Can you share what did you find out?
Can you use USA LLC disregarded entity and declare your income in the personal tax return in Spain, is it 100% legal to do it that way? Or you need to register a spanish branch of your USA LLC and follow the spanish accounting and auditing obligations?
On the USA side:
With no Permanent Establishment in the USA and Delaware LLC taxed as disregarded entity you are not required to fill out any forms or do any accounting. You need to pay the yearly franchise tax of $300 which is due June 1st and that's it
If you have any doubts I recommend reading Double Taxation Avoidance Agreement
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The term "permanent establishment" includes especially:
a) a place ofmanagement;
b) a branch;
c) an office;
d) a factory;
e) a workshop; and
t) a mine, an oil or gas well, a quarry, or any other place of extraction of natural
resources.
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Absolutely, a Spanish resident can legally own a USA LLC, irrespective of the state in which it's registered, provided both U.S. and Spanish laws are adhered to. There's no obligation to establish a Spanish branch for your U.S. LLC.
Regarding the U.S. aspect: You're on point. While there's no mandatory accounting requirement, it's highly advisable to maintain comprehensive records – not just for non-residents, but for U.S. residents as well. In Spain, if faced with an audit, you'll be asked for documentary evidence supporting all transactions. Therefore, even if accounting isn't obligatory in the U.S., it becomes virtually essential for clarity and compliance from the Spanish perspective.
Let's illustrate with a few examples:
Phone Bill Deductions: In the U.S., it's common practice to write off 100% of your phone bill as a business expense, even if it's a device you use for personal matters. In Spain, the approach is more conservative. Only 50% of the bill can be written off since it's assumed that the phone is used for personal purposes half the time. Now, if you fully deduct your phone bill under your U.S. LLC and subsequently face a Spanish audit, Hacienda will only acknowledge 50% of that deduction.
In essence, while you can certainly retain ownership of the USA LLC, you should be cautious and apply Spanish regulations and norms where necessary, especially when it concerns potential deductions.