bypass 30 percent withholding tax for royalties
- Thread starter FrustratedMan
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There are some good reads here
You can either setup a company in Georgia and then pay out the︆ profits to you as active income (if your country does not tax them) or you︇ move to Georgia.
You can either setup a company in Georgia and then pay out the︆ profits to you as active income (if your country does not tax them) or you︇ move to Georgia.
The reason why I asked this, I read somewhere on this forum that if you do a US LLC, they'd still withhold 30 percent as a non resident. Why would a UK LTD as a non resident bypass the withhold tax?
Thanks for the info,︎ but it has to be the UK for a specific reason.
Thanks for the info,︎ but it has to be the UK for a specific reason.
Georgia.
Another option would be to set up a US corporation and then get the money out from the US corporation in some other way.
Another option would be to set up a US corporation and then get the money out from the US corporation in some other way.
If I understood it correctly, withholding tax depends upon where the UBO is resident and not the company? "The provisions of paragraph 1 of this Article shall not apply if thebeneficial owner of the royalties, being a resident of a Contracting State, carries onbusiness in the other Contracting State, in which the royalties arise, through apermanent establishment situated therein, and the royalties are attributable to suchpermanent establishment. In such case, the provisions of Article 7 (Business Profits)of this Convention shall apply"
The UK-US tax treaty (like most modern tax treaties) have LoB clauses, so it matters where the UBO is resident.
Not with Georgia, because these are old Soviet Union tax treaties that didn't have LoB clauses yet.
Not with Georgia, because these are old Soviet Union tax treaties that didn't have LoB clauses yet.
No. You just need a company there and then pay out the profits to you. Beware that there are profit taxes. If you move there as per the linked articles, you can get the royalties personally tax-free.
Georgia is the way to go. I wrote up this for the other linked post: https://www.offshorecorptalk.com/th...ture-2-1-effective-tax-rate.46119/post-341054
US tax treaties are structured in a way that to access the benefits of the treaty UBO has the be tax resident of the country used to claim the treaty. If a UK entity (either a company or natural person) claims the benefits of the treaty it has to pay UK taxes.
There's no way to avoid that and i assure you i've read every word of those treaties, i've read technical analysis looking for a loophole, there is none that can︀ be exploited.
Georgia is︁ surely an option but banking will be problematic, especially when you receive USD.
There's no way to avoid that and i assure you i've read every word of those treaties, i've read technical analysis looking for a loophole, there is none that can︀ be exploited.
Georgia is︁ surely an option but banking will be problematic, especially when you receive USD.
If UK company wouldn't be able to access the benefits of the treaty would have to pay 30% US WHT on royalties and obtain a credit for the taxes paid overseas but obiously up to the UK CIT so max 25% or 19% depending in which tax bracket would fall the UK company.
This happens with countries without a US tax treaty. For example UAE where you will pay 30% US WHT on royalties plus 9% UAE CIT, not funny.
This happens with countries without a US tax treaty. For example UAE where you will pay 30% US WHT on royalties plus 9% UAE CIT, not funny.
If you don't have access to treaty benefits, you have the same situation as if there was no treaty. So there can be double taxation.
Most countries give some relief (tax credit) for tax paid overseas, even if there is no treaty.
Most countries give some relief (tax credit) for tax paid overseas, even if there is no treaty.
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