USA LLC + Belgium Freelancer

[sarko]

Hello everyone, I am thinking of a setup to maybe lower some taxes. Not sure if this is correct so please correct me.

Would have

- USA LLC owned by foundation for anonimity
- Invoice the USA LLC let's say a 2000 euros per month for my freelance activity here in belgium, just for my personal needs.
- Have the rest of the money stay in the bank of USA LLC. If the gains are not distributed, they are not taxable as per Belgium's laws on LLCs.
- Don't necessarily need to spend it or have access to it.

Now in my head this makes sense but first of all there might be some problems with that. Second of all, as of now my payment processor is Stripe, which only accepts european IBANS as payout. I would need it to payout to my LLC's bank account.
Any clue as to how to achieve that?

Thanks in advance.

 

[JustAnotherNomad]

Hope you are aware that that is illegal and comes with a very high risk‌ of being caught.

 

[Marzio]

The same problems‌ that will face your avatar.

 

[Sols]

It's going‌ to be an extremely unattractive proposition for most banks.

That's correct only if the US LLC isn't tax resident and doesn't have a PE in⁤ Belgium. If it does, it's essentially a Belgian company for tax purposes.

That's good because you risk never seeing the money again if the tax authority comes for⁣ you.

You're talking about setting up a US company, right? In that case, you sign︃ up with Stripe in the US and they will do payouts to our US bank︄ account.

 

[sarko]

We don't have a PE in Belgium. Also what do you mean by 'US︀ LLC isn't a tax resident' ? As for Stripe, I have heard that Stripe USA︁ does not accept US LLCs unless you can provide a SSN, which I don't have.︂

 

[Sols]

https://taxsummaries.pwc.com/belgium/corporate/corporate-residence
The foundation probably won't help, because a⁢ Belgian court would just ask under whose direction the foundation operates. Belgian tax law is︀ a mess, though, and can be difficult to enforce and predict.

The US LLC is probably tax resident in Belgium. There is probably no difference between your︂ US LLC and just forming a local company in Belgium for tax purposes. So any︃ exemptions for foreign dividends/income, for example, might not apply.

I believe they accept ITIN for natural︆ persons and EIN for companies, but this is something you'll have to look into. Stripe︇ Europe can't open a merchant account for a US company.

 

[Alonzo]

He probably hasn't heard about the Cayman‍ tax. Wait till he gets caught

 

[Mike Forman]

Belgian tax authorities can now go back 10 years, so the chance‍ you will get caught in the next 10 years are realistic. If you can't pay⁠ the tax bill when caught (which will be easily double of your revenue through the⁤ LLC with all taxes, fines, interest and legal costs) all your assets will be confiscated⁣ and any euro you earn above minimum income from your future income.

I would think⁢ twice about this

 

[sarko]

I had understood it was a grey area but⁢ not that bad lol. As someone said I don’t want have the same fate as︀ my pfp.

Does anyone know how I could possibly lower taxes as an independant in︁ Belgium (without moving tax residence) ? Income tax is 50%, and social security is super︂ high too

 

[Sols]

There's not much you can do if you're on your⁠ own. Any overseas company you form is going to become tax resident in Belgium.

Speak with a Belgian accountant/tax adviser to make sure you're optimizing deductions and various incentives that⁤ may be available. Aside from that, the taxes you pay is the price of living⁣ in Belgium. If you don't like it and assuming you have an EU passport, you⁢ have for example Malta and Cyprus available for quick and easy relocation, and drastic tax︀ savings.

 

[Marzio]

Take a look at the innovation income‍ deduction, it's the only way to reduce Belgian taxation legally to <4% but you⁠ have some qualifying IP.

 

[JustAnotherNomad]

Look at this thread:
https://www.offshorecorptalk.com/th...n-with-substance-for-a-belgian-company.29502/
Depending on what you do, you may be able to‌ set up a subsidiary in a lower-tax country.
Then you can run some parts of‍ your operations through that subsidiary and pay taxes there instead of Belgium. It must be⁠ very well-planned, however, and you will need substance (local office, employees with realistic salaries) for⁤ that to work.
It's important that you work with a good advisor in Belgium since⁣ there are many rules to navigate (economic substance, transfer pricing etc.). If you make a⁢ mistake, you risk having to pay the full taxes like for a Belgian company.

 

[donald1234]

LLC are ^pass-through︂ as far as i know. Moreover your activity are in Belgium so you cannot chose︃ to let the money in LLC. It will be considered as belgian activity and subject︄ to belgian taxes.

if you are belgian working in belgium, you︈ are permanent establishment in Belgium as per Belgian laws 🙂

Luxembourg is a little bit︍ cheaper but not that much...

the problem stays the same. Even⁢ if he makes money in one of those country, he cannot get it where he︀ lives without paying a lot of taxes. Let says he gets dividend, he will pay︁ xx% local then 30% in belgium.

 

[Untangle]

7 years in Belgium and 10 in France if⁢ I am not mistaken.
Valid points nonetheless

Register in France as resident.
Deregister from︄ Belgium (easy if no kids)
Set up Auto Entreprise in France
Enjoy super low tax︅ up to 2 years since you will spread your revenue within the max threshold
Cash out
Go back to Belgium after 2 years

 

[OffshoreJJ]

sarko said:
I had understood it was a grey area but not that bad lol. As someone said I don't want have the same fate as my pfp.

Does anyone know how I could possibly lower taxes as an independant in Belgium (without moving tax residence) ? Income tax is 50%, and social security is super high too
Click to expand...

You talk about foundations and usa llc but mention belgium income tax 50%?!
This is the case if you run a solo company. I suppose you have the funds for a bvba which is taxed at 23%.
If not good enough or you, pack up as it is necessary to leave belgium for 2 full years to cease tax obligations

 

[Jade33]

You talk about foundations and usa llc but mention belgium income tax 50%?!
This is the case if you run a solo company. I suppose you have the funds⁣ for a bvba which is taxed at 23%.
If not good enough or you, pack⁢ up as it is necessary to leave belgium for 2 full years to cease tax︀ obligations

 

[FDS ADS]

The legal way︂ to arrange your taxes properly is to go out from Belgium and lose your tax︃ residency, then you need to obtain your tax residency in the country where the tax︄ burden is 0% or extremally low, after that, you need to incorporate offshore company where︅ taxes are 0%, then you will be able to arrange all of this legally.

 

[aage]

That is the very best advise‍ in the entire thread!

 

[Mike Forman]

They were allowed 10 ten years to review complex⁣ tax returns (which is the case when the taxpayer is involved in hybrid structures, CFCs⁢ or structures subject to the Cayman tax). From this year or next year standard also︀ all Belgian entities need to keep accounting records for 10 years.
Where you plan to︁ remain resident, which seems to be Belgium consult a tax lawyer. Belgium tax laws closed︂ almost all loopholes and require to have to report everything abroad.

Owning a US LLC︃ or Hong Kong corporation will trigger an investigation (if amounts over a million are involved︄ you get the BBI after you) and once they are on to you they will︅ crush you if you don't have a good tax lawyer.

The Cayman tax was introduced to prevent Belgian residents from obtaining an income tax benefit by holding their assets through︆ certain low-taxed foreign legal structures. The Cayman tax looks right through the veil of︇ such entities and taxes their income in the hands of the Belgian founders.

Consult a︈ tax lawyer now, it will cost you merely 3-5k eur. If you can't afford that︉ then you should not consider establishing any foreign entity or you will just put yourself︊ in trouble in the next decade and have tax authories watching you all the time.︋