Does a foreign corporation have to pay any US taxes if it has a web server in the US?


Recently we are starting our business and need to create our website. Finally we decide to purchase virtual private surver provided by Bluehost, because it's way better than ones provided by asian companies. The revenue will all come from different asian countries. But one of our members mentioned that we may have to pay tax to US government becuase the website is located in US. Is that true? Any information will be greatly helpful.


asked Jul 25 '11 at 23:39
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11 points

1 Answer


My understanding of international tax law is that you would only be taxable in the United States if you had a Permanent Establishment in the US, that is, a fixed place of business in the US such as an office, a warehouse, a factory, etc.

My understanding is that the OECD has concluded that a website does not constitute a permanent establishment and thus if your sole presence in the United States was a web server, you would not be subject to US tax.

I am not a lawyer, and you may want to consult with one. The best way to get a definitive answer is to consult with a international tax expert at an accounting firm or law firm specializing in such matters.

answered Jul 26 '11 at 11:53
Joel Spolsky
13,482 points

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