It depends. When the business is set up and operating in the U.S. then there is effective connection without doubt. When we look at the example everything is taking place when the branch has been established in the U.S. Currently, there is no branch in the U.S. according to your earlier statements. Depending on whether your activity is equal to having a branch established in the U.S. will determine the decision.
26 CFR § 1.864-4 Example: (Dates were changed below)
M, a foreign corporation which uses the calendar year as the taxable year, is engaged in the business of manufacturing machine tools in a foreign country. It establishes a branch office in the United States during 2022 which solicits orders from customers in the United States for the machine tools manufactured by that corporation. All negotiations with respect to such sales are carried on in the United States. By reason of its activity in the United States M is engaged in business in the United States during 2022.The income or loss from sources within the United States from such sales during 2021 is treated as effectively connected for that year with the conduct of a business in the United States by M. Occasionally, during 2021 the customers in the United States write directly to the home office of M, and the home office makes sales directly to such customers without routing the transactions through its branch office in the United States. The income or loss from sources within the United States for 2021 from these occasional direct sales by the home office is also treated as effectively connected for that year with the conduct of a business in the United States by M
In reference to the social security taxes and whether your employer is required to pay those to the US please see the following.
The United States has entered into agreements, called Totalization Agreements, with several nations for the purpose of avoiding double taxation of income with respect to social security taxes. These agreements must be considered when determining whether any alien is subject to the U.S. Social Security/Medicare tax, or whether any U.S. citizen or resident alien is subject to the social security taxes of a foreign country.
- US International Social Security Agreements
- United Kingdom: If your employer sends you from one country to work for that employer or an affiliate in the other country for five years or less, you will continue to be covered by your home country and you will be exempt from coverage in the other country.
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