no idea. The exposure is not yours, it is theirs, which is exactly why companies write policies about where you may work from.
Running your company's work from a country you live in can create a taxable presence there for the whole company.
The difference is the whole point, so here is each one in a line.
These are the rules that reach through a company to tax an owner or create a tax bill abroad.
Controlled Foreign Corporation rules tax a resident on a foreign company's profits even if it never pays them out, and GILTI is the US version aimed at low-taxed foreign profits.
A PFIC is a US classification that punishes Americans holding many foreign funds, and permanent establishment is when a company's activity in a country is enough to be taxed there.
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