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Question

Hi, I'm from Australia, and we are thinking about setting up a business in the USA to allow us to sell products online, both in the US, and internationally. From what I understand an LLC would be the way to go, but what are the tax implications? and do we need anything else like a EIN or SSN?

Submitted: 26 days and 5 hours ago.
Category: Tax
Value: $15
Status: CLOSED
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State/Country relating to question: Delaware

Posted by LEV 25 days and 21 hours ago.

Info Request

Hi,

is there a specific reason - you want to have a legal entity in the US?

Do you plan to have any business facility, employees, agents, etc in the US?

If yes - in which states?

25 days and 15 hours ago.

Reply

Hi, No plan for employees, business facilities etc at this stage. We would be selling strictly online. The reason for the company in the U.S. is that it is that some of the U.S. companies we deal with require this. Please advise all requirements for us to set up an LLC, I presume we also need a EIN? Is there anything else? and would we just pay tax on the income we gain from the U.S. or also from other countries? Thank you. Kristine

Accepted Answer

Hi again,

LLC is not taxable entity - its income and tax liability is passed through to members.

LLC with several members generally is treated as a partnership and need to file a partnership tax return.

Single member LLC is disregarded entity - means all income and expenses are reported on the owner's tax return.

 

You might need an Employer Identification Number (EIN) is also known as a Federal Tax Identification Number, and is used to identify a business entity. You may apply for an EIN in various ways, and now you may apply online. This is a free service offered by the Internal Revenue Service.

 

If you will register the LLC in Delaware - there is no state income tax - as long as your LLC will do not have any business activities in that state.

 

Please also be aware of US-Australia income tax treaty - http://www.irs.gov/pub/irs-pdf/p901.pdf

Income that residents of Australia receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U.S. income tax if the residents:

  • Are in the United States for no more than 183 days during the tax year, and

  • Do not have a fixed base regularly available to them in the United States for the purpose of performing the services.

If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base.

Pay that residents of Australia receive for labor or personal services performed in the United States as employees (dependent personal services), including services as a director of a company, is exempt from U.S. income tax if:

  • The residents are in the United States for no more than 183 days during the tax year,

  • The pay is paid by, or on behalf of, an employer or company that is not a resident of the United States, and

  • The pay is not deductible in determining the taxable income of the trade or business of the employer (or company) in the United States.

Let me know if you need any help.

 

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Expert: LEV
Pos. Feedback: 99.3 %
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Answered: 10/27/2009

Tax Preparer

Taxes, Immigration, Labor Relations

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