elizabethmcbay[at]aol.com wrote:

- quote -

Social Security tax treaties may make it such that he has to
pay SE taxes in the country(ies) he works in, rather than to
the US. In any case, he needs to make sure he doesn't pay
SE taxes IN BOTH.

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elizabethmcbay[at]aol.com wrote:

- quote -

It depends upon whether there is a binational social
security agreement between the US and the country where he
works, and if subject to dual taxation its a temporary
assignment. These agreements eliminate dual coverage and
dual taxation. Most of these agreements are with western
european countries. The following countries have an
agreement:
Australia, Italy, Austria, Luxembourg, Belgium, Canada,
Norway, Netherlands, Chile, Portugal, Finland, France,
South Korea, Spain, Germany, Sweden, Greece, Switzerland,
Ireland, United Kingdom
Detail info and text of the treaties is at:
http://www.ssa.gov/international/
Other than this exemption, he would be subject to
self-employment tax.

--
Alan
http://taxtopics.net

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elizabethmcbay[at]aol.com wrote:

- quote -

As described, the answer is, "Yes." He probably qualifies
for the Foreign Earned Income Exclusion and, if he pays any
European taxes, the Foreign Tax Credit. This does not
excuse him from paying self-employment tax, though.

He should structure his operations so that he works for a
foreign entity, even if he is the owner of the foreign
company. The manufacturers he represents should pay the
company, not him. Any salary or commissions he is paid by
the company would then be paid by a foreign entity and are
not subject to self-employment tax.

He needs to be sure he complies with any local requirements
as to his salary and local taxes.

I always advise my clients to form a foreign company and to
draw a salary from that organization. Makes things much
simpler all around.

Lanny Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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Client, U.S. Citizen with an E.U. passport, relocated to
Europe to be the representative for four U.S. manfacturers.
He is paid on straight commission and is treated as an
independent contractor.

Does he have to pay self-employment tax?

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