Recently Belize took steps to make Belize IBCs liable for tax in Belize. (Check this article which explains: https://www.dropbox.com/scl/fi/o7395wjgx6ilmle8dcpah/Belize-IBCs-Tax-Position-at-16.10.24.docx?rlkey=0xd4m3sjrmyhu0a5u7isxdrur&st=8eeite23&dl=0 )
But what about Belize LLCs??? Are they liable for tax in Belize?
A Belize LLC must apply for a Tax Identification Number (TIN) using Form 100, selecting the sole proprietorship option assuming it has a single member – which most (smart) Belize LLC owners have ie most clients choose to deploy a Private Foundation to act as shareholder ie to try and avoid CFC rules. (You can view the Form 100 via this Link: https://www.dropbox.com/scl/fi/1spa28x6ain98632wxv13/BTS100-Form-1-3.xlsx?rlkey=nizl6lhq9l0hi9021fuwe6t8p&st=6kgemos9&dl=0 )
LLCs are pass through entities ie they are akin to partnerships and in the case of Partnerships the income is attributed ie “passed through” to the partners/members (ie shareholders) who are liable to declare that income at home ie if they live in a taxable jurisdiction.
At present, where the sole member (ie shareholder) of a Belize LLC is a non-resident and the LLC has no Belize-sourced income, BTSD (the Belize Tax Service Department) has not issued any formal mechanism to attribute or collect tax from the foreign member. Accordingly, while TIN registration is required, there is no current indication that tax would be payable in Belize based on the information provided.
But what does the legislation say?
Section 94 of the recently amended Belizean International Limited Liability Companies Act states:
94.–(1) A limited liability company shall be subject to income tax, business tax, withholding tax, asset tax, gift tax, profits tax, capital gains tax, distributions tax, inheritance tax, estate duty or any other like tax based upon or measured by assets or income originating outside of Belize or in connection with matters of administration that may occur in Belize and the payment of stamp duties.
(2) For the purposes of income and business tax under the Income and Business Tax Act, a limited liability company–
(a) with only a single member, shall be deemed a disregarded entity whose income and receipts shall be deemed the income and receipts of the single member;
(b) with at least two members, shall be taxed as a partnership, unless such limited liability company elects, in the manner prescribed, to be taxed as a company.
If a Belize LLC is deemed a disregarded entity, doesn’t that mean that the income is attributed to the foreign member directly who is not a Belizean tax resident and consequently, should not be liable to pay any tax in Belize?”
This section of the Legislation seems to confirm that Belize LLCs are NOT liable for tax in Belize…
(This guidance is based on current BTSD practice and our understanding as of today’s date ie 3.8.25. We cannot rule out the possibility that BTSD may issue new guidance or take a different position in the future).
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DISCLAIMER: OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.
