LLC for Greek Resident

[troupos13]

I am interested in establishing an LLC in Delaware or Wyoming. In Greece, where I reside, there is no clear guidance regarding the tax treatment of LLCs. Even the tax treaty between the USA and Greece does not mention anything specific.

However, there are a few points to consider:

- The tax authority manuals state that profit distributions from offshore companies are taxed as dividends. An LLC makes a profit distribution (not dividends).
- The LLC as a company type exists in Greece, and it distributes dividends (similar to the Greek ΕΠΕ - Limited Liability Company).

There is no additional information available regarding the treatment of LLC income in Greece.

What do you think?

 

[daniels27]

Du you plan on running the LLC from Greece? Because then you can forget about those stories you mentioned, they apply to companies managed from the US.

 

[troupos13]

No, company will be managed from outside.

 

[daniels27]

From where?

 

[JustAnotherNomad]

The tax treaty does not apply as the US LLC will not be tax resident in the US.

 

[JustAnotherNomad]

troupos13 said:
There is no additional information available regarding the treatment of LLC income in Greece.
Click to expand...

That's ridiculous. We're not talking about a weird trust structure from some Pacific island.
US LLCs are so common that any decent lawyer for international tax will even be able to tell you which IRS forms have to be filled out.
There will definitely be case law about this - but you may have to ask a Greek tax lawyer specializing in US tax.

You can try a couple of these and ask them:

https://www.cpalaw.gr/en/lawyers/constantine-papacostopoulos/

https://kglawfirm.gr/practice-areas/tax-law/

https://www.legal500.com/c/greece/tax

But the thing is that they will likely ask for more details - where is the company managed, what is your role in all this, where are the clients, and so on.
So then it might become more expensive, but at least you'll get a proper answer.
I would try to get a quote from several of them and try to get a feel for how much experience they have.

There is also a chance that there is no simple answer, but that it will depend on agreements between the LLC and the member.

 

[daniels27]

@JustAnotherNomad the clarifications of transparent US LLC has been an ongoing discussion in Europe. UK, Germany, Switzerland all had issues once. It is well possible that in Greece they don't have strict rules yet.

In the UK, the last update to the HMRC IM is just a bit over a year old
https://www.proskauertaxtalks.com/2...us-of-non-uk-entities-and-us-llcs-post-anson/

But the main question for me is where his LLC is being managed from and whom. Otherwise the whole discussion makes little sense.

 

[JustAnotherNomad]

Of course it's possible that it will depend on the specific case. As far as I know, Germany for example has no strict rules either? It always depends on the specific case.
And you can see something similar for the UK in the article you linked to.
But there's simply a 0% chance that this has never come up and that there is "no information available".
I am sure there is information - but the information may come in the form of court rulings - like those cases in the UK that you referenced,
So it's not necessarily something that's on Google. A lawyer will know this.

 

[troupos13]

As far as I know , Germany , Italy and UK treats the income as dividends as there are official statements online . For Greece nothing , even on the official tax website , even for any past law court decision.

 

[daniels27]

Where is the company managed from?

 

[ImKing]

valid question from where will the US LLC be managed that is important. In general as mentioned already, you get taxed personally from any income the US LLC may have.

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[daniels27]

ImKing said:
valid question from where will the US LLC be managed that is important. In general as mentioned already, you get taxed personally from any income the US LLC may have.
Click to expand...

Unless you are not involved in the management and the company is managed from let's say Germany. In this case, it will be subject to taxation in Germany either as company (intransparent) or as person (transparent like KG: "Die im Ausland ansässigen Gesellschafter unterliegen mit ihren inländischen Betriebsstätteneinkünften der beschränkten Steuerpflicht in Deutschland (§ 1 Abs. 4 i.V.m.
§ 49 Abs. 1 Nr. 2 lit. a EStG).")

 

[JustAnotherNomad]

ImKing said:
valid question from where will the US LLC be managed that is important. In general as mentioned already, you get taxed personally from any income the US LLC may have.
Click to expand...

It seems you are just commenting random nonsense on a lot of topics. What are you trying to achieve?

 

[JustAnotherNomad]

troupos13 said:
As far as I know , Germany , Italy and UK treats the income as dividends as there are official statements online .
Click to expand...

No, this is not necessarily true, as has been pointed out before. Didn't you read the other replies before commenting?
You could read the article linked here about how the UK treats this to learn more.

 

[Marzio]

troupos13 said:
There is no additional information available regarding the treatment of LLC income in Greece.
Click to expand...

There's no need for additional informations about US LLC treatment in Greece as even Greek companies that should be tax transparent, are not tax transparent.

source: https://taxsummaries.pwc.com/greece/corporate/income-determination

troupos13 said:
company will be managed from outside.
Click to expand...

Then you should be aware of Greek CFC rules.

 

[JustAnotherNomad]

Seems like the Greek CFC rules don't apply to operative businesses, so it might not capture this.
But I wouldn't be so sure that they really treat it as opaque - not everything is logical when it comes to taxes...

 

[troupos13]

Yes but they claim that profit distribution from offshore companies as well as from trusts , are taxed like dividends . I think LLCs distributions are based on this.

 

[JustAnotherNomad]

troupos13 said:
Yes but they claim that profit distribution from offshore companies as well as from trusts , are taxed like dividends . I think LLCs distributions are based on this.
Click to expand...

That would mean they are opaque.

 

[troupos13]

What we declare as dividends in Greece , according to tax law :

“The following are recorded: dividends and interim dividends (prior to the deduction of any withholding tax) from foreign-listed and non-listed shares, the excess returns on mathematical reserves from individual insurance contracts of foreign insurance companies, the profit distributions of partnerships with double-entry accounting abroad, temporary withdrawals abroad, the profit distributions of trusts and offshore companies, the profit distributions of mutual funds established in third countries, and the remuneration paid in any form to members of the Board of Directors, managers, and employees from the profits of the legal entity or legal entity of foreign origin.”

Dividends are subject to a withholding tax of five percent (5%).

The term “dividends” means any income arising from shares, founders' titles, or other rights participating in profits not being debt-claims, as well as income from other corporate rights, including shares, dividends, prepayments and mathematical reserves, shares in the profits of personal enterprises, distributions of profits by any legal person or legal entity, and any other related distributed amount.

If the distribution of dividends is subject to withholding tax, the withholding tax exhausts the tax liability only for individuals and for the specific type of income of the taxpayer.

All these from tax website

 

[daniels27]

Ok but you state

troupos13 said:
profit distributions of partnerships with double-entry accounting abroad
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Which essentially is any US LLC that is transparent.

The main question I see here is where the LLC is managed from. As it may be deemed a company elsewhere should this be the case.