Loading...
Answers
MenuAre there any taxes in the USA for outsourcing software projects?
Are there any taxes US companies/citizen has to pay if their software development projects are outsourced to India?
How it can be avoided?
Answers
Generally, no. If you're a U.S. based company, you may outsource the development of your software development projects, or the creation of your intangible property. Payments made to non U.S. persons or companies that are performing the work outside of the U.S., should provide you a Form W-8BEN or W-8BEN-E to evidence their non U.S. tax status. If you don't collect this withholding certificate, you may be obligated to withholding taxes on the gross amount of payments submitted to the India company for their services.
Taxes are paid on income.
Your question seems related to cost of development, which is an expense.
So you'll write off expenses, not pay taxes on expenses.
Note: If you're a US citizen you'll pay tax on world wide income.
Tip: Better to always double check with your Tax Person about tax questions... as making long term business choices to optimize taxes... if done incorrectly... can be very costly...
There are no direct tax implications if you pay a US company or a foreign company. There are no tariffs yet for services. However you do not get a W9 from foreign companies. So if you ever get audited, you have to prove it was indeed legit transaction. Most quality Indian software companies have US subsidiary. So you can pay the US company instead of a foreign company.ad of a foreign company.
Outsourcing is a way that enables enterprise companies to share any types of business operations with external vendors or offshore outsourcing companies. The benefits of these outsourcing solutions can be either long-term or short-term. The major advantage of outsourcing to an offshore company is that you will get your job done at an affordable rate with high quality. It helps you to focus on major activities of your company and it can improve the management skills and productivity of your firm. Tax Implications in the USA for outsourcing work overseas from the U. based company, you are free to outsource any services that include the creation of your Non-Physical Assets, or development of your software projects. However, certain implications must be taken into consideration before outsourcing any software development projects. In case of not collecting this withholding certificate, you may be compelled to withholding taxes on the gross number of payments imposed by the company for their services.
You can read more here: https://www.armia.com/blog/any-extra-taxes-for-outsourcing-software-projects/
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath
Related Questions
-
How should the dynamic between a ux designer and a developer who are working together look like?
It depends a lot of in the skill sets and experience of both people but in most cases the ux designer should be controlling the developer pretty heavily in order to make sure his ideas come through properly. The UX designer may just need to work on his approach so people don't feel bossed around and more like they are working together. In an ideal world, there would be a project manager who makes sure everything is communicated well and keeps the dynamic feeling great.JM
-
What would be a good approach for marketing a software development businesses?
For software development business LinkedIn ads, content marketing and Google Adwords don't work well. The best and most cost effective method is email outreach. Try to find the contacts of key decision makers in Bay Area from your target companies. You want to present yourselves as custom mobile and web development specialists and highlight your core competencies to get an initial call to discuss their mobile strategy or software development needs. Attaching your case studies how you helped other similar businesses and your portfolio can be extremely helpful as well. Try to always focus on the benefits in you pitch that they can get by working with you and point their missed opportunities of not having certain types of software or apps for their business. Clients love that software development companies have not only strong execution but also ideation skills. Hope this helps. If you have any questions I am also available on call for your convenience.AA
-
What's the best way to build a MVP web app that handles order management, purchasing, invoicing, supplier management and inventory?
The best way to build an MVP for any SaaS product is to create a landing page that looks like a real product. Here's an example of one I built. http://www.happiily.com In this case, it advertises the primary features of the product and invites people to sign-up. When they do, they are asked for information which qualifies the person and then sends me an email. I built this quickly and very inexpensively and started getting inbound leads from it shortly thereafter. I got on the phone with each person who signed-up and explained the features I wanted to build and was able to do a lot of customer learning based on that. Happy to talk to you in a call if you'd like to talk more about customer development with SaaS products.TW
-
How do I run a successful closed beta for my web application that is almost done with development?
Create an ideal customer profile. Create some questions that will allow to you survey a potential tester to determine if they fit your profile. Design simple landing page with very clear value proposition that speaks to your ideal customer. Ask for a minimum of information up-front (email), but ask for more info after they commit by submitting the first piece of info. (KISSmetrics does a good job of this on their current website trial signup). Use the their answers to these profiling questions to put the applicants into buckets. Let in the most ideal bucket first, or split them into groups if they're big enough. Try and measure engagement the best you can. Measure qualitative and quantitative data. Schedule calls with your beta testers to find out more, especially with the ones who's user behavior seemed to indicate that they didn't get value from your product. Find out why. Make sure they are indeed your ideal customer. Pick up the phone and get to know your customers inside and out. Meet them in person if possible. Incorporate their feedback quickly and get more feedback. Rinse repeat.DH
-
I have a great app idea, and I need help bringing it to life.
I'm not sure if this is how you imagine this world to work, but at least according to the order you wrote it "raising funds" was first. In reality it should actually be one of your final steps of the stage you are at right now. It may even come after a year or two! So you have this great app idea, and you're looking for a place to start... Don't! Don't start yet before you decide whether you have what it takes to get into a roller coaster that can ruin your life and make you miserable! Not trying to scare you but I think most people only hear about these great success stories. They have this dream of maybe, possibly, becoming the next big thing... Because they have the best idea for an app... You don't hear about the failures so often. And even if you do, you don't hear about what the founders of these failing startups had to go through. Truth is you are most likely gonna fail. And I'm saying that without even knowing what your idea is. There are so many barriers on your way that even a great product with a great team is likely to fail. Some people would say "I'm not afraid of failing", "It's good to fail cause you learn", "Failing will make me stronger for the next startup". That's somewhat true but it doesn't mean that failing is easy. As oppose to what people sometimes say - you do not want to fail! It's very painful!!! You have to understand what failing in a startup means. You can work your a$s for 2-3 years, have little to no salary, waste other people's money (most likely your friends and family first), lose friends, fight with your partners, your family, your spouse, devote 20 hours a day for your startup all this time, forget about the little and big things you used to enjoy in life, and only then, after debating 100 times whether you should quit or not, you finally decide that it's not gonna work and you've failed. Disappointing your family, your investors, yourself. Trust me it is painful. Are you sure you wanna do this to yourself? If yes, give me a call. I have the experience you need! From idea stage, to proof of concept, to running beta tests, getting millions of millions of users in ways you can't even imagine, creating features and experience that will make these millions of users completely addicted and viral, raise money in a smart way, hire the right people, find a great co-founder, succeed, fail, be persistent, and enjoy the ride! Good luck, RoyRM
the startups.com platform
Copyright © 2025 Startups.com. All rights reserved.