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The proper form for a foreign company to give to a US company would be form W-8BEN
How are you today?
When researching this on the IRS site, there is some mention of "if one of the owners is a US citizen, they should file a separate W9 while the foreign owner files the W8-BEN" or similar.
Under Article 7 of the US/Japan tax treaty, the profits of your Japanese LLC are taxable in Japan only - unless you are doing business in the US with a permanent establishment situated here
Ok, that's a relief
Well, for an LLC you are taxed individually - so if this is the case in Japan as well, you will file a W-9 as you are a US Citizen and use your SSN.
Now, you being a US citizen, you may have tax obligations because of the "worldwide income" clause...
If you cannot exclude under one of the many foreign tax benefits
That seems to contradict the "Article 7" statement.
I believe Japanese LLC is largely the same as a US LLC in structure/form/laws/etc.
Yes, but do you have wages from this business?
So, your wages would be separate from the business profits
Ah I see.
Your business profits would only be taxed in Japan, but any salary you draw would also be subject to tax in the US, unless you qualify for the foreign earned income exclusion or some other benefit
Ok, that's normally handled separately when I file my personal income taxes?
(in the US)
I would have an expat CPA do your taxes by the way, because you have a lot going on
Good advice :)
Do you have a recommendation?
I can't recommend any professionals, but I would search in LA or New York
LA or New York would be the big centers where you would see someone specializing in expatriate tax
About the W8-BEN, what configuration of checkboxes is appropriate for Part II?
The W-8BEN would be for your Japanese wife, and she would check the first box and put "Japan" on the dotted line.
You would fill out a W-9 for your portion of the business, since you are a US citizen
So it sounds like there actually would be withholding for my portion?
If you are a US Citizen there's no withholding on the W-9
because you are paying tax - you're "in the system" so with a W-9 will come a 1099 and earnings would be reported to the IRS. What the withholding is for, is for situations where someone is foreign, with no other tax obligation to the US. The IRS wants to make sure they get their money
That makes sense, but the companies we're dealing with have agreements (and are paying) an LLC, not 2 individuals. Will two separate forms match up with what they need?
But the LLC is disregarded for tax purposes in Japan as well?
Similar to the US?
Taxes are on profits only, yes.
If that's the question.
Well, fill out W-8BEN and you are going to check box "disregarded entity" for the LLC on the top, and on the bottom, then check 9a and write "Japan" on the dotted line
Ok, I apologize for my confusion here.
Wikipedia's article on Japanese LLC implies that they aren't quite the same
"Under United States tax law, godo gaisha are not classified as corporations, and are therefore eligible to make an entity classification election: a single-member GK may be treated as an extension of its member and a multi-member GK may follow the tax rules for partnerships."
So if it's multi-member, check "partnership"
if it's single member, check "disregarded entity"
on the top
Ok, so fill out the form as "Company Name LLC", then select partnership, check 9a and write "Japan"?
So there's no need for my wife's individual W8-BEN or my W9?
No, because you are doing this at the entity level not the owner level
You will handle everything else on the back end on your taxes
I can safely ignore the other checkboxes in 9 and 11?
Yes, you may
Great. Thanks very much for your help!
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Will do. Thanks again!