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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 1000
Experience:  Tax Preparer for 16 years; 25+ years experience as a real estate/corporate paralegal.
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Hello, I am a Moroccan Citizen currently considering to create

Customer Question

Hello, I am a Moroccan Citizen currently considering to create a Delaware Single Member LLC. I am launching a new social network containing an ecommerce platform and a shopping cart. So basically all the business will be done through the net.
From previous answers, my understanding is that the LLC will be ignored for US income tax purposes and this even if the LLC has a US bank account and an address, correct ?

From another perspective, I might travel to the US at some point in time in order to conduct market research, negotiate a contract, advertise ... Would such physical presence create a need for my LLC to pay taxes ? If yes, could you please advise on which tax would I need to pay and which forms would I need to fill.

Thanks and Regards,
Submitted: 11 months ago.
Category: Tax
Expert:  Barbara replied 11 months ago.

Welcome. My name is XXXXX XXXXX it will be my pleasure to assist you with your tax question today.

 

If you use a US company to carry on business outside the US, and have no US resident owners, then very likely your LLC is not subject to US income tax or reporting. As a single-member LLC, your company is automatically considered to be a disregarded entity for tax purposes which means that it does not exist for income tax purposes. If the owner is not subject to US tax, and the LLC is not doing anything that would trigger US tax obligations, then it does not have a US tax or reporting obligation.

 

Further, your visits to the US to conduct market research, advertise, etc. would not be deemed as setting up a permanent establishment provided you do not lease office space, hire employees, etc.

 

Please let me know if you require further information or clarification.

 

Thank you and best regards,

Barb

Customer: replied 11 months ago.

Thanks for that - I just need some clarifications:


 


A/ So although I would receive payments from US customers, it would have no impact correct ?


 


B/ You said very likely: can anything make it not likely ?


 


C/ LLC not doing anything that could trigger US tax obligations: can you provide examples of possible triggers?


 


D/ Regarding visits: would hiring a US company to accomplish a task be deemed as setting up a permanent establishment ? Would hiring a part timer or an intern to perform a specific task be deemed so ?


 


Thanks and Regards,

Expert:  Barbara replied 11 months ago.

Thank you for your follow-up questions.

 

A. Correct.

 

B. and C. As long as you do not do anything that would be deemed as setting up a permanent establishment in the US as I mentioned previously.

 

D. Hiring employees is one of the factors considered as setting up a permanent establishment. If you utilize the services of a US company to accomplish a task, would it be ongoing?

 

Thank you.

Barb

Customer: replied 11 months ago.

Thanks for the clarifications:


 


D/ Lets say the US company is hired to perform a specific and defined task (examples: conduct a marketing or advertising campaign, organize a set of public relations event...) ?


 


Thanks and Regards,

Expert:  Barbara replied 11 months ago.

The services of a company would be utilized as a consultant as opposed to you hiring an employee or employees and would be an expense of the LLC for the particular task (i.e., advertising, marketing, etc.).

 

Thank you.

Barb

Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 1000
Experience: Tax Preparer for 16 years; 25+ years experience as a real estate/corporate paralegal.
Barbara and 4 other Tax Specialists are ready to help you
Expert:  Barbara replied 11 months ago.

Hi, Badr.

 

Just a short note to thank you for the "excellent" rating. It is most appreciated.

 

If you have any questions in the future, please feel free to put "for bkb1956 or Barb" in the subject line, and I will be happy to assist you.

 

Thanks again and best regards,

Barb

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