International iOS Game App Dev US Tax

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Created May ’23

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Hello everyone, I would appreciate your guidance on the matter below;

So, we are a startup game studio in Korea who wish to launch an iOS game app thru the App Store in the US and some regions in Europe. Obviously we'll be paying tax in Korea once we receive payments after Apple's 15% cut.

Most of us lived and worked in the States back in the day to understand that there are Fed and State taxes to be paid separately in the States.

Our app will have in-app items for purchase, obviously, and we wish to generate revenue from it. My question is, other than Apple's 15% cut from the App Store (since it's a launch product and I'm sure I'll make less than 100K in the first year lol),

A. what other tax factors do I have to consider when my app gets released in the States?

B. Since it's a digital product that's been released in the States with no satellite offices, so States tax even matter? If so,

C. As far as I know California has 0% digital good tax including in-app purchases. Would it be a good idea to look into California for this? And last but not least,

D. What else could we be missing here?

I'd very much appreciate your insights and advices as I wish to launch my app properly and pay my dues where its necessary. Thank you for you time, guys.

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Answer 1

endecotp OP

May ’23

we are a startup game studio in Korea

Are you a business (i.e. "LLC", "Limited Company", etc.), or a partnership / group of friends with no legal business status?

Most of us lived and worked in the States back in the day to understand that there are Fed and State taxes to be paid separately in the States.

Not necessarily.

The U.S. has very unusual tax rules about its citizens having to pay US taxes even when they are permanently living/working abroad. If you are Korean citizens who have previously lived/worked in the US, does that apply to you? Or are you US citizens living in Korea? In any case, I would not expect the US to attempt to tax a Korean business with no US presence whose owners happen to have previously lived in the US. But I am far from an expert in this. You should probably talk to an international taxation expert. And make sure whoever you talk to actually is an expert in this specific subject! Don't rely on random people on the internet!

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Answer 2

Dev_korea OP

May ’23

Thanks for your reply,

We will be LLC with investments coming in starting next week. We are preparing all legal requirements to be a proper company capable of doing business outside of Korea.
Yes, I am a Korean citizen that has worked in the States previously and have my own SSN, however no EIN, as I was an employee and not an employer. And yes, I will be checking with my legals here but also wanted to know if I need to be aware of anything else other than what I have personally researched so far :) And yeah the US having (no offense) odd rules to their taxation gave me confusion almost in the last minute before we full throttle our app into the States and just wanted to make sure we have everything covered haha

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