Tax & CompliancePublished Feb 5, 20278 min read
What is ETBUS? How Non-US Founders Pay 0% US Federal Income Tax Legally
A deep dive into IRS Section 864, Effectively Connected Income (ECI), and why selling digital services to US clients does NOT trigger US taxes.
Understanding the Legal Framework
Many foreign entrepreneurs fear getting double-taxed by the IRS when invoicing American clients. Under US tax law, you are only subject to US income tax if you have physical operations (dependent agents or fixed offices) on US soil.
Key Takeaway
Operating your SaaS or agency remotely from your home country qualifies for complete 0% US federal tax pass-through status.
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