Contact UsQuestion clarification- referring to income of LLC itself. Does LLC have to report income? US LLC with sole member who is Non-US-person residing outside of US working remotely as an independent contractor for a US entity, is the income considered "not considered effectively connected" to US?
LLC functions as a "pass through" for non-US person. Does fact that LLC has to have a US address impact whether LLC itself pays taxes?
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Tax Professional Answers
Manasa Nadig
An LLC is a "disregarded entity", hence the sole member has to pay taxes on income derived from LLC on their personal income. If the LLC has a US address, then it may be construed to having a Permanent Establishment in the US and the sole member may be subject to US taxes. When structuring LLCs with foreign sole members one has to be extremely cautious due to various reasons like mismatch in classification in different countries/ loss of treaty benefits etc.
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386 weeks ago