By creating a limited liability company, its founders certainly expect to receive a normal and stable income in the future. However, like most other payments, it is tax deductible.
What income is the founder of an LLC entitled to
A participant in a limited liability company has the right to count on receiving a part of the profit from his activities. This profit is paid by the company in the form of dividends. The frequency and timing of the payment of dividends are stipulated by the charter of the LLC, as well as by the internal documents of the enterprise.
Along with participation in an LLC as the owner of corporate rights, the founder (if it is an individual) can also be an employee of the company, holding the position of director or performing other labor duties. In this case, the income of the founder also includes wages, bonuses and other payments equivalent to them.
In addition, the founder, on his own behalf, can conclude a civil contract with the company. Here, the income will be payments made by the LLC under this agreement.
Income of the founder of the LLC and their taxation
Depending on who is a member of the limited liability company (legal entity or individual), the amount of income paid in the form of dividends is subject to income tax or personal income tax. With regard to dividends paid to individuals, the personal income tax rate is 9% (for non-residents - 15%). The same rates are established for the taxation of dividend amounts with income tax. In addition, the legislation establishes cases when there is a zero rate for dividends on income tax.
LLC is the tax agent for the payment of dividends to its founders. At the same time, there is a special formula for calculating the tax amount. It applies to both income tax and personal income tax. Its structure includes the following indicators:
- the ratio between the amount of dividends accrued to a specific founder and the total amount of dividends accrued by the company;
- the applicable rate of income tax or personal income tax;
- the difference between the dividends accrued and received by the LLC.
To obtain the total tax amount, all these values are multiplied among themselves.
When taxing income paid to the founder of an LLC (individual) as wages and remuneration under civil law contracts, the standard rates of personal income tax apply: 13% for residents of the Russian Federation and 30% for non-residents. In this case, LLC will also act as a tax agent.
If the founder of the LLC is a legal entity, then it also has the right to conclude a civil law contract with the company. Here, income tax and VAT will be levied on income paid to the founder.
