Italian setting up LLC or sole propr. in U.S./ What responsibility in Italy

[MrPanda913]

Hi, I know you guys and gals aren't experts in tax-related legal advice, but any suggestions or sharing of experiences would be welcome. I am a U.S. citizen and my wife is an Italian citizen. She is looking to either start up an LLC or a sole proprietorship in the U.S. for an online retail company she has in the works. Would she still be responsible for taxes in Italy if she did this? Her sales will come from all over. She will be buying her materials ( T shirts as of now, as it is a t shirt company for the moment) in Italy. On a side note: I have read posts about the advantages of incorporating in Seychelles but it seems to complicated for us....we're pretty new to this.

Thanks.

 

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[splok]

Of course, the standard (and best) answer will be to check with an Italian tax attorney. However, here's my stab at it: First, does she live in Italy? Most countries don't tax people who don't live there (the US being an exception.) If she does live there, then she likely owes tax on any income she makes, regardless of where the sales are made. However, if the corp isn't a pass-through entity, then the company is making the revenue (with it's own tax implications, based on it's location) and not your wife. If that's the case, your wife likely has no tax implications other than on the salary that the company pays her or on any revenue generated if she sells the company. If it is a pass-through, then all revenue is her revenue, along with the tax implications.

Also, when doing business in Europe, there are VAT issues to deal with, so don't forget that.

 

[GlobalWealth]

Hi, I know you guys and gals aren't experts in tax-related legal advice,

I am

She is looking to either start up an LLC or a sole proprietorship in the U.S. for an online retail company she has in the works. Would she still be responsible for taxes in Italy if she did this?

Like splok said, if she lives in the US, then she would have US tax liability. Italy has a territorial tax system, meaning you only pay Italian tax when you live in Italy.

If she lives in Italy with a US registered company, she would owe US tax and Italian tax, however there are tax credits available since the US and Italy have a tax treaty.

Her sales will come from all over. She will be buying her materials ( T shirts as of now, as it is a t shirt company for the moment) in Italy.

Why would you want a US based company if she is selling globally and sourcing in Italy?

I have read posts about the advantages of incorporating in Seychelles but it seems to complicated for us....we're pretty new to this.

the offshore Seychelles company would be much simpler for her.

 

[MrPanda913]

Thank you Splok and Globalwealth. Globalwealth, the reason we were originally considering a U.S. based company was our mistaken assumption that doing so would somehow let her avoid Italian taxes. We live in Italy. The reason for looking at the U.S. was because I am a U.S. citizen. Before browsing through this forum I had never considered Seychelles. Is it difficult to set up a company there? Are there any particularly good online sites? Would she still have to pay Italian taxes if she set up a company in Seychelles ( I assume the answer to this last question is yes, considering she is located in Italy)?

Best

 

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[MrPanda913]

Just re-read your post

I just re-read your post Globalwealth about Italy's territorial tax-system...so that answers that question. Thanks again.

 

[Zetta]

Contact local tax consultant. They usually give a meeting for free. meet him/them. Prepare questions in advance. This will be very valuable for you. You can contact like a business that could set you up but than if you want you can just do it yourself but use them at least to get some knowledge.

This 1 does not have office in Italy but just an example what kind of place I would contact.
[video]http://www.ocra.com/index.asp[/video]

Not local tax office, but tax consultant.

 

[MrPanda913]

Thanks Zetta

Thanks Zetta, will do. I'm intent, naturally, on doing everything aboveboard. And you're right, the only way to do so is to speak to a tax professional directly.

Best

 

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[tafy]

Start making money before worrying about taxes