Non-resident Aliens And Foreign Corporation Transactions Of E-commerce

Non-resident aliens and foreign corporations are generally only subject to tax on their U.S. source income, including income derived from the performance of personal services in the United States, and certain foreign source income that is attributable to a U.S. trade or business. Unless a treaty applies, non-resident aliens and foreign corporations are taxed at ordinary graduated rates on their net income effectively connected with a trade or business in the United States. Thus, such foreign persons do not become subject to U.S. tax on their business income from e-commerce, unless such income arises from a U.S. source and that source is a U.S. trade or business. On the contrary, a foreign person's U.S.-source non-business income is taxable in the United States, regardless of whether the foreign person is engaged in a trade or business in the United States.

The following questions have been addressed in this article:

What is the concept of U.S. trade or business in the context of E-Commerce?
How would a U.S. trade or business arise by imputation of telecommunications and Internet service providers?

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