QUESTION
What are legal and tax implications owning jointly developed software with offshore vendor, maitaining P&L is USA?
Asked on Sep 27th, 2012 on Business Law - New Jersey
More details to this question:
we are developing software application in collabaration with our offhsore business vendor to save initial cost and risk to invesment. based on P&L, offshore will recieve profit or loss statement, do we need to deduct US taxes before disburshing profit money to offshore business pertner (vendor)? they have no office and location in US but developed the software with our (US company) deisgn.
1. offshore vendor have no equity in US based S-corp company but software is jointly own by vendor with less than 50% ownership. do we need to deduct US taxes?
1 ANSWER
Reviews not shown
1 Award
As a general matter, you do not need to deduct payments for U.S. taxes to a vendor who performs services for you overseas. There are a variety of difficult business issues that come about as a result of your ownership structure and that might arise in the event of a future dispute over intellectual property rights. I fear that you have not properly documented your relationship with your vendor from this standpoint. You will wish to address this issue with your own attorney.
Answered on Sep 30th, 2012 at 8:21 AM