Income Tax for Remote Consultants

[rsbakshi]

We are planning to hire a consultant from India. He is going to work from India only. He would like to have his salary to be deposited in his bank account (Indian) before Tax. He doesn't want to pay tax in US as he is not working in China. He will declare his Income tax in India himself. He is ready to provide the Income tax returns and other authorized papers as well.

Here is the question: As an US company, how can we pay him every month without deducting the taxes? Also, How to enter the salary amount in Accounts which is getting audited in United States?

[immihelp]

You can pay on an independent contractor basis.

Just like you pay on 1099 basis for the persons located in the U.S.

[Jeff4cpa]

The Admin is correct

Here's why. The definition of an employee for foreign persons is a matter for the jurisdiction the employee works in. So the classification (employee/independent contractor) of your person in India is determined by the rules of India. For U.S. accounting, you may classify his expenses as outside services. For auditing purposes, he should submit invoices showing the work performed and payment expected.

[rsbakshi]

Thanks,

Really appreciate the help.