Foreign-owned USA LLC - Tax question

Which form?

[argiboul]

I run a Delaware based LLC (got my EIN). The LLC is single owned, and foreign owned - i.e.: I'm not supposed to pay ANY USA federal taxes on the LLC and no state taxes either because the LLC has no assets/employees in the USA.

Which tax form should I use in Adsense? I'm tempted to use the "foreign" one, but maybe it would be wrong? Google's support team could not answer this question.

Anyone?

Thanks.

[ectect]

I would confirm it with a tax lawyer (which I'm not) but it may well be the W-8ECI

[LifeinAsia]

Someone told you that you can earn money in the U.S. and not have to pay Federal taxes on it?! Would this be the same person who took your money to setup the LLC? You should definitely talk to a reputable tax advisor who is NOT associated with the person who setup your LLC.

[DamonHD]

Hi LIA,

It is often the case that you (can) have all your worldwide revenue taxed in one place, or get the same result c/o "double taxation" treaties.

Eg, if I am a UK resident/company and wholly-own a US LLC it would be entirely reasonable for me (I think, IANAL!) to pay taxes ONCE in the UK on all my worldwide incoming, including that from the US.

Now it is possible that I might end up having to pay the higher of whichever the applicable US or UK taxes would be for my US earnings, but in that case I *guess* that either you pay them to the US IRS and get a partial refund from the UK Revenue, or pay the UK bit to the UK and the balance to the US.

IANAL, but I do not find the OP's proposition astonisting, as lonf as they pay taxes SOMEWHERE!

Rgds

Damon

[LifeinAsia]

Sounds logical at first, but how is the U.S. going to get its share of taxes from you if you pay all your taxes to the U.K.?

What usually happens is that you pay the U.S. taxes on your U.S. income, and you get a credit on what you have to pay for U.K. taxes. (At least that's what happens in the other directions- U.S. people paying foreign taxes on income from other countries.)

In regards to the OP, it's certainly possible to not have to pay taxes on U.S.-based income (for example, making less than a taxabale threshold or having expenses equal to or greater than revenue). But I would be very dubious of any claims that you could avoid having to pay any taxes without any qualifications on that claim.

[DamonHD]

Hi LIA,

You may well be right.

But note (a) the concept of transfer chaging so that you can arrange not to make any taxable profit in one place or another and (b) the madness that is intra-EU VAT where in fact no tax payment is made but you are meant to spend your life filling in forms presumably to allow someone to to the netting centrally between the treasuries!

The OP really does need some independent advice, you are right. It's unlikely to be cheap.

Rgds

Damon