EU taxation of tax transparent entities (US LLCs, LLPs, NZ LTCs...)

[Jerry1911]

Let's make this thread a one stop shop on taxation of tax transparent entities outside of the countries of their registration.

So for example in case a Spanish tax resident owns 100% of a US LLC.

Germany:

LLC – Limited Liability Company and German taxation

There are good reasons to form a LLC in the USA. It combines preferable characteristics such as a far-reaching legal flexibility of the corporate structure with a limited liability of its shareholders. Beside this the shareholders can choose whether the …

scheller-international.com

Spain:

US and Spain enter mutual agreement on treatment of LLCs, disregarded entities, and Sub-S corporations under treaty and protocol — Orbitax Tax News & Alerts

The competent authorities of the United States and Spain have entered a mutual agreement on the treatment of limited liability companies (LLCs), disregarded entities, and Subchapter S corporations

www.orbitax.com

Portugal:

Treatment of US LLCs in Portugal - HTJ Tax

htj.tax

United Kingdom:

The Problematic Use of Transparent U.S. LLCs by Foreign Taxpayers

This item explores some common issues encountered by foreign taxpayers adopting transparent U.S. LLCs to invest or operate in the United States.

www.thetaxadviser.com

 

[SWinja]

I'm Spanish tax residents and own 100% of US LLC in Delaware. It's considered as disregarded entity. It will Not have US-connected income, so it would have 0% taxes.

Will I be needed to pay 25% corporate tax in Spain because it would be considered as spanish company?
Or, disregarded entities = sole proprietorship = sole traider and I just pay personal tax income in Spain?

 

[Bimblis]

There was a spanish guy, living in Spain, in Forocoches forum that talked for several pages about his US LLC. He only payed Income Tax (IRPF in spain). And did not paid Social Security Tax (he didn't pay Autonomos cuota). And had been duing this for 8 years or so (he was also a lawyer).

He didn't had either a SL or anything. He was just a normal citizen.

All the work was to save 350€ per month. His personal income tax was the same.

 

[Jade33]

Because a US LLC is considered a separate legal entity in Belgium, the Belgian tax administration will not tax any of the LLC’s earnings if they are reserved and not distributed to the owner. If the LLC does make a distribution, it is generally upheld that the Belgian resident owner is entitled to the US-BE tax treaty benefits. If the LLC’s earnings are taxable in the US, Belgium must exempt the income (under the ‘exemption with progression’ method). In the opposite situation, when the LLC’s earnings are considered taxable in Belgium, such earnings would be subject to the Belgian Income Tax for Non-Resident Companies. The Belgian resident owner will not be taxed individually on the earnings.

Still need to figure out whatis the tax rate for non resident countries though....

Taxed distributions from a single-member US LLC in Belgium

Find out all about taxed distributions from a single-member US Limited Liability Company (LLC) in Belgium. We can assist with analyzing the Belgian tax liability.

www.taxpatria.be