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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 577
Experience:  10 years experience
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This is Alex. I would like to have some information about

Customer Question

Hi,
This is Alex.
I would like to have some information about tax regulations about "Free Zone Tax".
As a US citizen, I need to know if I join as a shareholder to a LLC company registered in free zone (in UAE), do I have to pay tax considering bank account of the company is not in US
Regards
Alex
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.
Hi and welcome to our site!As an US citizen - you are taxed on ALL your taxable income - regardless if that income is earned in the US or abroad and regardless if income is transferred to the US or the money are left in a foreign bank account.Also - whether the income is excluded from taxable income is determined based on US tax laws and regulations - and not based on foreign tax laws.So - while your income might be not taxable in UAE - it is still taxable in the US.Now - we need to be clear whether that LLC is taxed as a corporation OR as a partnership under the US tax law.If that is a corporation - you as a shareholder is taxed ONLY on dividends paid to you.If that is a partnership - you are taxed on your share of the partnership taxable income.