Can a Foreign Tech Company be Subject to U.S. Tax on Internet-Related                                        Income by Utilizing U.S. Servers?

Can a Foreign Tech Company be Subject to U.S. Tax on Internet-Related Income by Utilizing U.S. Servers?

Tax Law
 By Anthony Diosdi The U.S. source rules in general derive from an attempt to identify the geographic locus of the economic activity or financial arrangements that generate income. The source rules play a prominent role in the taxation of foreign persons, since they effectively define the boundaries of U.S. taxation. The source rules for gross income are organized by categories of income, such as interest, dividends, personal services income, rentals, royalties, and gains from the disposition of property. The rapid evolution of electronic commerce and the internet has generated many difficult conceptual issues such as how to source a foreign person’s business activities undertaken on the internet that affect the U.S. economy. The U.S. source rules provide that the source of rental and royalty income is determined by the place…
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