Are Foreigners Starting A Business In USA Tax Exempt?

Question from a reader:

Is a foreigner doing a business in USA tax exempt?

Answer:

I am not a tax attorney. But I don't think US government offers such type of incentives like the Chinese government often does. Also, the tax law treats some non-citizens as US people for purpose of tax.

One thing I can think of is the foreign tax credit based on the tax treaties. The tax treaties are country-specific and it is hard to generalize the terms. Nevertheless, the tax credits based on the tax treaties are generally designed to avoid double taxation (as opposed to extending special benefits). Nevertheless, by using the tax credit effectively, one may achieve the goal of saving $$.

Hope this helps for people not familiar with foreigner tax issues.

Answer provided by Qingqing Miao
Ellis, Li & McKinstry PLLC