§00Classification · Glossary
Dependent Agent
A representative whose authority to bind the foreign principal creates U.S. taxing jurisdiction.
In full
A dependent agent is a representative — employee or contractor — whose habitual authority to conclude contracts on behalf of a foreign enterprise creates U.S. trade or business and potentially permanent establishment. The independent-vs-dependent agent distinction turns on legal and economic independence under the agency provisions of most U.S. tax treaties.
Governed by: Tax treaty agency rules.
This definition is general information about how the term is used in U.S. cross-border tax. It is not advice, and how it applies depends on your own facts and on the treaty, if any, in force with your country.
Related terms
- Effectively Connected IncomeIncome from a U.S. trade or business taxed at graduated rates after deductions, rather than the flat 30% FDAP withholding.
- Permanent EstablishmentA fixed place of business or dependent agent creating jurisdiction to tax under a bilateral tax treaty.
- U.S. Trade or BusinessThe factual threshold determining whether a foreign person's activities create a taxable U.S. presence.