Tax liable - all crews flying to the US?
Join Date: Jan 2008
Location: timbuktu
Posts: 1
Likes: 0
Received 0 Likes
on
0 Posts
There is another thread on this subject, which has not attracted many posts. So I'll repost here what I posted there, with a few modifications:
Aircrew are often exempted under various double taxation treaties. For example, the US-UK double taxation treaty exempts UK-based aircrew from US tax.
This is covered in Article 14, paragraph 3 of the US-UK treaty.
https://www.gov.uk/government/public...a-tax-treaties
For some reason, Hong Kong has no double taxation treaty with the USA, even though it has treaties with many other countries.
You can be taxed pro-rata on how much working time you spend in country, as a non-resident.
See Chapter 3 of The US Tax Guide for Aliens, Publication No. 519 of the IRS (" Services Performed
for Foreign Employer"). Income up to $3,000 per annum is exempted but thereafter income earned while in the US is taxable.
https://www.irs.gov/pub/irs-pdf/p519.pdf
Aircrew are often exempted under various double taxation treaties. For example, the US-UK double taxation treaty exempts UK-based aircrew from US tax.
This is covered in Article 14, paragraph 3 of the US-UK treaty.
https://www.gov.uk/government/public...a-tax-treaties
For some reason, Hong Kong has no double taxation treaty with the USA, even though it has treaties with many other countries.
You can be taxed pro-rata on how much working time you spend in country, as a non-resident.
See Chapter 3 of The US Tax Guide for Aliens, Publication No. 519 of the IRS (" Services Performed
for Foreign Employer"). Income up to $3,000 per annum is exempted but thereafter income earned while in the US is taxable.
https://www.irs.gov/pub/irs-pdf/p519.pdf
Last edited by marchino61; 17th Dec 2019 at 09:11. Reason: Fixed typo
1 An employer cant dictate who files tax returns. That is a matter for legislation, and in this case the IRS
2 You are only taxed on your worldwide income if you are tax resident - in the US that means a citizen, a green card holder or if you spend over 120 days a year in the US or its territories (but the calculation is based over 4 years on a sliding scale)
3 Many countries, eg the UK, have special rules for seamen or people working on ships and some have extended this to other forms of transportation
4 The US will tax you on income earned in the US. For example if you are paid for consultative work by a US company. This is regardless of residency or time in the country. If there is a double taxation treaty with your country of residence, you can claim relief from tax on that amount in your own country but only if the same money would be taxed in your country and to the amount of tax you would have paid
So your employer is irrelevant. If you are not US tax resident you dont pay tax UNLESS the IRS has changed their interpretation of the tax code or the tax code has been changed by Congress. It would be sensible to seek advice whether this has happened from a US CPA as opposed to taking advice, including mine, on Pprune
2 You are only taxed on your worldwide income if you are tax resident - in the US that means a citizen, a green card holder or if you spend over 120 days a year in the US or its territories (but the calculation is based over 4 years on a sliding scale)
3 Many countries, eg the UK, have special rules for seamen or people working on ships and some have extended this to other forms of transportation
4 The US will tax you on income earned in the US. For example if you are paid for consultative work by a US company. This is regardless of residency or time in the country. If there is a double taxation treaty with your country of residence, you can claim relief from tax on that amount in your own country but only if the same money would be taxed in your country and to the amount of tax you would have paid
So your employer is irrelevant. If you are not US tax resident you dont pay tax UNLESS the IRS has changed their interpretation of the tax code or the tax code has been changed by Congress. It would be sensible to seek advice whether this has happened from a US CPA as opposed to taking advice, including mine, on Pprune
Thread Starter
Join Date: Feb 2002
Location: -
Posts: 174
Likes: 0
Received 0 Likes
on
0 Posts
Advised by whom? Was it an official letter? Was it a public announcement? If not, it's likely a bad joke, and I suggest you find the source. Meanwhile, the best way is to ask a direct question. NOT here. If you don't have a union representative, contact the company by sending an official inquiry to the Chief Financial Officer or General Counsel, or both. Their email addresses should be on the website. If it's official, they'll confirm it. If not, they'll rebut it. But in any case, they'll know there is a problem and they need to exaplain it to their people.
Personally, I think it's a bunch of crap.
Personally, I think it's a bunch of crap.
I am just curious whether or not any other non-US long haul airline has asked its pilots to start declaring tax in the US.
I agree it's insane, but then ... it's Cathay. They have been excelling at this for decades.
Join Date: Jun 2019
Location: Tana
Posts: 0
Likes: 0
Received 0 Likes
on
0 Posts
US does tax foreign individuals but only if they spend certain amount of time in the US or participate in the US economy, neither of which is your case. Besides, US tax laws clearly state that any foreigner who has already paid taxes in his own country will have that sum deducted from his taxes due in the US. And I've never heard of any foreign airline employees having to pay taxes in the US. Or anywhere for that matter, other than their country of residence. They cannot be considered residents because they come on a D-1 or D-2 visa.
Join Date: Aug 2007
Location: Mile High, Colorado
Age: 38
Posts: 44
Likes: 0
Received 0 Likes
on
0 Posts
Clarification
I’m sorry to hear your company has decided to pursue this delusional venture.
As an American who used to fly abroad and has a non-citizen spouse, let me offer y’all some clarification and hopefully quell any fear you have...
Unless you are a US Citizen, Green Card Holder, or have a work visa (not a B1/B2 & Crew Visa), you do not owe US Taxes. Period. Work Visa residing the in the United States that is.
You first have to apply for a tax ID number (ITIN) by filing a W7. This will require you to MAIL IN your passport to the IRS office (copies will not be accepted). This is literally impossible for your line of work given you require your passport for day to day use and the turnover time (if the IRS doesn’t lose your passport in the process) is seven weeks.
Your company will lose this battle. Ignore the threat. There’s literally no company in the world pursuing this venture as it is entirely asinine and has zero precedence.
Now, I’m sure the IRS would gladly accept donations, but please move forward.
As an American who used to fly abroad and has a non-citizen spouse, let me offer y’all some clarification and hopefully quell any fear you have...
Unless you are a US Citizen, Green Card Holder, or have a work visa (not a B1/B2 & Crew Visa), you do not owe US Taxes. Period. Work Visa residing the in the United States that is.
You first have to apply for a tax ID number (ITIN) by filing a W7. This will require you to MAIL IN your passport to the IRS office (copies will not be accepted). This is literally impossible for your line of work given you require your passport for day to day use and the turnover time (if the IRS doesn’t lose your passport in the process) is seven weeks.
Your company will lose this battle. Ignore the threat. There’s literally no company in the world pursuing this venture as it is entirely asinine and has zero precedence.
Now, I’m sure the IRS would gladly accept donations, but please move forward.
Join Date: Jun 2001
Location: Rockytop, Tennessee, USA
Posts: 5,898
Likes: 0
Received 1 Like
on
1 Post
As I observed earlier:
_________________________________
_________________________________
As Airbubba says, these are both incredibly naive assumptions. The first is completely wrong (I was paid for several years in the UK but taxed in HK, for example). And the second assumes a comprehensive avoidance of double taxation agreement between the jurisdictions concerned (which is far from a given), and your citizenship not being one that taxes on that basis rather than on residence.
If you are not US tax resident you dont pay tax UNLESS the IRS has changed their interpretation of the tax code or the tax code has been changed by Congress. It would be sensible to seek advice whether this has happened from a US CPA as opposed to taking advice, including mine, on Pprune
Originally Posted by Harry Callahan
You've got to ask yourself one question: 'Do I feel lucky?' Well do ya, punk?
I can understand Cathay Pacific's (and other employers') position in this subject. The US IRS has a habit of chasing every last nickel they are entitled to. In addition, they have a (unwritten) policy of coming down VERY hard on companies that side with their employees against the IRS. Their position seems reasonable from a corporate point of view. Employees who earn money while in the USA need to fill out US tax forms for that income. In doing so, you will be given the opportunity to claim a credit for foreign income taxes paid (you DID pay your HK income taxes, I assume). The end result is that the credit will most likely zero out your US tax liability.
Join Date: Mar 2015
Location: Washington state
Posts: 209
Likes: 0
Received 0 Likes
on
0 Posts
Since only the hours that you are paid for working in the United States count (I presume!) the amounts taxed by the US must be quite small. The standard deduction is $18,000.
If you are liable for those taxes on such a small income, then I would presume that you would also be eligible for low income assistance such as welfare and food stamps...
If you are liable for those taxes on such a small income, then I would presume that you would also be eligible for low income assistance such as welfare and food stamps...
Join Date: Feb 2012
Location: Kopavogur
Posts: 26
Likes: 0
Received 0 Likes
on
0 Posts
Hahaha,
what a joke.
Why would anyone, not linked to the USA , start paying tax to them and not see any benefit ?!
The IRS can kiss my hairy European Butt, and I can guarantee that NOBODY in my airline will even think about paying the US taxman even a dime for the time we spend on layover or overflying the USA.
I fly to over 50 countries a year. Imagine the tax I would have to pay if every country would he so moronic.
what about businessmen going for a meeting in the US? Would every person visiting the USA for business now have to file a tax return? Indeed, impossible and totally retarded.
if they insist, we will just refuse to operate any US-bound flight.
I strongly suggest CX crew to do the same.
what a joke.
Why would anyone, not linked to the USA , start paying tax to them and not see any benefit ?!
The IRS can kiss my hairy European Butt, and I can guarantee that NOBODY in my airline will even think about paying the US taxman even a dime for the time we spend on layover or overflying the USA.
I fly to over 50 countries a year. Imagine the tax I would have to pay if every country would he so moronic.
what about businessmen going for a meeting in the US? Would every person visiting the USA for business now have to file a tax return? Indeed, impossible and totally retarded.
if they insist, we will just refuse to operate any US-bound flight.
I strongly suggest CX crew to do the same.
Join Date: Mar 2015
Location: Washington state
Posts: 209
Likes: 0
Received 0 Likes
on
0 Posts
Here is a link to an IRS pub that might shed some light on the subject. As a practical matter, if you reside in a country where the IRS would have any chance of collecting on US taxes, you probably have a tax treaty with the US that is reasonable. British subjects after Brexit, well, whatever...
Substantial Presence Test You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for calendar year 2018. To meet this test, you must be physically present in the United States on at least: 1. 31 days during 2018, and 2. 183 days during the 3-year period that includes 2018, 2017, and 2016, counting: a. All the days you were present in 2018, and b. 1/3 of the days you were present in 2017, and c. 1/6 of the days you were present in 2016.
Even if you meet the substantial presence test, you can be treated as a nonresident alien if you: • Are present in the United States for less than 183 days during the year, • Maintain a tax home in a foreign country during the year, and • Have a closer connection during the year to one foreign country in which you have a tax home than to the United States (unless you have a closer connection to two foreign countries, discussed next).
