We are in the process of creating an online business that primarily resales consumer goods to China. In our example, online business means that 1) our own website for consumers to purchase goods on 2) on Amazon. What tax regulations would we be subject to in the US and China that we should be aware of?
Your questions require some very specific legal information that are likely to require research by an attorney, meaning you are not likely to get the answer you need here on Avvo. I recommend doing a search for an attorney or firm in your area who specializes in tax law and/or international law. Someone experienced with internet law would be helpful as well.
Good question: many businesses are clueless about the tax impacts of foreign sales. By asking the right questions now, you can almost always structure your corporate setup to reduce tax burdens and risks.
A US - China reseller will have to consider tax impact both in China and the US. Taxes such as: income tax, sales tax, foreign withholding tax, and revenue tax may apply. Such a business will almost always need to consider, analyze, and implement a relatively simple transfer pricing strategy to reduce tax burden and compliance risk. Again, you'll want to consider these kinds of taxes on both sides of the border.
Finally, such a business may want to consider using a corporate entity in a third-party country to reduce taxes and legal liability. A little time, effort, and cost on this kind of structure can pay off big time going forward.
This kind of global and comparative approach to international business law is the kind of work our firm does for clients. In the end, it would make sense to hire someone to help you sort these issues out based on your specific situation.
Portage Bay Law PLLC is an international law firm that give companies doing global business the knowledge and confidence they need to comply in any country. Our answers on this site do not constitute legal advice, nor do they establish an attorney-client relationship. The only thing that can do that is a signed Engagement Letter and Fee Agreement, which you can get by contacting us through www.portagebaylaw.com.