Virtual office and permanent establishment

Junker

New member
Hello.
I have a single-member LLC in USA Wyoming, I am not US-resident and I never been in USA, also i don't have any employee in USA.
If i don't have an office or Permanent Establishment in USA then i don't have to pay any taxes in USA.
But i have a virtual office in USA (WYOMING VIRTUAL OFFICE – WYOMING NEXUS), will IRS count it as a Permanent Establishment?
 

Sols

Entrepreneur
As long as the LLC is treated as a tax neutral pass-through entity (which is standard), it doesn't matter for US tax purposes whether the company is considered tax resident. The entity itself is not taxed; its members are, and they are taxed on personal income. And if you yourself aren't resident or citizen in the US, you would under most normal circumstances not be liable for any income tax in the US.

The exception to this is if your company does business within the US. The law is unclear on this, courts haven't been consistent enough, and enforcement is rare for foreign-owned LLCs, but there is a small risk the IRS determines that you run a US business and your personal income is subject to US personal income tax.
 

Perry8

New member
As long as the LLC is treated as a tax neutral pass-through entity (which is standard), it doesn't matter for US tax purposes whether the company is considered tax resident. The entity itself is not taxed; its members are, and they are taxed on personal income. And if you yourself aren't resident or citizen in the US, you would under most normal circumstances not be liable for any income tax in the US.

The exception to this is if your company does business within the US. The law is unclear on this, courts haven't been consistent enough, and enforcement is rare for foreign-owned LLCs, but there is a small risk the IRS determines that you run a US business and your personal income is subject to US personal income tax.
This is very accurate. It should be added that the criteria is whether your business has a local presence or not. Doing business in the US (selling to US customers) has traditionally not been enough to declare a local precense, but many experts thinks that the IRS will tighten this screw.

This is also the reason why you should never set up a US LLC with yourself as a member (unless you are a US citizen or resident or unless you opt to have it taxed as a C-corp). Suddenly you can become personally liable for US taxes.
 
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