US LLC v GmbH, etc.

26 posts in this topic

Just to wrap up my own thread from months ago... I ended up creating an LLC in the US. The Finanzamt told me that since I'm the only owner of the LLC, they will treat it as a Personengesellschaft which ends up meaning that I'm a Freiberufler (I'm an engineer). So I got the limited liability I wanted in the US (where my customers are), and no separate tax return or accounting requirements in Germany that a GmbH or UG would have required. Since I live in Germany, I could create the LLC in a state with the best liability protections and cheapest fees. Thanks to everyone for your help!

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GReat update - will help a lot of other Expats, I am sure. Thanks!

 

Cheerio

 

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Hi StephenGermany,

 

I'm in a nearly identical situation to yours, except that I will be selling software (that I have programmed myself) over the internet. Do you report and pay Gewerbesteuer? My German tax advisor indicated that if I am running a single-member LLC business primarily from Germany (meaning that most of the business decisions are made while I am in Germany), then I not only have a Betriebsstätte in the US but one in Germany as well and thus must pay Gewerbesteuer on the profits from the business. The profits of course must also be reported on my German income-tax returns, under Einkommen aus Gewerbebetrieb; the Double Taxation Treaty with the US should apply to this income, however, so that I will not be taxed twice for it.

 

Does the Gewerbesteuer affect your business? Or are you classed as a Freiberufler? (Edit: I can see above that you concluded you are a Freiberufler, but did the Finanzamt actually tell you that or is it instead an inference based on the LLC's classification as a Personengesellschaft? The latter would not automatically imply a freiberufliche Tätigkeit, to my knowledge.)

 

Thanks and greetings,

Emory

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I'm a Freiberufler. I don't pay Gewerbesteuer. I'm sorry, I don't know whether you need to pay it or not, given you are selling a product, which makes your situation rather different from mine. Good luck!

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