UK LLP + W‑8BEN‑E or W‑8IMY

[hastes]

Hello (again)
I'm currently updating the tax information in my Google Play Developer account and have encountered some confusion regarding the appropriate form to submit: W‑8BEN‑E or W‑8IMY.

Background:

• Entity Type: UK Limited Liability Partnership (LLP).
• Residency: Georgia.

Considerations:

1. Form W‑8IMY: This form is designated for entities acting as intermediaries or flow-through entities. Given that partnerships are typically considered flow-through entities for U.S. tax purposes, it seems logical to use W‑8IMY.
   Therefore, in addition to the LLP's information, Google will also require personal tax details to be provided.
2. Form W‑8BEN‑E: This form is intended for foreign entities that are the beneficial owners of income. According to the IRS instructions, it's used by foreign entities to document their statuses for purposes of chapters 3 and 4, as well as for certain other Code provisions.

Why:

1. Entity Classification: The Wikipedia article on entity classification elections notes that a foreign LLP is treated by default as a corporation if all its members have limited liability. This suggests that my LLP might be classified as a corporation for U.S. tax purposes, which would make W‑8BEN‑E the appropriate form.
   https://en.wikipedia.org/wiki/Entity_classification_election
   "whereas a foreign LLP is treated by default as a corporation (if, as is generally the case, all its members have limited liability)."
2. Tax Treaty Benefits: Considering my tax residency in Georgia, I wonder if it's more advantageous to present the LLP as a UK entity to leverage the U.S.-UK tax treaty benefits. Intuitively, the U.S.-UK treaty might offer more favorable terms, even though both the U.S.-Georgia and U.S.-UK treaties provide for a 0% withholding rate on certain types of income.

Any insights or experiences shared would be greatly appreciated.

 

[Marzio]

I wonder if it's more advantageous to present the LLP as a UK entity to leverage the U.S.-UK tax treaty benefits.

You can't present the UK LLP as a UK entity because it's a transparent entity and those entities aren't tax resident in the country of registration.

That's why you choose the UK LLP in the first place, don't you?

 

[hastes]

You can't present the UK LLP a a UK entity because it's a transparent entity and those entities aren't tax resident in the country of registration.

That's why you choose the UK LLP in the first place, don't you?

Yes, but... "whereas a foreign LLP is treated by default as a corporation (if, as is generally the case, all its members have limited liability)."
I think i will use W‑8IMY anyway. Just touching ground before step on.

 

[megasis]

Hello (again)
I'm currently updating the tax information in my Google Play Developer account and have encountered some confusion regarding the appropriate form to submit: W‑8BEN‑E or W‑8IMY.
View attachment 8715

Background:

• Entity Type: UK Limited Liability Partnership (LLP).
• Residency: Georgia

UK LLPs are often treated as pass-through entities (like partnerships) for tax purposes. This means the LLP itself typically doesn’t pay tax; instead, the income is distributed to the partners, who are taxed individually, correct ?
Since the LLP is registered in the UK but its partners are resident in Georgia, the tax residency of the partners is relevant. If the income flows through to the partners and they're taxable in Georgia, this supports the use of W-8IM

 

[Marzio]

Yes, but... "whereas a foreign LLP is treated by default as a corporation (if, as is generally the case, all its members have limited liability)."

Yes, but..."For United States income tax purposes..." which isn't your case.

 

[hastes]

Yes, but..."For United States income tax purposes..." which isn't your case.

So, this rule for US residents?

 

[Marzio]

So, this rule for US residents?

Income tax means taxes on your income and income taxes are paid where you are tax resident.

Are you US tax resident?

No, then what you quoted from wikipedia does not apply to you.

You can't present UK LLP as tax resident in UK so you have to file W‑8IMY.

The problem is that UK LLP does not exist in Georgia as a business structure, they have LLC and LP but they don't have LLP so it may very well be considered an opaque entity.

I think in your case, the best structure would be to use a Ontario LP that could be registered even with one partner. You will then file W‑8IMY and then when asked use your Georgian tax ID.

Ontario LP will be paid by Google and you will pay 1% taxes in Georgia.