Can an IBC pay my bills, avoid dividend tax?

[AlbertBr]

I'm not American citizen.

Let's say for example I have a Cayman Island's LLC and a Cayman Island's bank account. I use the corporative credit card in the name of the LLC to pay my expenses (rent, grocery etc.). Is this considered dividend and I need to pay where I'm resident (let's say New Zealand) or only the LLC is taxed with corporate tax?

Thanks.

 

[AlbertBr]

Now I saw I posted in the wrong category. Can a moderator move this thread to Tax questions?

 

[Sols]

An LLC does not pay dividends. Dividends are paid to shareholders. There are no shareholders in LLCs. Instead, LLCs have members.

When it comes to an LLC, the normal term used is distribution. Funds distributed from an LLC to its members is considered personal income by default.

However, if you live in a jurisdiction which does not recognize LLCs and do not treat them as partnerships, the funds you withdraw may be considered dividends under local law where you live.

Since you don't live in the Cayman Islands, you need to consult with a local tax adviser whether funds distributed from an LLC are personal income or dividends.

If you actually do live in New Zealand, take a look at Look Through Companies, which are tax transparent very similar to LLCs.

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This is the probably the answer to your question.