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

Is there a US tax treaty with Switzerland?

Yes: the IRS lists Switzerland 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.

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

What we need from an owner in Switzerland

To prepare the filing for an owner in Switzerland, we ask for:

• Your passport and your home address in Switzerland
• Your tax ID: For a resident of Switzerland, this is usually your Old-Age and Survivors' Insurance (AHV/AVS) number, which Switzerland designates as the tax identification number for individuals (OECD tax ID sheet).
• The LLC's formation documents and EIN letter
• Bank and payment account statements for the year, so every transfer between you and the LLC can be listed, converted from Swiss francs where needed

The IRS wants all amounts in US dollars and the same tax ID used every year (IRS).

The legal sources behind this page (Switzerland)

The treaty articles and US provisions this guide relies on.

Treaty

• The IRS lists the 1996 income tax treaty, signed October 2, 1996, amended by a protocol signed September 23, 2009. General effective date (IRS Table 3): treaty Jan. 1, 1998; protocol Jan. 1, 2020 (IRS treaty documents for Switzerland; 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 11 (Interest), on interest.
• Article 12 (Royalties), on royalties.
• Article 23 (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 Switzerland itself also applies to you; check it with a local adviser.