For residents of Iceland who own a US LLC

US LLC Owned From Iceland: Form 5472, Taxes and Filing

A US LLC owned from Iceland has a yearly IRS filing even if it earns nothing in the US. This guide shows the filings, the Icelandic tax ID that goes on Form 5472, and what it means that the US has a tax treaty with Iceland.

Form 5472Pro forma 1120Treaty: yesW-8BENBE-13

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Quick answer

Do I have to file Form 5472 if I live in Iceland and own a US LLC?

Usually yes. The IRS treats a single-member LLC owned from Iceland as a corporation for Form 5472, so any money moving between you and the LLC, including the first deposit, triggers Form 5472 with a pro forma Form 1120. The penalty for missing it is US$25,000. The US has a tax treaty with Iceland; that matters for tax on profits, not for this filing.

Prepared by Illuminous Accounting · Sources checked November 11, 2026

At a glance

Yearly US filing: Form 5472 with a pro forma Form 1120
US tax treaty with Iceland: Yes, per the IRS treaty list
Your home tax ID: Your kennitala (Icelandic Identification Number)
Currency: Convert Icelandic kronur to US dollars; the form is in US dollars
Fees: See our Form 5472 filing service page, or request a quote

Does an LLC owned from Iceland owe a US filing with no income?

The yearly filing for an LLC owned from Iceland is mostly an information return. The LLC usually pays no US income tax as a disregarded entity, but the IRS still wants a record of money and property moving between the LLC and its foreign owner. So the LLC files Form 5472 with a pro forma Form 1120, normally by April 15 for a calendar year, and a missed or substantially incomplete form carries a US$25,000 penalty (IRS).

Two other filings sit around it. Right after formation, a BE-13 is generally due within 45 days (BEA rule). Each year, the formation state has its own report or fee (fees by state). A Form 1040-NR comes in only if the LLC has income effectively connected with a US trade or business (IRS).

Getting your Icelandic owner details ready

About you. Your passport, your address in Iceland and your tax ID. For a resident of Iceland, this is usually your kennitala (Icelandic Identification Number) (OECD tax ID sheet).

About the money. Every amount that moved between you and the LLC in the year, with dates. If you funded the LLC from an account in Icelandic kronur, the statement from that account helps us convert it to US dollars.

About the LLC. Formation papers, the EIN letter and the state where it was formed (state fees).

Is there a US tax treaty with Iceland?

Yes: the IRS lists Iceland among the countries with a US income tax treaty (IRS treaty list). The treaty does not remove Form 5472. What it can change is how much US tax applies to the LLC's profit and to payments you receive.

Question	With the treaty	Source
Is the LLC profit taxed in the US?	Generally only the part attributable to a US permanent establishment, such as an office or dependent agent in the US	Form 8833
Do I have to tell the IRS I rely on that?	Yes, on Form 8833 with the return; not disclosing costs US$1,000	Form 8833
Can I get lower withholding on US dividends, interest or royalties?	You can claim it on Form W-8BEN by naming Iceland; otherwise 30% generally applies	W-8BEN, Pub 515

Treaty benefits depend on the exact article and on whether you qualify under it, so we check the treaty text before relying on it.

Reporting the LLC in Iceland

Icelandic founders use a US LLC to reach US customers for software, tourism-related and design businesses.

We do not advise on the tax law of Iceland. Your local adviser decides how the LLC is reported at home, and we give them the US returns and numbers so both sides match.

How we help Icelandic owners

We prepare Form 5472 and the pro forma Form 1120 for Icelandic owners, and can look after the whole year for a single-member LLC. Gurleen Kaur, CPA licensed in British Columbia and Washington State, signs the filings. Fees are set out on our Form 5472 filing service; request a quote below.

See our Form 5472 filing service, the annual compliance package and which state to form in.

Treaty and US law sources

Where each rule on this page comes from, for an owner resident in Iceland.

Treaty

The IRS lists the 2007 income tax treaty. General effective date (IRS Table 3): treaty Jan. 1, 2009 (IRS treaty documents for Iceland; treaty text; IRS Table 3).
Article 4 (Resident), which decides who counts as a resident for treaty benefits.
Article 5 (Permanent Establishment), which defines a US permanent establishment.
Article 7 (Business Profits), under which business profits are taxed in the US only if attributable to a permanent establishment.
Article 10 (Dividends), on dividends.
Article 12 (Royalties), on royalties.
Article 21 (Limitation on Benefits), which sets the tests a resident must meet to claim benefits.
Article 22 (Relief from Double Taxation), on relief from double taxation.
Treaty benefits for income earned through a fiscally transparent entity, such as a single-member LLC, are decided under section 894 and Treas. Reg. section 1.894-1(d) (IRS Pub 515, Form 8833).

US law

Form 5472: Internal Revenue Code section 6038A and Treas. Reg. section 1.6038A-1; final regulations T.D. 9796 treat a foreign-owned US disregarded entity as a corporation for this purpose (IRS Form 5472 instructions).
US trade or business and effectively connected income: Code sections 864 and 871 (IRS Pub 519).
Treaty disclosure: Code section 6114, Treas. Reg. section 301.6114-1, and the section 6712 penalty (IRS Form 8833).
BE-13: 15 CFR 801.7 (eCFR).

The tax law of Iceland itself also applies to you; check it with a local adviser.

Owners in other countries

Every country page uses the same US rules with that country's treaty status and tax ID. See all of them on US LLC tax by country.

Common questions

I live in Iceland. When is my LLC's Form 5472 due?

With the pro forma Form 1120, normally by April 15 for a calendar-year LLC. Form 7004 extends it. The US$25,000 penalty applies if it is not filed.

Which tax ID from Iceland do you need from me?

Your kennitala (Icelandic Identification Number). The IRS asks for the same foreign tax ID every year.

Does the United States have a tax treaty with Iceland?

Yes. Iceland is on the IRS list of US income tax treaties. The treaty can limit US tax on business profits to profits attributable to a US permanent establishment, a position disclosed on Form 8833, and lets you claim treaty rates on Form W-8BEN.

Will I pay US income tax on my LLC's profit from Iceland?

Usually only Form 5472 with the pro forma Form 1120 is filed. A Form 1040-NR is needed if the LLC has income effectively connected with a US trade or business, and the treaty may limit US tax to profits attributable to a US permanent establishment.

Sources

Every rule and figure on this page links to the IRS, CRA or other official source it comes from. Amounts change; we re-check them before each engagement.

Gurleen Kaur, CPA licensed in British Columbia and Washington State. Last updated November 11, 2026. This page is general information, not tax or legal advice for your situation.

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