Okay, need some education here.
in US, if you have income in foreign land and spend it there then you don’t have to ‘report’/pay taxes on that (I think)?
Re: Tax system in Pakistan
dude, where did u hear that from?
US citizens and residentsare supposed to pay taxes for any income worldwide.
http://www.expatfocus.com/expatriate-taxation-us-citizens-abroad.php
thats when dem middle east recruiters come knocking, i tell them that the moneythey are offering is simply not worth me packing up and moving, and selling my place here, coming back to find a more expensive housing market (usually) and trying to find a local job again.
i ran the number a few times with companies like Aramco, and the marginal difference was simply not worth it.
Re: Tax system in Pakistan
dude, where did u hear that from?
When I was reading about how corporations play with the tax laws and form companies abroad in one of the articles.
Re: Tax system in Pakistan
When I was reading about how corporations play with the tax laws and form companies abroad in one of the articles.
yeah if they form foriegn subsidiaries then those subsidiaries are not subject to US taxes, although repatriating profits is a tricky thing then.
u can form a forgen corporation and be thesole shareholder, transfer assets, not make any US investments through that coproration and never pay yourself a dividend... bt then subpart F comes to get u.
anyways diff topic
Re: Tax system in Pakistan
yeah if they form foriegn subsidiaries then those subsidiaries are not subject to US taxes, although** repatriating profits** is a tricky thing then.
Thats what I meant when I said "use the money there" (don't repatriate it).
[quote]
u can form a forgen corporation and be thesole shareholder, transfer assets, not make any US investments through that coproration and never pay yourself a dividend... bt then **subpart F **comes to get u.
[/quote]
what be that? Please split thread into appropriate forum... I would like to know more on that too.
Re: US citizens/residents/corporations and international taxation
in the example i gave above, US shareholders get taxed on part of the income . the entity is referred to as controleld foriegn corporation, and the subpart F income which has a few different components which i dont remember all at the top of my head, include income from rent, royalties, interest, they are taxable. but there are certain exceptions which may have changed since I last dabbled in this, but can look it up. its called the deminimis exception for CFCs and used to be $1M or 5% of gross CFC income.
Re: US citizens/residents/corporations and international taxation
Okay.... the link you provided in post #2 is for people who MOVE to foreign country (whether for few days work or whole year), correct?
If a foreigner is LIVING in US (for full year) and has a rental property in other country and does not repatriate that money... is he required to show that income ($500-$2000 per year)?
Re: US citizens/residents/corporations and international taxation
are u a US citizen or permanent resident? if so, yes
if not, I am not sure.
Re: US citizens/residents/corporations and international taxation
^ I will be voting next election 
… pata nahi kis ko doon ga 
What if I form a real estate (or some other) company in Pakistan which gets all the rent?
Re: US citizens/residents/corporations and international taxation
if u are voting next election then that means u are a permnent resident, and that means you are liable for tax for foriegn income, and if u do form a foriegn corporation than the CFC issue and scheduleF that will come into play.
u may want to talk to your tax advisor, u dont want it to come bite you in the butt.
Re: US citizens/residents/corporations and international taxation
if u are voting next election then that means u are a permnent resident, and that means you are liable for tax for foriegn income, and if u do form a foriegn corporation than the CFC issue and scheduleF that will come into play.
u may want to talk to your tax advisor, u dont want it to come bite you in the butt.
Sidenote: Permanent residents cannot vote, only citizens can.
Re: US citizens/residents/corporations and international taxation
see this is how the logic flows..
u said..
which to me meant you were not a citizen.
then you said
since u had used the word foriegner, i assumed you were a perm resident who was going to be a citizen by the time elections roll around 
if u are a citizen, or a perm resident and you have properties in pak for which there is rental income in Pakistan, as it stands you are in violation of IRS regulations.
Re: US citizens/residents/corporations and international taxation
Form a Bermuda corporation, contribute your foreign assets to that corporation and you can then repat earnings to and keep it in Bermuda. Just take vacations in Bermuda! voila you are vacationing on US tax free money.
When you need the money in the US just pay in just what you need. US will tax you BUT will give you foreign tax credit for whatever you paid as tax in Pakistan.
Also look up what countries Pakistan has tax treaties with.
BTW none of these may be an issue if the property and the rent are small amounts
Re: US citizens/residents/corporations and international taxation
if u are a citizen, or a perm resident and you have properties in pak for which there is rental income in Pakistan, as it stands you are in violation of IRS regulations.
:(
theek hay yaar aap to khafa ho gaye... the 'rental' started off as 'foreigner' then changed into other states :)
Re: US citizens/residents/corporations and international taxation
Also look up what countries Pakistan has tax treaties with.
Last I checked when I was on H-1B Pakistan didn't have one with US, I'll check to see if there is any change since then... thanks.
Re: US citizens/residents/corporations and international taxation
theek hay yaar aap to khafa ho gaye... the 'rental' started off as 'foreigner' then changed into other states :)
not khaffa. just moping because i did not have better news.
basically when u became a permanent resident u needed to show rental income as taxable income in US.
Re: US citizens/residents/corporations and international taxation
Form a Bermuda corporation, contribute your foreign assets to that corporation and you can then repat earnings to and keep it in Bermuda. Just take vacations in Bermuda! voila you are vacationing on US tax free money.
When you need the money in the US just pay in just what you need. US will tax you BUT will give you foreign tax credit for whatever you paid as tax in Pakistan.
Also look up what countries Pakistan has tax treaties with.
BTW none of these may be an issue if the property and the rent are small amounts
CFC issue may still apply
Re: US citizens/residents/corporations and international taxation
Correction: There is tax treaty but it does not mean Pakistanis (who are not Resident or Citizen of US) do not pay income taxes in US. I haven’t figured out what kind of treaty it is
Re: US citizens/residents/corporations and international taxation
Normally the minimus such tax treaties will contain is provisions for elimination of double taxation. If you pay taxes in Pakistan (assuming such a treaty exists) US will give you a foreign tax credit.
If it is a lot of money involved (millions) then you may also look at 3rd country but in that case I am sure you can afford to hire real tax lawyers!
Re: US citizens/residents/corporations and international taxation
for foreig tax credits u hafta see what the tax rates in both places are, and the burden of proof is on you. if uncle sam finds out you have had taxable income and u have not reported it properly it can bite ya big time.