Cross-border tax planning for Delaware LLC founders: home country meets US

Why two advisers are essential

A US CPA handles US filings (Form 5472, Form 1120, Form 1040-NR if applicable). A home-country tax adviser handles home-country filings and reporting. Each adviser sees only half of the picture; coordination prevents double taxation or compliance gaps.

Many cross-border tax mistakes come from US CPAs who do not understand home-country rules, or home-country CAs who do not understand US LLC structures. Two-adviser coordination is the gold standard.

Common areas of friction

Treaty interpretation: each country's tax authority may interpret treaty provisions differently. Specifically, whether US LLC pass-through income is treated as 'business profits' or 'other income' for treaty purposes affects the applicable article and rate.

Transfer pricing: intercompany services agreements between the US LLC and home-country operating entity must be priced at arm's length under both countries' transfer-pricing rules. Documentation matters.

CFC rules: home-country CFC rules may attribute LLC pass-through income to the owner regardless of distribution. India's place-of-effective-management (PoEM) rules, for example, can affect US LLC tax classification.

Home-country reporting of foreign holdings

Many countries require residents to report foreign-held assets above thresholds. India's Schedule FA reporting, US's FBAR (for US persons), Argentina's Bienes Personales, EU member states' beneficial-ownership reporting.

Failure to report foreign holdings often carries penalties separate from underlying tax obligations. Engage the home-country adviser early.