Tax return of an American LLC in France: tax obligations to know

The creation of an LLC (Limited Liability Company) in the United States can offer many advantages for French entrepreneurs who wish to expand their business in the American market.

However, it is important to understand the tax implications of this foreign legal structure, particularly with respect to French income tax reporting.

The tax rules in force can be complex, so it is important to be informed about the tax obligations related to the management of a U.S. LLC to avoid any risk of tax non-compliance.

Tax obligations related to the management of an American LLC in France

American LLCs considered as foreign companies in France

In France, U.S. LLCs are considered foreign companies. As such, income generated by this structure must be reported to the French tax authorities in accordance with the rules in effect for foreign companies.

Personal income tax in France

It is important to note that U.S. LLCs are not subject to corporate income tax in France, but rather to personal income tax. The profits earned by the LLC are therefore taxed at the French personal income tax rate, due to the semi-transparent tax status of the U.S. LLC.

It is also important to note that a U.S. LLC must also report its income to the U.S. tax authorities. U.S. tax rules may differ from those in France, so it is important to learn about the tax obligations of running an LLC in the U.S.

We have listed these different obligations here.

Tips for efficient reporting of U.S. LLC income for a French tax resident

What forms are required?

In order to report the income of a U.S. LLC in France, it is necessary to complete several tax forms. First, Form 2042 must be completed and filed with the French tax authorities. This is the tax return for individuals that must include the income generated by the U.S. LLC. It is important to note that this income must be declared in the category of "Income from foreign sources".

In addition, the U.S. LLC must also complete and file a foreign corporation income tax return (Form 2047) with the French tax authorities. This return must include information regarding the income generated by the LLC, as well as information regarding the shareholders and directors of the LLC.

Finally, partners must complete form 3916 bis to declare accounts opened and held abroad.

It is recommended to use a specialist to ensure that the income of the American LLC is correctly declared in France.

Maintain accurate and up-to-date financial records

It is important to keep all proof of payments, invoices and expenses related to the LLC's business so that they can be presented to tax authorities in the event of an audit.

In conclusion, running a U.S. LLC in France can offer many advantages, but it is important to understand the tax implications of this foreign legal structure. It is essential to be informed about the tax obligations related to the management of a U.S. LLC in France to avoid any risk of tax non-compliance.

It is recommended to use specialists to ensure that the LLC income is correctly declared in France. Expert LLC USA can assist you.