Hi, I would like to ask about my obligations to IRS or any other U.S. authority. I own single-member LLC created in Delaware. I am non-resident alien, citizen of European country Slovak Republic. Source of income is not from U.S., business is conducted outside U.S., company sells subscription service over internet, servers are in Germany, we sell primary to Europeans, not U.S.. Company has no employees in U.S., no physical presence in U.S. I read from various sources that as non-resident alien with LLC of above stated properties, I do not have to file any forms and I am not subject to income or withholding tax, but I think is too good to be true. Can anybody confirm or specify my responsibilities to IRS? If I understand it right, I have to pay only personal income tax in Slovakia.===========>> a SMLLC owned by a non us resident member who doesn’t have any business derived in the US, can be referred as Offshore SMLLC.UNLESS the SMLLC business is conducted in the US and all its income is foreign source income, then no tax need be paid to the IRS. The US becomes a tax haven for you that is a non-resident alien.As the SMLLC is fully owned by you, a non us resident, and the SMLLC’s income is not derived from the US and it is not effectively connected with trade or business within the US nor do they employ US residents or rely on a dedicated place of business within the US, the income is not subject to US tax.So, since as you said here, your U.S. SMLLC derives 100% of its income from sources outside of the U.S., you, as a non-resident alien, will have no Federal tax liability to IRS; the cost of the Delaware Franchise Tax and Annual Report, amount of $300 for the foreign LLC are due by the first day of June following the close of the calendar year in which the registration is filed.
You need to contact the Franchise Tax Section with any questions regarding Annual Taxes for more info. You need to file the required reports for your Delaware Foreign SMLLC.
I have read a document Taxation of Nonresident Aliens. Does it mean, that if I do not belong to any of the group in paragraph A. Who must file it means I do not have to?====> you still do not have to UNLESS you have table US source income;you must pay income taxes to the IRS only on the income that’s effectively connected to the U.S., which generally includes the money you earn while in the U.S. The IRS, however, has no authority to impose tax on the income that you, as a non resident alien, earn in your home country or in any foreign country for that matter.
Can you pleas help me find a part/quote from Internal Revenue Code or other law document that proves when profit from LLC is sent to Slovak owner, there is no obligation withhold tax.====>>hopefully, Taxation of Nonresident Aliens
My last question is which part of tax treaty is about paying profits from LLC, because i read that it is not dividends? Link to tax treaty: http://www.irs.gov/pub/irs-trty/slovak.pdf====>>i guess you may check Article 7----------------------------------Business Profits since you created a SMLLC you have a claim on all earnings and assets of the business. You , as a SMLLC owner, do not receive dividend payments; only shareholders of a corporation receive earnings through dividends..