My Business Partner Wants To Avoid Double Taxation, Meaning Paying Taxes Here In The US And Spain. I’m A U.S. Citizen, She Is Not. What Should We Do?
Does she need to pay taxes in the US and Spain? Any possibility to only pay here in the US, or only in Spain and avoid double taxation?
What are the possibilities for her side to avoid double taxation?
Tax Professional Answers
Assuming that the LLC is chartered in the United States, the question becomes “it the income considered effectively connected to the United States?” Since you are operating through a US LLC, the income would normally be considered effectively connected. SInce the LLC is a pass through entity, it is required to withhold 30% of her share of the gross income as tax withholding. There is a foreign tax credit available to alleviate the effects of double taxation.
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