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Shane-CPA
Shane-CPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 265
Experience:  Shane Northrop is a Certified Public Accountant, Personal Financial Specialist and a Chartered Global Management Accountant
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I am a Spanish citizen and own 100% of a LLC company in Delaware.

Resolved Question:

I am a Spanish citizen and own 100% of a LLC company in Delaware. I invoice Apple (Luxemburg) every month for the Apps they sell on the App Store worldwide. They ask me to fill an IRS Tax form which I have been advice is W-8ECI.

I need some help filling the form:
1- I can't see where in the form I must enter the company name, which it seems odd to me.
2- What should I fill in line 6? TIN or ITIN. I don't have it.
3- In line 9. What should I enter? Can I leave it empty?
Submitted: 1 year ago.
Category: Tax
Expert:  Shane-CPA replied 1 year ago.

Shane-CPA :

Hello...my name is XXXXX XXXXX I am a Certified Public Accountant. I look forward to assisting you with your tax question.

Shane-CPA :

Form W-8ECI is for foreign individuals or entities who earn income in the U.S. Normally U.S. companies or individuals are required to withhold up to 30% on gross payments made to a foreign individual.

Customer:

Hi Shane

Shane-CPA :

The purpose of Form W-8ECI is to claim that your U.S. income is "effectively connected" to a U.S. business and therefore is not subject to the mandatory 30% withholding requirement

Shane-CPA :

Is Apply or the Delaware LLC the one requiring you to fill out the Form W -8ECI?

Shane-CPA :

*Apple

Customer:

I see. But filling the form I have some doubts. Can you help me?

Customer:

Yes. Apple.

Shane-CPA :

okay...does Apple make payments to the U.S. LLC or to you personally?

Customer:

To the LLC

Customer:

Although I am the owner

Customer:

I live in Spaibn

Customer:

Spain

Shane-CPA :

Did Apple ask for a list of owners of the U.S. LLC?

Customer:

No.

Shane-CPA :

okay...I'm surprised Apple is requesting a Form W-8ECI since they are paying a U.S. company

Customer:

Before they paid me as an individual.

Shane-CPA :

oh okay...that makes since...

Customer:

But then I created an LLC

Shane-CPA :

that was a good idea to create the LLC

Customer:

I filled a W8-BEN before

Shane-CPA :

Do you have a U.S. Individual Taxpayer Identification Number (ITIN)?

Customer:

No. As long as I know

Shane-CPA :

okay...the only problem is that Line 6 is a requirement on the Form W-8ECI which asks for either a U.S. Social Security Number or U.S. Individual Identification Number (ITIN). You can apply for a U.S. ITIN using Form W-7 but it is a complicated and time consuming process.

Shane-CPA :

Does the U.S. LLC file a tax return?

Customer:

Is there any alternative?

Customer:

No.

Shane-CPA :

okay...that may be an issue for you because a U.S. LLC is required to file a U.S. tax return each year. Any net income earned by the LLC will be taxed to you on your individual U.S. tax return which you would be required to file or the U.S. LLC would be required to withhold the 30% tax on distributions made to you personally....

Shane-CPA :

is this a business you are planning on continuing to do?

Customer:

Yes. I plan to continue.

Shane-CPA :

Since it's something you plan to continue then you will want to make sure everything is handled correctly. Since there are several steps involved you will need on a personal level, I can only advise you of the steps through the Just Answer service. However, I would recommend seeking a U.S. tax professional to help you with the U.S. filings due to the difficulties and time involved.

Customer:

Could you help me or recommend me someone?

Shane-CPA :

Unfortunately, we are unable to offer services outside of the Just Answer service. However, if you search for a U.S. Certified Public Accountant on Google or another search engine, you will find several to choose from. The main question you will want to ask a CPA or other U.S. tax professional is whether they are experienced with Form W-7 and Form W-8ECI.

Customer:

I see.

Customer:

one question: I haven't seen anywhere in the form a place to enter the name of the company. Am I missing something?

Shane-CPA :

The first step is to file Form W-7 which is the application to obtain a U.S. Individual Taxpayer Identification Number (ITIN)

Shane-CPA :

Once you receive the ITIN you can then proceed with the Form W-8ECI

Shane-CPA :

No you are not missing anything...the Form W-8ECI is strictly used for the foreign individual to determine whether there is a withholding requirement. Since the company is a U.S. company, it would not be listed because withholding would not be required since a U.S. company is required to file a U.S. tax return.

Customer:

I see.

Customer:

I have another doubt. in line 9: Specify each item of income that is, or is expected to be, received from the payer that is effectively connected with the conduct of a trade or business in the United States (attach statement if necessary)

Customer:

Would this be correct? - Sales of Apps on the App Store.

Shane-CPA :

Yes...your description would be correct

Customer:

Thank you.

Customer:

Then first of all ITIN - W-7 I will look for that.

Customer:

One last question ...

Shane-CPA :

Sure...

Customer:

In line 3 I marked "Corporation" is this correct?

Shane-CPA :

You will want to mark Individual since the payments were made to you personally...if payments were made to a foreign Corporation then you would mark that box

Customer:

Wow!! Thank you I almost screwed it up :-)

Shane-CPA :

You're welcome =)

Customer:

And in line 2:





Country of incorporation or organization: USA ?




Shane-CPA :

Since you are an individual, you will write N/A

Customer:

Wow. Thank you again. It's complicated for me :-)

Customer:

I think I have it all.

Shane-CPA :

Great!

Shane-CPA :

You're very welcome! It's been a pleasure helping you. If I can provide you with any additional assistance in the future, please let me know. Please provide me with positive feedback so I may receive credit for my response. If you feel exceptional service was provided, bonuses are greatly appreciated. Thank you again and I hope you have a great day!

Customer:

Well ...

Customer:

Just one last question O:-)

Shane-CPA :

Sure =)

Customer:

In signature .... Can I just write my name instead of a real signature (a scanned signature)?

Shane-CPA :

Yes...you can just print your name as your signature =)

Customer:

Thank you very much

Customer:

You have been very kind.

Shane-CPA :

You're very welcome! =)

Shane-CPA :

Thank you! It's been a pleasure!

Customer:

Great !!! I love this system

Shane-CPA :

I look forward to assisting you again in the near future =)

Customer:

Great. Have a good day.

Shane-CPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 265
Experience: Shane Northrop is a Certified Public Accountant, Personal Financial Specialist and a Chartered Global Management Accountant
Shane-CPA and 10 other Tax Specialists are ready to help you

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