How do I get Tax Residency Certificate

Hi, I'm not in Oregon so you'll need to speak to a local tax expert to verify the details but here is how it works: When you issue points you're creating a liability. You owe something to someone. It's like a gym which sells a one-year membership, they're only supposed to recognize 1/12 of the sale in the month it was sold. 11/12 of the money actually is a liability called 'deferred revenue.' As each month goes by, they reduce their liability by 1/12 and credit that money to income because now it is 'earned.' In your case you sell points to merchants (who give them to consumers) but most of the money collected is now owed to consumers to redeem their points. This is not income, you're just holding money owed to someone else. A small portion of the money, your gross margin on points sales, would be recognized as revenue and would have to cover your overheads and give you your profit, if any. So your balance sheet will keep growing in cash and an offsetting liability. Your income statement will only recognize the small margin which is your profit from selling the points to the merchants. I hope this helps make it more clear. With this type of business you may wish to investigate whether it makes sense from a liability point of view to hold the funds owed to consumers in a trust account rather than just 'floating' the points. I could see problems arising if you ever dipped into this cash pool to cover your own expenses while trying to argue to tax authorities that you're holding the cash for someone else. If you'd like to learn more about how merchants account for their own proprietary point systems, just book a call with me. I worked in the loyalty field for a few years. Cheers Dave

yes. As long as your main place of work is your home/office.

Yes you should be reporting the capital contributions. Under the old Form 5472 rules, it's true that only items that impacted taxable income would be reportable transactions. So, a capital contribution by you to the corporation would not be reportable, unless the equity contribution was somehow below or above a fair value contribution in exchange for services that you might provide for the corporation - essentially an imputed reportable transactions. When the IRS changed the Form 5472 rules to require non-U.S. owned single member LLC's, they expanded the reportable transaction definition to include virtually everything. The term “transaction” is defined in Treas. Regs. Section 1.482-1(i)(7) to include any sale, assignment, lease, license, loan, advance, contribution or other transfer of any interest in or a right to use any property or money, as well as the performance of any services for the benefit of, or on behalf of, another taxpayer. So, for example, contributions and distributions would be considered reportable transactions with respect to such entities. These amounts can be reported on Lines 12 and 25 with an explanatory footnote that clarities the amounts are capital contributions and not amounts that impact taxable income.

The income should be reported by the individual or business that provided the service and earned the income. If the 1099 is in your name, you could ask the issuing Company to change to the S-Corp if that is who earned the income. In the future, have a written agreement between your S-Corp and the Company you are providing service. Also, provide them with a Form W9, so they know where to report the 1099 income at year end.

First I'm lot a tax attorney or even know anything about Malaysian tax law. I'm however a person that has moved around a lot and have encounter this situation before. You will must likely have to declare your US income in your home country. However some local tax laws allow for a deduction of foreign tax paid at source. I have not found a US tax treaty between US and Malysia but you should contact a local tax attorney or the tax agency there and ask if they allow deductions or exemptions for foreign tax paid at source. If they do, you would declare your income and deduct the amount of tax already paid to the US. You may or may not still be liable for additional tax on that income. Again it depends on local tax rates and policies. It's never a good idea to hide income from your tax agency though.