WHY CHOOSE US
February 22, 2017
Air Hostess & Pilots-Tax Implication
February 21, 2017
Advantages of the Holding Company Structure in Setting Up Companies in the US
September 5, 2016
Foreign Persons Having Business in the United States-Tax Implication
Are Audited Financial Statements Necessary?
Relief for Tax Payers Owing Huge Tax Bills to the IRS
August 1, 2016
I'm busy working on my blog posts. Watch this space!
According to the IRS guidelines,all income derived from a foreign persons that conducts trade or business is regarded as Effectively Connected Income(ECI).
This should not be confused with Fixed,Determinable ,Annual ,Periodic Income (FDAP).
The FDAP refers to income that is fixed(you know the amount expected),determinable(in calculating or deriving the amount),annual and periodic,periodic meaning the periodic in receipt .
There are various items that fall under FDAP including rent.Thus a person recieving rental income is not regarded as ECI.
The difference in the two is that ECI is taxed at graduated rate while FDAP is at 30% although for FDAP,there is relief for tax treaty countries.
Another huge difference is that for FDAP is that deductions and netting to derive at taxable income is not allowed unlike in the case of ECI.
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