# Self Employment overseas



## OpenSesame (Aug 14, 2013)

I'm a US citizen and currently live in the US. I've an S-corp for which I'm the sole employee and generate revenue by doing software services to another company. Now I'm planning to move out of the country (India) with family. I may be able to start a company in India and be on the payroll in that company while being a resident of India (live more than 183 days a year). My question is: Is it possible to still maintain the S-corp in the US (where the revenue is being generated) and probably get the salary transferred to the Indian company and get paid there? I know that I'll have declare Global Income and show it in 1040 IT return and I would be eligible to deduct up to $95150 when I pay taxes in India. What are other implications? Do I still have to pay Social Security Tax & Medicare Tax (both mine and company share, i.e., 15.3%) in the US.

From the S-corp perspective, what information do I provide to IRS or local city office in the US before making such arrangements?

Thanks a lot!


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## Bevdeforges (Nov 16, 2007)

Take a look at IRS Publication 54 for starters.

Under the section on self-employment tax, they state this:



> As a general rule, self-employed persons who are subject to dual taxation will only be covered by the social security system of the country where they reside.


I'm not sure if there is a social security treaty with India or not. But in general, if you set up your business in India so that you are paying into the Indian social security system (whatever that may be) you should be able to avoid paying US self-employment taxes.
Cheers,
Bev


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## OpenSesame (Aug 14, 2013)

Thanks Bev for your quick response!

US has dual taxation treaty with India where $95100 foreign earnings are exempted when the same tax is paid in India. However, India doesn't have any kind of Social Security setup for the tax to be deducted. 

So can I remove myself from my company payroll in the US and add to the payroll in the company I open in India?


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