The question arrives in different forms: "My LLC made $300,000 from US customers, what do I owe?" or "I made nothing, why does anyone want a form?" Both come from the same confusion between reporting (Form 5472, always) and tax (Form 1040-NR, sometimes). This guide is about the sometimes.
Two steps
A non-resident is taxed by the US on income that is effectively connected with the conduct of a US trade or business. Step one: is there a US trade or business at all? Step two: if so, which income is connected with it? A disregarded LLC's activity is the owner's activity for this purpose, so the question is really about what the owner is doing through the LLC.
What makes a US trade or business
Regular, continuous and considerable activity in the United States: people doing the work in the US, an office, inventory in a US warehouse, a dependent agent who concludes contracts. The location of customers is not the test; the location of the activity is. A founder in Lagos or Dubai selling software to Americans from a laptop in Lagos or Dubai is doing business in Lagos or Dubai. A founder with stock in an Amazon fulfilment centre and a US-based contractor handling returns is closer to the line, and the IRS has argued both sides of it.
Treaties raise the bar
Residents of a treaty country (India, the UK, Germany, most of Europe, Canada, Australia, and many more) are taxed on business profits only if they have a permanent establishment in the US: a fixed place of business, or an agent who habitually concludes contracts on their behalf. A fulfilment warehouse used only for storage and delivery is generally not a permanent establishment under most treaties. That is a narrower test than trade or business, and it is the reason most treaty-country founders selling into the US owe no US income tax. The UAE has no income tax treaty with the US, so UAE residents are tested on the domestic rule alone.
What changes the answer
- Hiring a US employee, or a US contractor doing the core work rather than peripheral tasks.
- Renting a US office or coworking desk that is used regularly.
- Holding inventory in the US in a way that goes beyond storage and delivery, or through your own facility.
- Providing services physically in the US on visits.
- US rental property, which is taxed on a different basis and usually requires a 1040-NR with the net election.
If you do owe
Form 1040-NR reports the effectively connected income at the same graduated rates a US person pays, with deductions connected to it. It requires an ITIN, obtained with Form W-7. It is due April 15 if you have US wages and June 15 if not, extendable. Withholding by platforms is credited against it. The home country generally gives a credit for the US tax paid.
If you do not
You still file Form 5472 with the pro forma 1120 every year, provide W-9s for the LLC and W-8BENs for yourself, and keep a written note of why the activity is not US-connected, dated, with the facts as they were. Facts change; the note shows what you knew and when.
The check: where, physically, does the work that earns the LLC's revenue happen, and is any of it done by people in the US? Write the answer in two sentences. That is the beginning of the analysis, and often the end of it.