Yes. US taxes normally only apply if the company is not disregarded (you can always chose in the US). If you pay taxes, withholding taxes will most likely apply too.
RAK ICC withholding tax on US investments
- Thread starter Clank
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Branch profit tax or withholding? If the company is owned, shouldn't it be withholding taxes?
Tomato tomato... it's the same thing.
If the US LLC is taxed as a corporation, it is called WHT. If the US LLC is transparent and has ECI, it's called BPT.
WHT always applies, BPT only applies if the US LLC is owned by a company (and there is ECI).
If the US LLC is taxed as a corporation, it is called WHT. If the US LLC is transparent and has ECI, it's called BPT.
WHT always applies, BPT only applies if the US LLC is owned by a company (and there is ECI).
Ok. But at 21% is won't be transparent. Then just WHT as I mentioned above? Because then, he could add a Georgian company in the middle and reduce it a bit while lowering profits otherwise there too.
Of course you can pay 21% with a transparent entity? Just set up an office in the US and hire staff? Then you will be paying BPT - it's the same rate as the WHT.
Ok, thanks. Now, I get point, although it all does not make any sense. He wants to avoid WHT in the first place from his investment and then sets up some company to pay 21% tax and then pay WHT still?
I think what OP is trying to do is find a cheap way to avoid the US estate tax while investing into US stocks. I guess RAK companies are cheap to set up and don't require and audit? So I could see how that would make sense (if you don't know how terrible it is to deal with UAE service providers and free zones).
But then you of course want to lower the WHT on dividends if possible, so he's asking if he can give IBKR his personal tax residency instead.
Like some guy here suggested in another thread (he didn't understand that this was illegal if the company doesn't actually pay the tax in his residency country).
If you only invest into US stocks, there shouldn't be ECI, so it doesn't matter if it's an individual or a company that owns the offshore entity.
But I also doubt it's a good idea to use a RAK company for this.
But then you of course want to lower the WHT on dividends if possible, so he's asking if he can give IBKR his personal tax residency instead.
Like some guy here suggested in another thread (he didn't understand that this was illegal if the company doesn't actually pay the tax in his residency country).
If you only invest into US stocks, there shouldn't be ECI, so it doesn't matter if it's an individual or a company that owns the offshore entity.
But I also doubt it's a good idea to use a RAK company for this.
I think his original question was only about WHT.
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Thread 'RAK ICC withholding tax on US investments'
Jan 29, 2024Hello,
I'm considering opening an RAK ICC to hold some stocks and property.
I have a question regarding the US withholding tax. Is the tax based on the country of incorporation or the country where the UBO of the company is resident?
RAK ICC companies are specifically created to be offshore without any substance or links to the UAE so they are always tax resident in the country of the UBO.
But then, he needs to go to Georgia.
Many people are fishy here.
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