USA LLC + Belgium Freelancer

[sarko]

Hello everyone, I am thinking of a setup to maybe lower some taxes. Not sure if this is correct so please correct me.

Would have

- USA LLC owned by foundation for anonimity
- Invoice the USA LLC let's say a 2000 euros per month for my freelance activity here in belgium, just for my personal needs.
- Have the rest of the money stay in the bank of USA LLC. If the gains are not distributed, they are not taxable as per Belgium's laws on LLCs.
- Don't necessarily need to spend it or have access to it.

Now in my head this makes sense but first of all there might be some problems with that. Second of all, as of now my payment processor is Stripe, which only accepts european IBANS as payout. I would need it to payout to my LLC's bank account.
Any clue as to how to achieve that?

Thanks in advance.

 

[JustAnotherNomad]

Hope you are aware that that is illegal and comes with a very high risk of being caught.

 

[Marzio]

there might be some problems with that

The same problems that will face your avatar.

 

[Sols]

- USA LLC owned by foundation for anonimity

It's going to be an extremely unattractive proposition for most banks.

- Have the rest of the money stay in the bank of USA LLC. If the gains are not distributed, they are not taxable as per Belgium's laws on LLCs.

That's correct only if the US LLC isn't tax resident and doesn't have a PE in Belgium. If it does, it's essentially a Belgian company for tax purposes.

- Don't necessarily need to spend it or have access to it.

That's good because you risk never seeing the money again if the tax authority comes for you.

Now in my head this makes sense but first of all there might be some problems with that. Second of all, as of now my payment processor is Stripe, which only accepts european IBANS as payout. I would need it to payout to my LLC's bank account.
Any clue as to how to achieve that?

You're talking about setting up a US company, right? In that case, you sign up with Stripe in the US and they will do payouts to our US bank account.

 

[sarko]

It's going to be an extremely unattractive proposition for most banks.


That's correct only if the US LLC isn't tax resident and doesn't have a PE in Belgium. If it does, it's essentially a Belgian company for tax purposes.


That's good because you risk never seeing the money again if the tax authority comes for you.


You're talking about setting up a US company, right? In that case, you sign up with Stripe in the US and they will do payouts to our US bank account.

We don't have a PE in Belgium. Also what do you mean by 'US LLC isn't a tax resident' ? As for Stripe, I have heard that Stripe USA does not accept US LLCs unless you can provide a SSN, which I don't have.

 

[Sols]

We don't have a PE in Belgium.

Belgium - Corporate - Corporate residence

Detailed description of corporate residence rules in Belgium

taxsummaries.pwc.com

A company is a resident of Belgium for tax purposes if it has its principal place of business or its seat of management in Belgium. The seat of management has been defined by Belgian case law as the place from where directing impulsions emanate or the place where the company's effective management and central administration abide, meaning the place where the corporate decision-making process actually takes place.

The foundation probably won't help, because a Belgian court would just ask under whose direction the foundation operates. Belgian tax law is a mess, though, and can be difficult to enforce and predict.

Also what do you mean by 'US LLC isn't a tax resident' ?

The US LLC is probably tax resident in Belgium. There is probably no difference between your US LLC and just forming a local company in Belgium for tax purposes. So any exemptions for foreign dividends/income, for example, might not apply.

As for Stripe, I have heard that Stripe USA does not accept US LLCs unless you can provide a SSN, which I don't have.

I believe they accept ITIN for natural persons and EIN for companies, but this is something you'll have to look into. Stripe Europe can't open a merchant account for a US company.

 

[Alonzo]

Hope you are aware that that is illegal and comes with a very high risk of being caught.

He probably hasn't heard about the Cayman tax. Wait till he gets caught

 

[Mike Forman]

He probably hasn't heard about the Cayman tax. Wait till he gets caught

Belgian tax authorities can now go back 10 years, so the chance you will get caught in the next 10 years are realistic. If you can't pay the tax bill when caught (which will be easily double of your revenue through the LLC with all taxes, fines, interest and legal costs) all your assets will be confiscated and any euro you earn above minimum income from your future income.

I would think twice about this

 

[sarko]

Belgian tax authorities can now go back 10 years, so the chance you will get caught in the next 10 years are realistic. If you can't pay the tax bill when caught (which will be easily double of your revenue through the LLC with all taxes, fines, interest and legal costs) all your assets will be confiscated and any euro you earn above minimum income from your future income.

I would think twice about this

I had understood it was a grey area but not that bad lol. As someone said I don’t want have the same fate as my pfp.

Does anyone know how I could possibly lower taxes as an independant in Belgium (without moving tax residence) ? Income tax is 50%, and social security is super high too

 

[Sols]

Does anyone know how I could possibly lower taxes as an independant in Belgium (without moving tax residence) ? Income tax is 50%, and social security is super high too

There's not much you can do if you're on your own. Any overseas company you form is going to become tax resident in Belgium.

Speak with a Belgian accountant/tax adviser to make sure you're optimizing deductions and various incentives that may be available. Aside from that, the taxes you pay is the price of living in Belgium. If you don't like it and assuming you have an EU passport, you have for example Malta and Cyprus available for quick and easy relocation, and drastic tax savings.

 

[Marzio]

Does anyone know how I could possibly lower taxes as an independant in Belgium (without moving tax residence)

Take a look at the innovation income deduction, it's the only way to reduce Belgian taxation legally to <4% but you have some qualifying IP.

 

[JustAnotherNomad]

Look at this thread:

Best subsidiary location with substance for a Belgian company

I live and work in Belgium. I want to open a company in a low tax jurisdiction to decrease the tax bill of our Belgian operating company. My business partner and I are currently not considering to leave Belgium. Goal My main goal is to save money on the companies tax bill in Belgium in a cost...

www.offshorecorptalk.com

Depending on what you do, you may be able to set up a subsidiary in a lower-tax country.
Then you can run some parts of your operations through that subsidiary and pay taxes there instead of Belgium. It must be very well-planned, however, and you will need substance (local office, employees with realistic salaries) for that to work.
It's important that you work with a good advisor in Belgium since there are many rules to navigate (economic substance, transfer pricing etc.). If you make a mistake, you risk having to pay the full taxes like for a Belgian company.

 

[bru1234]

Hello everyone, I am thinking of a setup to maybe lower some taxes. Not sure if this is correct so please correct me.

Would have

- USA LLC owned by foundation for anonimity
- Invoice the USA LLC let's say a 2000 euros per month for my freelance activity here in belgium, just for my personal needs.
- Have the rest of the money stay in the bank of USA LLC. If the gains are not distributed, they are not taxable as per Belgium's laws on LLCs.
- Don't necessarily need to spend it or have access to it.

Now in my head this makes sense but first of all there might be some problems with that. Second of all, as of now my payment processor is Stripe, which only accepts european IBANS as payout. I would need it to payout to my LLC's bank account.
Any clue as to how to achieve that?

Thanks in advance.

LLC are ^pass-through as far as i know. Moreover your activity are in Belgium so you cannot chose to let the money in LLC. It will be considered as belgian activity and subject to belgian taxes.

We don't have a PE in Belgium. Also what do you mean by 'US LLC isn't a tax resident' ? As for Stripe, I have heard that Stripe USA does not accept US LLCs unless you can provide a SSN, which I don't have.

if you are belgian working in belgium, you are permanent establishment in Belgium as per Belgian laws

I had understood it was a grey area but not that bad lol. As someone said I don’t want have the same fate as my pfp.

Does anyone know how I could possibly lower taxes as an independant in Belgium (without moving tax residence) ? Income tax is 50%, and social security is super high too

Luxembourg is a little bit cheaper but not that much...

Look at this thread:

Best subsidiary location with substance for a Belgian company

I live and work in Belgium. I want to open a company in a low tax jurisdiction to decrease the tax bill of our Belgian operating company. My business partner and I are currently not considering to leave Belgium. Goal My main goal is to save money on the companies tax bill in Belgium in a cost...

www.offshorecorptalk.com

Depending on what you do, you may be able to set up a subsidiary in a lower-tax country.
Then you can run some parts of your operations through that subsidiary and pay taxes there instead of Belgium. It must be very well-planned, however, and you will need substance (local office, employees with realistic salaries) for that to work.
It's important that you work with a good advisor in Belgium since there are many rules to navigate (economic substance, transfer pricing etc.). If you make a mistake, you risk having to pay the full taxes like for a Belgian company.

the problem stays the same. Even if he makes money in one of those country, he cannot get it where he lives without paying a lot of taxes. Let says he gets dividend, he will pay xx% local then 30% in belgium.

 

[Untangle]

Belgian tax authorities can now go back 10 years, so the chance you will get caught in the next 10 years are realistic. If you can't pay the tax bill when caught (which will be easily double of your revenue through the LLC with all taxes, fines, interest and legal costs) all your assets will be confiscated and any euro you earn above minimum income from your future income.

I would think twice about this

7 years in Belgium and 10 in France if I am not mistaken.
Valid points nonetheless

I had understood it was a grey area but not that bad lol. As someone said I don’t want have the same fate as my pfp.

Does anyone know how I could possibly lower taxes as an independant in Belgium (without moving tax residence) ? Income tax is 50%, and social security is super high too

Register in France as resident.
Deregister from Belgium (easy if no kids)
Set up Auto Entreprise in France
Enjoy super low tax up to 2 years since you will spread your revenue within the max threshold
Cash out
Go back to Belgium after 2 years

 

[Jade33]

I had understood it was a grey area but not that bad lol. As someone said I don’t want have the same fate as my pfp.

Does anyone know how I could possibly lower taxes as an independant in Belgium (without moving tax residence) ? Income tax is 50%, and social security is super high too

You talk about foundations and usa llc but mention belgium income tax 50%?!
This is the case if you run a solo company. I suppose you have the funds for a bvba which is taxed at 23%.
If not good enough or you, pack up as it is necessary to leave belgium for 2 full years to cease tax obligations

 

[FDS ADS]

Hello everyone, I am thinking of a setup to maybe lower some taxes. Not sure if this is correct so please correct me.

Would have

- USA LLC owned by foundation for anonimity
- Invoice the USA LLC let's say a 2000 euros per month for my freelance activity here in belgium, just for my personal needs.
- Have the rest of the money stay in the bank of USA LLC. If the gains are not distributed, they are not taxable as per Belgium's laws on LLCs.
- Don't necessarily need to spend it or have access to it.

Now in my head this makes sense but first of all there might be some problems with that. Second of all, as of now my payment processor is Stripe, which only accepts european IBANS as payout. I would need it to payout to my LLC's bank account.
Any clue as to how to achieve that?

Thanks in advance.

The legal way to arrange your taxes properly is to go out from Belgium and lose your tax residency, then you need to obtain your tax residency in the country where the tax burden is 0% or extremally low, after that, you need to incorporate offshore company where taxes are 0%, then you will be able to arrange all of this legally.

 

[aage]

Speak with a Belgian accountant/tax adviser to make sure you're optimizing deductions and various incentives that may be available.

That is the very best advise in the entire thread!

 

[Mike Forman]

7 years in Belgium and 10 in France if I am not mistaken.
Valid points nonetheless



Register in France as resident.
Deregister from Belgium (easy if no kids)
Set up Auto Entreprise in France
Enjoy super low tax up to 2 years since you will spread your revenue within the max threshold
Cash out
Go back to Belgium after 2 years

They were allowed 10 ten years to review complex tax returns (which is the case when the taxpayer is involved in hybrid structures, CFCs or structures subject to the Cayman tax). From this year or next year standard also all Belgian entities need to keep accounting records for 10 years.
Where you plan to remain resident, which seems to be Belgium consult a tax lawyer. Belgium tax laws closed almost all loopholes and require to have to report everything abroad.

Owning a US LLC or Hong Kong corporation will trigger an investigation (if amounts over a million are involved you get the BBI after you) and once they are on to you they will crush you if you don't have a good tax lawyer.

The Cayman tax was introduced to prevent Belgian residents from obtaining an income tax benefit by holding their assets through certain low-taxed foreign legal structures. The Cayman tax looks right through the veil of such entities and taxes their income in the hands of the Belgian founders.

Consult a tax lawyer now, it will cost you merely 3-5k eur. If you can't afford that then you should not consider establishing any foreign entity or you will just put yourself in trouble in the next decade and have tax authories watching you all the time.