I was asked to implement a project for a Portuguese company. Before we start, they want me to provide a ‘Fiscal certificate of residence from tax authorities’. I have a company in the USA, through which the invoice will be issued, but they still want these documents (which I don’t have - as I don’t pay tax in the US). What can be done here? Has anyone ever had something like this before?
Background: I am from Austria, and as a DN I am currently stateless.
I assume your US company is a passthrough entity (such as a sole-member disregarded LLC)?
While useful for many things, one drawback is that since these are not tax resident in the US unless you are, you can’t claim any treaty benefits with them—at least not directly.
Since you’re not a tax resident anywhere yourself, you’re out of luck. Most likely they’ll have to withhold Portuguese withholding tax on the payments.
In a case like this a corporation would probably be more beneficial as it is a separate legal person that can have a distinct tax residency separate from your non-existing one.