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A worker from Philippines have to pay US taxes?

Discussion in 'Business & Tax Advice' started by Viltedali, Feb 15, 2011.

  1. Viltedali

    Viltedali Regular Member

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    If a person from the Philippines does steady coding work for a person in the US, will they have to pay US taxes on their earnings coming from the person in the US?

    I think that a 1099 form would need to be filed, just wondering if taxes would have to be paid.
     
  2. xboxps3wow

    xboxps3wow Power Member

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    I doubt it, but the person in US won't be able to claim the worker
    (i don't have any experience with this, so im just guessing)
     
  3. BorisTipsIt

    BorisTipsIt Regular Member

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    Don't know how. The worker in the Philippines doesn't have a social security number with the IRS, so can't see how it would be reported. The US company or business paying for the work might be required to withhold the tax, but that's the only way I could see it happening.
     
  4. lexblast

    lexblast Junior Member

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    Phillipines worker is in the clear and couldn't possible be expected to pay or be penalized if he didn't but I am sure the US corp is responsible for all withholding, etc.

    probably a few extra hoops your company has to jump through for outsourcing like this.
     
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  5. ExtraWinner

    ExtraWinner BANNED BANNED

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    US government cannot ask people from other countries to pay taxes to them. They have NO jurisdiction there.

    Only countries that have tax agreement (US-Canada, European Union) can ask for taxes to be paid for service sold on their territory (without double taxation ofc).

    Good Luck!
     
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  6. Jorod

    Jorod BANNED BANNED

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    I dont think people in the US would pay the taxes in the Philippines if the situation was reverse.

    I think just pay your own Country is the rule for the world.
     
  7. Viltedali

    Viltedali Regular Member

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    So, I'd have to pay for having him do work? I mean, if I paid him $5000 over the course of the year, I'd be responsible for paying taxes on that, as I imagine I can't just mark the $ paid to him as an expense, rather than doing a 1099?
     
  8. bertbaby

    bertbaby Elite Member

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    Are you talking about payroll taxes?
     
  9. nanavlad

    nanavlad Jr. VIP Jr. VIP Premium Member

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    The worker is required to pay his taxes in the country he is residing in.
    So no he wont pay any taxes to the US gov.
    The US company has no right to withold taxes from a person residing in another country, unless he is a US citizen, whereby he would be responsible for paying his own taxes,

    The company or person hiring a worker in a foreign country , just needs an invoice for the payments made, He can then put this down as business expense,
    So there is no taxes to be paid in the US on this money.

    Hope this helps
     
  10. DenRomano

    DenRomano Newbie

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    nanavlad is correct.
     
  11. Markbh

    Markbh Regular Member

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    The Person from the Philippines would be taken care of by their own government, coming after their taxes. You just need the invoice from them, showing that you are getting either a service or a product from them.
     
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  12. ExtraWinner

    ExtraWinner BANNED BANNED

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    We are on BH forum and you wonder if your contractor from Philippines should pay his taxes in US or You should pay taxes for him...


    Common Man...
     
  13. Viltedali

    Viltedali Regular Member

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    Yes.


    I suppose, but if I keep my nose to the grindstone, maybe one day I'll be a mastermind like yourself.:)
     
  14. clyde

    clyde Elite Member

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    No, they pay taxes in the PH, not US.
     
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  15. cookie48

    cookie48 Jr. VIP Jr. VIP Premium Member

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    You pay taxes where you are a tax resident.
     
  16. Shaw33

    Shaw33 Newbie

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    The person in the Philippines would not have to pay US taxes, only in their own country. You need to deduct from your taxes what you paid them. Look up the rules for foreign contractors. I would have them invoice you for their pay and thus you have a good solid record for your taxes and can deduct that money in the proper way when you file your taxes.
     
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