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2016-05-28 19:58
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2016-10-11 12:44
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yura-by
2016-10-23 22:59
"Residents however only have to pay taxes on the share of their worldwide income that is remitted to Malta. In effect, this means that income generated abroad by a resident isn?t subject to Maltese taxation if it stays outside the country. It is entirely possible to pay no income tax as a resident of Malta if no income is remitted."
https://www.freedomsurfer.com/malta/
@simon Do I understand correctly that if I'm resident and transfer savings, then I do not need to pay taxes? If yes, at what point income becomes savings? If I transfer income to HK, how long it should be parked there before I transfer money to Malta in order to be considered as savings, not as income?
simon
2016-10-23 23:57
@yura-by It has to stay abroad until the end of the tax year. You can transfer it to Malta any time during the following tax year.
yura-by
2016-10-24 00:02
@simon If I have eg. 50k savings from previous year and 50k income this year, if I transfer less than 50k, then I do not have to pay anything, right?
simon
2016-10-24 03:54
@yura-by As long as you only transfer your savings, you will owe no taxes in Malta.
yura-by
2016-10-24 08:05
@simon thank you
yura-by
2016-10-24 11:06
@simon if I transfer income to HK bank and then use HK bank card to pay for something in Malta or use card in ATM, does it counts as remitted income? Or this applies only to wire transfers?
simon
2016-10-24 19:04
@yura-by Technically it would count but frankly I doubt whether the Maltese government could actually find out. As a non-EU citizen you do need to pay a minimum amount of taxes anyway so I doubt they'd care (around 15k). Unless you were emptying ATMs on a daily basis to bring in large amounts of money in.
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2016-10-27 12:46
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2016-10-29 04:38
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2016-10-29 15:36
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reese
2016-11-03 18:53
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reese
2016-11-03 19:08
Hey @simon I need to receive around $500K from HK.
It appears that HSBC HK won't wire money to a Seychelles/Belize company. So I need to incorporate in a white jurisdiction.
Which jurisdiction would you pick?
p32kz
2016-11-06 12:31
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anna
2016-11-06 21:00
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josh
2016-11-08 10:20
@simon what's the difference (if any) between an LLP in the U.K. and one specifically in Ireland?
simon
2016-11-08 10:34
@josh I'm not personally familiar with the Irish LP. It looks like there might be some potential here. I will look into it. This document is quite interesting: http://www.maplesandcalder.com/fileadmin/uploads/maples/Documents/PDFs/Corporate%20Tax%20Handbook_Irish%20Limited%20Partnerships_%20an%20international%20investment%20platform.pdf
josh
2016-11-08 11:52
It looks like essentially the same thing. But I know a lot of big companies have domiciled there in recent years as well. Looking at the U.K. LLP though it talks about "if your address is in Scotland" or wherever, so made me curious.
darwin
2016-11-08 22:53
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darwin
2016-12-02 00:50
Question: If my Hong Kong Incorporated company doing business primarily with US firms hires my wife in a non customer facing role (e.g. administrative), who is a living in the US on a green card but a citizen of Mexico? To which country does she pay personal income tax? According to PWC, ?Non-residents, including Mexican citizens who can prove residence for tax purposes in a foreign country, are taxed only on their Mexican-source income.? So apparently, not Mexico. But how would you determine which country you paid tax to in an administrative role based outside of the incorporated country?
stoplight
2016-12-02 10:29
Hmm..from my limited understanding of territorial and residential taxation..she is liable for taxes to the U.S. still?I think.
simon
2016-12-02 17:51
@darwin In most likelihood, she is liable for US taxation.
alexanderhay
2016-12-03 15:46
She will clearly owe US taxes based upon the fact that she is living in the USA (tax residence), and she has a green card (legal residence). In fact she will owe US taxes on all income she earns worldwide. As for Mexico that is a bit more complicated, but she may owe taxes in Mexico depending upon ow Mexico categorizes the income.
soebusiness
2016-12-08 10:43
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darwin
2016-12-09 16:47
:fries::heavy_dollar_sign:Amid a European Commission investigation into its tax affairs, McDonald's says it will create a new international holding company in Britain, where it will pay UK tax on non-US royalties. Last year, the European Commission alleged that the company used a loophole in Luxembourg to avoid paying more than $1 billion in taxes.
simon
2016-12-09 18:35
@darwin Nearly every multinationals operating in Europe is using the Luxembourg hack. The EC shouldn't blame them, they would blame the lawmakers who enable this.
alexanderhay
2016-12-09 19:53
Loopholes are just another word for following the law.
mescos
2016-12-11 13:56
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trevorjames
2016-12-13 17:33
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darwin
2016-12-16 17:51
Anyone have any experience using Braintree Payments with a Hong Kong Corporation and HK Bank? Is there any taxation exposure by using a payments service like this with the goal being subject to taxation regulations instead of the US?
stoplight
2016-12-17 01:41
Hey guys, anybody know anyone who can help get me an EIN for my U.S. LLC? There are online services who help non-U.S. citizens/residents like me but I think paying $200-$500 for something that is free is absolutely crazy?anyone?
simon
2016-12-17 01:43
@darwin Using a US-based payment processing service will have no effect on your company's tax status.
simon
2016-12-17 01:45
@stoplight You can get it for free by giving the IRS a call. Or via fax.
josh
2016-12-17 01:45
@stoplight why not just do it online?
stoplight
2016-12-17 01:45
@simon @jase they require an SSN from the person applying for EIN
simon
2016-12-17 01:46
There's a phone line for non-residents
stoplight
2016-12-17 01:48
Yup..aware of that..but a part of the Form SS-4 is under ?7b?..where they request an SSN, ITIN or EIN from the responsible party..unfortunately..I don?t have any of that?
stoplight
2016-12-17 01:49
They do allow ?Nominees? though which can act as people requesting for the EIN?and that?s what these folks providing online EIN services do...
simon
2016-12-17 02:03
I'm pretty sure they accept foreign tax IDs too. I know of many non-US residents who have applied for EINs on their own. I'd recommend giving them a call, worst case scenario you could ask your registered agent to apply for you.
stoplight
2016-12-17 02:04
Ok will try to do that?thanks @simon ..
max
2016-12-19 05:27
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alex
2016-12-28 20:46
I am a little bit confused with residency vs tax residency. If I would get a residency permit in Panama/Georgia/Malaysia/Bulgaria it doesn't mean that I am automatically a tax resident there. Even with a tax ID. In order to qualify as a tax resident I would generally need to physically live there for over 183 days in a year.
Rules governing tax residence:
http://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/tax-residency/
As far as I understand tax authorities in Canada want you to become a tax resident elsewhere, in order for you to become a tax-non-resident in Canada. It looks like it is not enough to simply obtain a residency permit or a long-term visa. One would need to live in a new country and become a tax resident there in order to qualify as a tax-non-resident in Canada (apart from breaking all residential ties with Canada).
So Panama/Georgia/Malaysia/Bulgaria solution is not working for Canadians unless I actually move there? Generally speaking I will be a tax resident in the country where I spend over 183 days otherwise it will be the country of origin - Canada. Am I missing something?
jase
2016-12-28 21:16
Generally you're looking at 2 different things @alex. Panama WANTS you to be a resident there as it likely means you'll be paying them some sort of tax in the future. Canada DOES NOT WANT you to cease being a tax resident, so they require you to prove your tax residency elsewhere.
You have the right grasp of it - most people live in a dream world where they get residency in eg: Panama, spend 2 months a year there and believe that they're all sweet in the eyes of the CRA/tax office of their country of citizenship. They aren't and it's only a matter of time until they're caught.
jase
2016-12-28 21:16
The catch is, it's hard doing it the real way
philippe
2016-12-28 21:20
Even if you don?t have business and dont spend more than 1 or 2 month n your country of citizenship ?
sherice
2016-12-29 04:18
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scorps
2016-12-29 04:19
@philippe Putting aside the first 3 year exemptions, do you know if Chile taxes a foreign business (that was incorporated outside of Chile) but being managed/controlled in Chile? All income comes from outside of Chile.
philippe
2016-12-29 08:57
Simon lists Chile as non cfc on the website but a comment says it changed. I asked about it in the residency channel.
scorps
2016-12-29 09:45
Good to know! Thanks.
scorps
2016-12-29 09:51
It seems that Colombia may soon be off the non CFC list as well.
scorps
2016-12-29 10:03
philippe
2016-12-29 10:16
@simon, what is your take on this?
americanomad
2016-12-31 00:08
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simon
2016-12-31 13:58
@philippe The Chilean CFC rules only apply to passive income, and only when the company is registered in a low or no tax country. OECD-registered companies are exempt. New residents benefiting from the foreign-tax exemption will still be able to receive income from a CFC tax-free.
petrsuska
2017-01-02 12:29
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dawn
2017-01-02 21:59
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tal
2017-01-03 17:40
Hello
I run a small Amazon FBA business and trying to minimize corporate and individual taxes.
I am considering Panama and Estonia. Panama is marked as a tax haven and as such can give difficulty operating in various ways. Estonia sounds great but impose a 20% tax on distributed profits.
I am considering being a resident of Mexico, so looking for the best solution.
What are your thoughts on these two options? any other ideas?
max
2017-01-05 12:16
HI @tal , I am also looking into Panama <=> Estonia combo setup. My understanding is that you would apply for Panama via establishing economic link first which would be an IBC. Next I would look into transfer pricing options as well as paying myself salary which is an option to a certain limit.
alexanderhay
2017-01-05 16:26
@tal, The way the Estonian company was designed to be used was as a Payment Agent. You would set up a non-taxable company in a jurisdiction like Belize (where actually doing transactions is rather difficult). You would then use the Estonian company as a Payment Agent which keeps 5% of the funds and forwards the rest to the Principal (the Belize IBC). From the 5% you pay the fees to maintain the Estonian company which is not small. If there is any left over you leave it there and there will be no taxes. This system works quite well to get access to Europe and various payment systems. The same can be done with most other friendly countries. The problem with Estonia is that it is a lot more expensive and complicated than other options, but well worth it if you do enough business in Europe. If not there are often more cost effective options. For instance, I like using a US LLC treated as a 'taxable association' to be the Payment Agent. It is much easier and cheaper than an Estonian company (unless you need to get access to Europe in which case its pointless). Then the Payment Agent sends 95% of the funds to a non-taxable structure. There are many affordable options here. Oddly enough the US offers just such an option: the US LLC treated as a "disregarded entity" owned by a non-resident individual or a trust properly set up. If you want to do it right you are going to have to invest in a bit of complexity no matter where you go.
tkrunning
2017-01-05 20:51
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2017-01-08 21:40
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mescos
2017-01-09 10:25
@darwin - Does the BVI entity need a bank account? If so, which bank would you use?
saskia
2017-01-09 11:41
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saskia
2017-01-09 12:53
Hey guys! So I'm looking to find the most efficient and reliable tax structure. I'm taking a new job that is full time and remote (from the US) but I don't really live anywhere. I have been based in parts of Asia, Europe and Australia for the past 5 years or so freelancing. I'm in a good position to minimise tax but just wondering the best way to go about it. My company is currently registered in the UK but can close that too. I'll have some continuing invoices from Australia and Sweden. Any advice on what I should do, or consider? Thank you in advance!
jase
2017-01-09 13:08
Hey @saskia as a NZ citizen you have a lot of similarities to me (an ex Aussie resident). Your biggest hurdle is in getting residency in a low, no or territorial taxation country.
saskia
2017-01-09 13:24
Yes exactly! What have you done @jase ? are you set up somewhere pretty efficient? I think something that is interesting is that a lot of these countries don't tax your international income but I need to figure out the non-habitual rules
jase
2017-01-09 13:28
You will need to become a non-resident for tax purposes in NZ, which mostly involves having a permanent home in another country and severing as many ties (electoral role, bank accounts, driver's license) as possible to NZ.
jase
2017-01-09 13:28
You may find this interesting: http://www.lifeofliquidity.com/tax-haven-residency/
jase
2017-01-09 13:29
Its in no way an exhaustive list of countries though. Just some examples.
simon
2017-01-09 13:48
@saskia As @jase said, a low/no-tax residency is a must. As for your company, you could register a UK LLP once you have the residency taken care of. Nearly the same benefits as with a normal UK LTD but with pass-through taxation. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/323787/hs380.pdf
saskia
2017-01-09 14:49
I haven't lived in NZ for about 10 years, and I haven't lived in Australia for about 5 years (as that was my country after NZ). I also have a Netherlands passport, if that helps me at all!
saskia
2017-01-09 14:50
And thanks @simon - I already have a UK LLP registered. I spke to my UK accountant who said it was completly confusing to have a company in the UK, being paid from the US, and living in another country. Maybe it's not so bad? Would there be good accountants in the UK who specialise in this sort of set up? Thanks again!
saskia
2017-01-09 14:54
@jase great resource! This was interesting - "New Zealand offers a four year tax exemption on foreign income for new migrants and returning citizens" although I'd have to gain residency by living there, right?
jase
2017-01-09 16:46
@saskia you'd have to become a resident again (easy to do).
saskia
2017-01-10 00:15
@jase Ok I see! So the only way to gain residency somewhere, really, is to spend 183 days there in one year? I?d have to do that in the first year?
stoplight
2017-01-10 02:35
hi @saskia ..aside from the website that jase gave, there are also countries you can consider to gain residency?depending where you want to be located of course?
https://en.wikipedia.org/wiki/International_taxation#Individuals
stoplight
2017-01-10 02:42
One of your options is to open up a UAE company?and get residency there as well?some costs to it though but you definitely pay zero tax for sure?and you may have to visit the UAE every six months to keep your residency active?
stoplight
2017-01-10 02:45
another option which many have done is to establish residency in one of the Latin American countries with territorial taxation?such as Panama, Paraguay, Costa Rica, Nicaragua?downside..you may actually have to live there for a few months plus you have to learn some Spanish...
jase
2017-01-10 06:56
Hey @saskia the problem you will have as a NZ resident is not getting new residency but losing your NZ tax residency.
jase
2017-01-10 06:57
Relatively speaking it is easy to get residency, because your new government gets fee payments and maybe some tax out of the deal. They want you, so they make it easy.
jase
2017-01-10 06:58
NZ is losing that revenue, yet you are still a citizen and have certain claims to health care/pension/etc. So you have to prove to them that you are a genuine resident elsewhere.
simon
2017-01-10 07:01
@saskia Compliance for a non-resident UK LLP is fairly straightforward and there are several accounting firms that can handle that for you. RHJ is Sheffield is one that I know of (+44 114 227 0070). In any cases, if you have one already registered I'd recommend keeping it active even if you do not use it. Opening a bank account in the UK for such a company has become fairly hard for non-residents. Having one already could come in handy in the future for you.
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2017-01-10 13:24
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saskia
2017-01-20 09:35
Thanks @simon ! I'll definitely give them a call to see if thy can help
saskia
2017-01-20 09:36
@jase thanks so much for the info! I just looked it up and foreign employment income isn't part of the tax exemption unfortunately. Would have been a great option :)
saskia
2017-01-20 09:37
"These types of foreign income are not tax exempt in New Zealand:
Employment income from overseas employment performed while living in New Zealand.
Business income relating to services performed offshore."
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2017-01-21 17:55
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hhenrikson
2017-01-23 09:29
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saskia
2017-01-23 09:35
Hey guys, just to revisit some questions I have since I still haven't found a solution! Nz isn't an option for me currently. Does anyone know about Portugal? I have read about their non habitual tax program that doesn't tax on foreign income?
el_roberto
2017-01-23 13:11
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foreverlearning
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tatelev
2017-01-25 15:27
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tkrunning
2017-01-25 19:56
I think that program requires that the income is taxed at source to give an exemption, but I might have misunderstood how it works. Also not sure how it works in practice. Portugal is a lovely country, though :slightly_smiling_face:
tatelev
2017-01-25 21:31
hi, my first question to the group? :slightly_smiling_face:
tatelev
2017-01-25 21:32
I live in Spain(and I am spanish). I registered a Limited Company in UK for operating an importing business where I will import mainly into USA and UK and sell mainly in Amazon USA and Amazon UK(potentially also rest of Europe)
I haven?t yet started selling, though my goods are already in USA and UK ready to be sent to Amazon.
I haven?t had any income or sales in my UK company yet, just business expenses.
So with my current setup, the UK company will be the one operating in UK and USA and from what I understand all the income will need to be reported to UK tax authories.
Since I reside and operate the business from Spain my UK company is technically tax resident in Spain, so technically I must also file taxes for my companies income(weather I am willing to do it that is a different story)
I started reading about tax advantages of UK Limited Partnership for non-uk residents and tax advantages of USA LLC for non-us residents. I don?t think my Limited Company has those same advantages.
So I started thinking that maybe my current structure is not so advantageous and it could even turn up to be a burden so I would like to get input on weather I should consider changing my business structure to be more tax efficient/advantageous, and if so, what would be the best timing to do these changes.
Thanks for any input/ideas!
jase
2017-01-26 14:02
Not advice but on face value I'd ask why you need 2 companies to start, especially if they aren't turning profits. It's twice the cost.
tatelev
2017-01-26 15:47
well I am not saying I need the 2 companies. That?s precisely what I am trying to figure out.
tatelev
2017-01-26 15:48
however, there are several factors that come to mind? u.s and uk markets are very different, their tax systems are different...
tatelev
2017-01-26 15:49
some business decisions might be wise to do them as early as possible, without waiting for business to be profitable. Some of those decisions might be very hard to revert in the future
tatelev
2017-01-26 15:52
Anyway, I described my complex conundrum to see if anybody can point out any idea :slightly_smiling_face:
tatelev
2017-01-26 15:54
@jase I welcome any comment, so thanks for yours
stoplight
2017-01-27 08:05
@tatelev ?just an inquiry?as i?m not too familiar with Amazon?s rules & regulations?how big is the difference if you used a Spanish company, a UK LLP or US LLC tax wise? Agree, there are a lot of advantages for non-residents for both UK LLP and US LLC?.but tax reporting are different as well?you may think of considering opening up either as it may be cheaper for you in the long run rather than use your current Ltd. Company?.since you haven?t started any actual income or sales activity yet, you can still register a new LLC or LLP?which won?t cost you much?you can do either of the two for less than $200?a Wyoming LLC is more secure compared to the other states, identity wise anyway?you also need to consider the costs involved with annual tax reporting for either?there are some company registrars that specialize with online sellers?so they normally have complete packages for them?.sometimes with an end-to-end solution even?.registration, website, merchant account, auditing, etc.?..maybe you can consult with those as well.
tatelev
2017-01-27 08:10
the main reasons why I decided NOT to register the company have to do with how backwards the whole entrepreneur and tax system is in Spain
tatelev
2017-01-27 08:10
they are in the stone ages both in infraestructure but specially in mentality
tatelev
2017-01-27 08:11
at the start of everything when I went to enquire about setting my company in Spain all were hurdles
tatelev
2017-01-27 08:11
you should have seent the faces of the state employees I talked to
tatelev
2017-01-27 08:12
and these are the people that are most versed in company structure matters
tatelev
2017-01-27 08:13
also try to find an accountant in Spain that does not use Excel and that uses instead more sophisticated cloud accounting platforms that integrate with Amazon like Xero
tatelev
2017-01-27 08:14
also in Spain, since the moment you set your small company you have to pay like 250 euros per month, irrespective of weather you have any activity
tatelev
2017-01-27 08:15
many things are hurdles, and the whole ?purely online? business models will not be understood in Spain until in like 5 years from now
tatelev
2017-01-27 08:16
to add on top of that, I have plans to move out of Spain in 1-2 years :slightly_smiling_face:
tatelev
2017-01-27 08:17
I did some research at that time and UK seemed like an attractive option to overcome all those hurdles
tatelev
2017-01-27 08:17
I am not saying I chose well, just wanted to give a bit of context :slightly_smiling_face:
stoplight
2017-01-27 08:18
well if you put it that way?then you made the right move then! :smile:
stoplight
2017-01-27 08:20
You should definitely consider using either an LLC or LLP then?and if you?re moving out of Spain?then move to a location where you can maximize tax advantages...
tatelev
2017-01-27 08:20
My wife and me know already we?ll move to Canada, it?s decided
tatelev
2017-01-27 08:22
so I have to urgently figure out how to operate in Amazon USA. I expect 80% of my sales to be made in USA
tatelev
2017-01-27 08:23
several question marks and there are conflicting(and opposing) interpretation of different aspects of the US taxing by different tax attorneys
tatelev
2017-01-27 08:23
very confusing, at least to me
tatelev
2017-01-27 08:25
If I would register an LLC as a non-resident individual and operate in Amazon USA through that LLC there is not consensus among attorneys weather I would have to file us income tax
tatelev
2017-01-27 08:25
some say yes, some say no
tatelev
2017-01-27 08:27
also I?m very interested in taking into the ecuation the consideration that it looks like I?ll end up living in Canada in 1-2 years, so anything I do/set up has to be looked at also from the point of view of how the canadian tax authorities would see my incomes
tatelev
2017-01-27 08:27
(or not see them :slightly_smiling_face: )
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2017-01-27 08:35
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stoplight
2017-01-27 08:54
Hmm?well?here?s a scenario you can do?if you can keep your Spanish residency for the US LLC?and run the entire business from Canada?then you don?t really have to do any relevant changes for Amazon USA?as they will consider you to be a resident of Spain?you can have a forwarding/correspondence address in Spain?(some say the Canary Islands are good for that added security really don?t know why) ?while you?re enjoying Canada?tax free?.of course?if you want to severe ties with Spain and make Canada you?re homebase..well they do have tax agreements with the US or even UK for that matter?not too familiar with the details?but either way?that can be a potential headache?instead of just worrying about your annual reporting to US authorities?you may have to worry about Canadian authorities as well?.best scenario in my opinion is to keep the Spanish residency?and enjoy Canada?have an offline job there to satisfy Canadian authorities?and keep your online business off the Canadian books?.
stoplight
2017-01-27 09:02
With regards to filing US taxes?you can get away with not reporting..but you may have potential problems later on?I have a US LLC myself?had it for years...but I don?t do business in the U.S?.or with U.S. persons for that matter so?I don?t do annual reporting at all?aside from the FBAR reports....if you have more than $10,000 in a foreign bank..you ?should? report it to the U.S?.another bank account with constant low balance remedies this situation?.but in your case you will be doing business with US clients?suggest to file taxes just to be safe and so that Amazon doesn?t give you crap later on?.just hire an accountant that specializes on online businesses?they?re known to maximize things and pay the least amount of taxes..
stoplight
2017-01-27 09:06
Here?s a free course on Coursera than i?m currently taking as well?it?s a nice way to study how the big multinationals are doing things and?how small people like us can implement our own structures.. :wink:
https://www.coursera.org/learn/international-taxation
tatelev
2017-01-27 09:28
"if you can keep your Spanish residency for the US LLC? -> Do you mean that I register now the US LLC while I am resident(and can prove it) of Spain, and later when I move to Canada not update in the US LLC register that I have moved?
tatelev
2017-01-27 09:29
not sure what advantage I would get from doing that
tatelev
2017-01-27 09:33
for what I know, Spain would consider my US LLC as a spanish tax resident company if I legally reside in Spain where Canada would consider my US LLC as tax resident company of Canada if I legally reside in Canada
tatelev
2017-01-27 09:35
If I keep the US LLC off the hook, apart from risking that one day USA discloses this information(i.e if they end up joining the CRS) to the country where I reside, it will also be hard to wire me a regular salary without raising suspicions I think
simon
2017-01-27 09:36
@tatelev A US LLC is a disregarded entity for tax purposes (it does not have a tax residency). You pay taxes at the personal level, where you live (in most cases).
tatelev
2017-01-27 09:37
yes, it is a disregarded entity in the US
tatelev
2017-01-27 09:37
but if you reside in another country, that country maybe can consider it a corporation?
simon
2017-01-27 09:47
This depends on the tax treaties in place.
tatelev
2017-01-27 09:50
"The Canada Revenue Agency?s (?CRA?) long-standing position is that a US LLC is a non-resident corporation for Canadian tax purposes notwithstanding the US does not treat a US LLC as a corporation"
tatelev
2017-01-27 09:52
what I understand from this reading is that it?s the canadian tax authorities that unilaterlay decide how to consider a us LLC and that they indeed decide to treat it as a corporation
simon
2017-01-27 09:55
It's decided by the tax treaties in force, for example: https://www.irs.gov/pub/irs-utl/us_spain_agreement.pdf
tatelev
2017-01-27 10:01
my point was that Canada considers a US LLC owned by a canadian resident as a corporation
tatelev
2017-01-27 10:02
at least that?s what I understand
simon
2017-01-27 10:20
It's important to be careful though, especially in Canada where there's an added level of complexity (the provinces). Speaking of which, do you know which province you will live in? The tax rates are fairly low for small businesses in many of the provinces (in Manitoba it's 0% up to around 450k).
tatelev
2017-01-27 10:25
BC
tatelev
2017-01-27 10:26
yeah, the more I think about it the more complex it gets! LOL
stoplight
2017-01-27 16:47
Oh definitely..it gets more complex as you implement things?you are doing cross border business after all.. :smile: ?bottomline..I go with Simon on this?.find out which will have the cheapest tax rates for you?maybe you will be better off with putting up a small business later on than keeping a US LLC or the UK Ltd. Co?if it merits a lower tax burden?.
726dbr
2017-01-28 07:05
has joined #taxation-personal
wojtek
2017-01-28 15:58
has joined #taxation-personal
clr
2017-01-30 00:33
has joined #taxation-personal
philippe
2017-01-30 12:00
check this talk (or the medium article with the same title) https://www.youtube.com/watch?v=h8jlUM4dc28
philippe
2017-01-30 12:40
?If you look at all the countries in Europe, you?ll find things that work really well, and things that are terrible. For example, a lot of countries in Europe have horrible corporate law systems. Investing in a company in France is a mountain of paperwork, it?s diabolical. And it?s like that in a lot of European countries. But not in the UK. In London, the rules and the procedures are so simple, it?s the best designed corporate law in Europe, in my opinion. So why would anyone want to open a purely local company? This is the same reason why every corporation in the United States is incorporated in Delaware. And we can do the same sort of thing in Europe.
Now, there are tax implications and all sorts of other things to think about???but that?s ok, you pay your tax where you live, it?s part of the deal. But just because you pay your taxes in France or Spain, doesn?t mean that you have to do everything in that country.?
https://salon.thefamily.co/europe-i-love-you-85540229db76#.6om90zw47
tatelev
2017-02-01 16:46
so from the point of view of being considered a canadian resident, I need to figure out if there will be any advantage to any of the 2 options(operating a US vs. a UK company)
tatelev
2017-02-01 16:47
where should I look?
tatelev
2017-02-01 16:47
or who should I talk to?
tatelev
2017-02-01 16:48
I think one of the keys is the tax treaties and I read this:
tatelev
2017-02-01 16:49
in that article it says ?Canada will deem a foreign corporation to be resident in Canada if it is centrally managed and controlled in Canada subject to any overriding treaty provision. The Canada-U.S. Treaty will deem a C
Corp or an S Corp (by way of administrative concession by Canada) to be resident only in the U.S. by virtue of its incorporation in the U.S."
tatelev
2017-02-01 16:50
does this mean that a US company will NOT be considered Canada Tax resident even if I reside and control it from Canada?
tatelev
2017-02-03 10:34
question: how likely is it that Spain will find out that I am the sole director and shareholder of a UK company?
tatelev
2017-02-03 10:35
Is it very unrealistic to think that I will be able to manage the UK company remotely(business bank account is in London) file UK corporate taxes as any other UK company and not tell anything about it to the spanish tax authorities?
tatelev
2017-02-03 10:36
there is this concept of the ?mind and management? which in my case makes my UK company a tax resident in Spain from the point of view of the spanish tax authorities
tatelev
2017-02-03 10:37
so technically I would have to tell, and liable to spanish corporate taxes and social security monthly contributions as well
tatelev
2017-02-03 10:37
but how likely is that they will find out if I don?t tell?
tatelev
2017-02-03 10:38
and is this going to change with the CRS system that will start making countries share all the banking info automatically soon?
jase
2017-02-03 10:43
Follow up question: If it was "unlikely" - a 20% chance that you could get caught, would you be OK with that? Will you save for that rainy day when it catches up with you?
jase
2017-02-03 10:44
My view is that if the country where you live is broke, they'll find out eventually.
philippe
2017-02-03 11:29
Just move to Malta or Andorra ^^
rjmarsden
2017-02-03 12:02
hi @tatelev I would the chances are fairly high because Spain and the UK are very sharing when it comes to taxes and social security e.t.c. A lot of brits go to Spain for different reasons, and as such there is a lot of info exchange going on. I know of a couple of examples where circumstances changed tax wise in the uk, and the spanish knew about it within days.
tatelev
2017-02-03 12:05
I plan to move to Canada in 1-2 years
tatelev
2017-02-03 12:06
I think canadians have a much more sophisticated tax enforcement system
tatelev
2017-02-03 12:07
I'm just trying to asess the risk for these next 1-2 years, then I'm gone
tatelev
2017-02-03 12:07
In Canada I wouldn't even think of not disclosing it
tatelev
2017-02-03 12:09
It just feels really awcward to have give explanations to the state that put me so many hurdles to form my company:disappointed:
tatelev
2017-02-03 12:12
I might have made wrong asumptions when I researched like a year ago and I figured that the risk of spanish tax man making the link was almost nil
jb
2017-02-03 14:05
has joined #taxation-personal
jb
2017-02-03 14:13
Hi all! New here, I perform remote contract work (web dev) and I'm thinking of becoming a resident of Dubai to reduce my taxes. Other than forming a company to gain residency are there any hidden expenses that may not be apparent initially? Can anyone recommend a few (cheapish) options for getting residency? I have a high-ish income but not much capital at moment due to paying off debt and taxes owed.
simon
2017-02-03 15:08
@jb Not really a "hidden" expense but to keep the residency active you need to enter the UAE once every six months. Depending on where you live, this may be more a time issue than a money one. Also, you need to be aware that becoming a resident of the UAE will not necessarily result in you becoming a tax resident of the UAE.
jb
2017-02-03 15:22
@simon Yes I noticed the 6 month thing, probably not a deal breaker. Can you elaborate on the last part? UAE has a tax treaty with my current tax residence so if I read that correctly as long as I maintain an apartment in the UAE and don't spend a year in my home country I should hopefully be considered a resident in UAE.
simon
2017-02-03 15:38
@jb You simply need to avoid becoming a tax resident elsewhere. This usually means that you should spend less than 183 days in any given country during a tax year (even if only a tourist).
jb
2017-02-03 15:40
Ah right - forgot to mention that is what I was intending to do, travel around various countries that offer visa free periods or self employed visas. Thanks for the input - do you know the rough costs to gain residency?
jb
2017-02-03 15:40
One of your articles mentions about $3000 a yr including compliance, to form a company
stoplight
2017-02-03 16:14
@jb There are several new free zones aside from the popular RAK zone?and the average cost would be around $2000-3000 per year?.the really good ones are the ones that don?t require capital and annual auditing as well?
jb
2017-02-03 16:16
@stoplight $2-3000 per year would be amazing - I did a quick google and found a few but the fees were closer to $10k per year. Do you know of any you could link?
stoplight
2017-02-03 16:17
I?ll rummage over my notes later?just finishing some emails and will get back to you? :slightly_smiling_face:
stoplight
2017-02-03 16:28
@jb couldn?t find my exact notes on the new UAE free zones?there?s more than 50 I think now?i?m sure google will know more?but you can try getting in touch with these guys as well? http://www.fbsemirates.com/ ?they have low prices?not too sure if they have hidden charges..worth a try..
jb
2017-02-03 16:33
@stoplight Thanks, will send them an email, I also contacted a lawyer, but I think his fees will be cost prohibitive
wojtek
2017-02-04 03:06
I paid 4500$ to set it up, 900$ a year fix costs, no tax, no accounting, Seychelles .. worked very well for the last four years, now the bank in Cyprus asks for more paperwork ..
stoplight
2017-02-04 09:00
@jb lawyers can both be cheaper or expensive depending on how you talk to them. Maybe you can use the different information you find online to leverage with the lawyer.
@wojtek several years ago?a Seychelles company would have been ok but nowadays with all these ?leaks? coming out left and right...tax haven companies from small islands are getting so much bad rep that its getting difficult to use them. By far, because of its reputation as well...UAE companies are still the best to showcase a tax free company plus a tax free residency as well and of course, all the big banks are there too?
jb
2017-02-04 10:06
Are there any major disadvantages to incorporating in UAE? It seems ideal, even If I just operate as an individual and only use the company to gain residency then I would still pay 0% tax, the yearly fees look low enough that my savings on yearly accounting fees would almost make up for it.
wojtek
2017-02-06 01:00
well I do not care about the reputation as long as it works and everything is legal
stoplight
2017-02-06 06:17
@jb if you can go over the annual costs of maintaining a UAE company and traveling there regularly to keep the residency then there aren?t really any major disadvantages. Literally, thousands of big and small companies are now shifting their operations to the UAE to safeguard against CRS/AEOI.
arkdeeplove
2017-02-06 08:25
Hey @simon, @stoplight: It is necessary to maintain an apartment in UAE?
Or it?s ok only to visit UAE 2 times a year?
scorps
2017-02-06 08:33
There are 3 main ways to become a UAE resident: 1) purchase real estate property above certain $ threshold 2) register your own company in UAE 3) Obtain residency through employment.
jb
2017-02-06 08:41
@arkdeeplove Maintianing an apartment will depend on where you travel to and for how long: It's usually used as a tie breaker in tax treaties, but if you don't stay anywhere else long enough to be a tax resident I doubt it will be an issue
jb
2017-02-06 08:43
However from what I have seen a lot, if not most rentals are 1 year paid yearly :disappointed:
jb
2017-02-06 12:38
Does anyone here know if Estonia has any sort of "substance" or "attribution of personal services" type laws? In New Zealand if a company has derived more than 80% of it's income from personal services provided by a single source it is taxed at the personal tax rate. I know some other countries have substance laws which allows the tax department to rule that a company is actually an independent entrepreneur for example
wojtek
2017-02-07 02:29
I can ask I have a lot of friends with companies there if you need it
jb
2017-02-07 07:01
@wojtek That would be great if you could - I'm looking at forming a company there. I'm guessing it probably doesn't otherwise the LeapIN service would be useless, but it pays to check these things!
jb
2017-02-07 10:11
Is there a general rule for what foreign sourced income means? Regarding employment I assume it to mean employment income generated while working outside of the country, but from reading online a lot of people seem to think it means employment income provided by a foreign company even if you are in the country.
jb
2017-02-07 10:12
E.g. a tax resident of Uruguay would be taxed if they were physically in Uruguay but working for a foreign company. However if they were tax resident in Uruguay and working in another country for a foreign company then they would not be taxed in Uruguay.
stoplight
2017-02-07 12:10
@arkdeeplove generally..if you maintain your permanent resident status properly?visiting twice a year?at least stay for a few weeks every 6 months?then it shouldn?t be a major concern?that is if you don?t need a tax certificate then no need for an apartment?but if you would need a certificate that you are now a tax resident of the UAE?.well then that is one of the requirements needed to get a tax domicile certificate to show to your current country that you are now ?living? in the UAE.
arkdeeplove
2017-02-07 12:12
I understand. Thank you very much for the input
I think I will bypass the UAE, because of a minimum 16k capital
stoplight
2017-02-07 12:13
There are some free zones that don?t require capital..or annual audit as well?you can maintain a flexi-desk?and rent a cheap apartment...
stoplight
2017-02-07 12:15
although from what I understand...for the tax certificate issuance...you may at some point have to live in the UAE for 180 days to get one...
jb
2017-02-07 12:30
Yep tax certificate lasts one year, and you need to be in UAE for 183 days per year to qualify, not as attractive as it first seems. Plus there's the cost of forming a free zone company which is at least $7k (including residency) for a free zone that doesn't have a high minimum capital requirement, and another $5k+ per year...
stoplight
2017-02-07 12:38
changing tax domiciles is always a tedious and complicated process.?but theoretically?once you are able to prove this to your current country?it can be smooth sailing in the years to come?again?the bottomline would have to be what kind of requirements would your current country require?would it take just one tax certificate? so a 6-month sacrifice in the UAE isn?t too bad?could be a bit expensive though?but if you need to provide an annual tax certificate to your home country?well?another story altogether..
gbennett
2017-02-08 02:38
has joined #taxation-personal
danz
2017-02-08 17:42
@jb, UAE is a good choice. I have set it up last year and could recommend a company if you need one. Cost around ?3.000 to set it up.
jb
2017-02-08 21:08
@danz That would be useful thanks
stoplight
2017-02-09 02:14
@danz did that include visa as well?
danz
2017-02-09 05:47
@stoplight, no.
alexanderhay
2017-02-09 14:21
mysteir
2017-02-10 04:48
has joined #taxation-personal
nemo
2017-02-10 13:07
has joined #taxation-personal
tatelev
2017-02-13 23:39
interesting reading: http://www.the-best-of-both-worlds.com/support-files/oecd-crs-loopholes-report.pdf
philippe
2017-02-14 04:15
jb: @simon ?
simon
2017-02-15 07:25
@jb No, Estonia has no such rules.
tatelev
2017-02-15 13:00
I might be confused about something and I hope somebody can clear it up for me. If I live in Spain, no matter in what country I have my company or what structure it is, spanish tax authorities will consider it a spanish tax resident company for corporation tax purposes? Or does this depend on the tax treaty between Spain and my company?s incorporation country?
simon
2017-02-15 13:04
No it won't automatically be considered resident in Spain. If it's an EU company it will be resident of the country in which it is registered (as per treaty rules), if it's registered elsewhere it will depend on the company's tax status in that country (resident vs non-resident), where it conducts business etc.
tatelev
2017-02-15 13:05
sorry, I forgot to mention a key issue, I will rephrase
tatelev
2017-02-15 13:05
actually I didn?t, that?s what I wanted to say :slightly_smiling_face:
tatelev
2017-02-15 13:05
but...
tatelev
2017-02-15 13:06
at least in the case of my current UK company, because of a tax treaty Spain-UK and because I manage it from Spain, Spain and UK agree to treat it as a spanish tax resident
tatelev
2017-02-15 13:06
(so I?ve been told)
tatelev
2017-02-15 13:07
seems to be the case also in Canada
tatelev
2017-02-15 13:08
so what you said, @simon didn?t clear it up for me. I?m still confused :disappointed:
simon
2017-02-15 13:20
A UK company is always automatically considered resident for taxation purposes regardless of where it is managed from (FA 1988, s 66(1)). Unless you ask for an exemption to prevent double taxation which is probably what happened in your case (FA 1994, s 249(1), UK-Spain tax treaty).
tatelev
2017-02-15 13:35
I was told that my UK company is considered resident both by Spain and by UK
tatelev
2017-02-15 13:36
And in order to avoid double taxation, the tax treaty woul break the tie in favor of Spain
simon
2017-02-15 13:42
Yes, as per the conditions specified in the second part of the UK tax code I referenced above. To go back to your original question, Spain doesn't get to choose whether a foreign company is resident or not. What it get to choose is whether it will tax that foreign company as if it was resident. It then becomes a matter of looking at treaties to see whether you can get relief from double taxation or if you have to pay in both the registration country and Spain.
simon
2017-02-15 13:43
Sometimes you can also get a tax credit in Spain if you paid taxes in a foreign country.
tatelev
2017-02-15 14:09
we seem to be going in circles
tatelev
2017-02-15 14:09
I already knew that Spain considers my UK company as spanish tax resident
tatelev
2017-02-15 14:10
my original question was weather this will happen no matter where my company is incorporated in
tatelev
2017-02-15 14:11
will Spain always consider a foreign company that is managed from Spain by a spanish resident as spanish tax resident irrespective of what country that company is incorporated in?
tatelev
2017-02-15 14:18
(forgive me if I am using any terms incorrectly. As I said I am trying to understand some basic concept first which might be obvious to many here but not for me)
simon
2017-02-15 14:27
Ah I think I understand what you mean. "As a resident of Spain, is the situation hopeless?" I can't offer a blanket answer but most likely yes, you will have to pay Spanish corporate taxes.
tatelev
2017-02-15 14:29
sucks
tatelev
2017-02-15 14:31
if I understand correctly, the risk of Spain authorities knowing without me telling comes not from the incorportated country telling Spain but from its bank, right?
tatelev
2017-02-15 14:32
it?s the banks from mostly any country that are starting or will soon automatically exchange data from each bank account(CRS)
tatelev
2017-02-15 14:34
what I?m trying to get to? is that a company is a separate entity from its director? what Spain will find out is not that I own a company in UK, but rather that a business bank account is open in my name in UK, correct?
tatelev
2017-02-15 14:35
It sucks that I cannot just choose to pay the corporation?s tax in the country that I chose to incorporate in
tatelev
2017-02-15 14:35
hopefully there is a way
tatelev
2017-02-15 14:35
any suggestions are welcome
jamief
2017-02-17 09:52
has joined #taxation-personal
arkdeeplove
2017-02-17 20:54
Hi @simon,
I was looking at LeapIn to form an Estionian company and I wanted to know if I opt in for receiveing dividends from Estionian Company. There are any taxes I should pay to Estonian Gouverment?
djoneverett
2017-02-25 05:47
I'm a US citizen & perpetual traveler. I need some clarification on how prorating the FEIE works.
In early 2016 I was unaware of the FEIE. As such I spent 2 months in the USA, then left the USA on 16 August. That means between 17-08-2016 and 16-08-2016 I can only spend a total of 35 days in the USA to qualify for FEIE.
The bit that is confusing me is that period spans 2 tax years and although I intend to stick to it I've not completed it yet.
On my 2016 taxes, am I still able to claim a prorated FEIE for 17-08-2016 thru year end, based on my intent to stay outside the USA in 2017?
ivopalazzi
2017-03-01 17:53
has joined #taxation-personal
ivopalazzi
2017-03-01 17:57
Hello, I am a spanish citizen with residence in Malta. I want to open an offshore business, what is the best alternative? I have an online business, and wouldn´t like to do accounting or other stuff. I find lateley I have been investing more time in how to pay less taxes than running my business. I also would like it to be relatively easy to open business accounts under that company. Any suggestions? Thankyou
tkrunning
2017-03-04 02:36
Hi guys! A friend of mine who moved to the US last year (O-1 visa), recently realized that he has ended up in a weird tax situation? So I wonder if anyone in here would have some advice, or maybe point me in the right direction to read more up on the applicable US regulation.
This is his situation: He previously co-founded a startup in Norway, and he has a holding company that own his shares in the startup. Over the last few years his holding company has been receiving sizable dividends from the startup. But now that he moved to the US to work on a different company, the US will apparently tax him 40% on the dividends his holding company received last year (and any year in the future, as long as he stays in the US). But the way this works on the Norwegian side is that the holding company does not pay tax on the dividends, since it owns more than 10% of the startup, but any distribution from the holding company to my friend would obviously be taxed as capital gains.
But since the US counts the distribution to the holding company as personal income for my friend (which it?s really not), then he has to take a dividend from the holding company to pay the tax?resulting in him being taxed yet again for capital gains. And as far as I understood, the DTA between the US and Norway won?t apply in this case, either? I?m pretty amazed at the ridiculousness of the US tax system...
stoplight
2017-03-04 06:48
@tkrunning welcome to the U.S. ?land of the not so free? :joy:
stoplight
2017-03-04 06:50
hmmm...sounds like a really complicated situation..has he tried contacting an accountant?
tkrunning
2017-03-04 07:52
He's in touch with multiple lawyers, and he's leaving the US now to not risk being tax resident here for 2017 too. I'm sure he'll figure it out, but I'm personally curious about the laws and regulations causing all this trouble for him, so would love to learn more :slightly_smiling_face:
tkrunning
2017-03-04 07:55
But yeah, personally I would never become fully tax resident in the US... Just too much hassle. I've had to submit some tax returns there previously, but luckily just simplified versions as I was on a student visa.
US = only playground flag for me
yuli
2017-03-06 04:36
Hi :slightly_smiling_face:
I am wondering if anyone has a US tax lawyer recommendation I can consult with?
I am a non US citizen, and my companies are non US entities, however, due to some limitations of doing business in the USA and not having a USA company, I am thinking of opening a US entity, so looking to consult with someone, to see if that is valid to do, and if I can still have tax benefits which I am having right now as a digital nomad with some structure. Thanks ahead!
max
2017-03-06 06:18
I recently had an email exchange with an advisor who approached me via a FB Group https://www.facebook.com/groups/205470759903160/?fref=ts He claims Estonia is planning to tax undistributed profit. Here are a few excerpts from the conversation
max
2017-03-06 06:19
Advisor: ```Unfortunately Estonia changed its tax rules for 2017 and now tax all earnings, distributed or otherwise. their advantage was that you could retain earnings and reinvest tax deferred, but no longer. This is why I have never been interested in Estonia as it was inevitable. ```
max
2017-03-06 06:20
Me: ```according to a PWC report things remain the same:
http://taxsummaries.pwc.com/uk/taxsummaries/wwts.nsf/ID/Estonia-Corporate-Taxes-on-corporate-income
There is a plan to lower dividend tax, though, more information here:
http://www.baltic-course.com/eng/finances/?doc=127051
And fight capital loans to offshores:
http://news.err.ee/v/news/aac192af-3a6e-4d1c-8571-6b55e14dea65/government-to-discuss-keeping-companies-from-moving-untaxed-profits-out-of-the-country-by-means-of-loans
Where did you get the information about Estonia "taxing all earnings distributed or otherwise"?
```
max
2017-03-06 06:21
Advisor: ```I just spoke to my Estonian lawyer a couple of days ago. I see if I can find the info though. My lawyer just told me on the phone.
```
max
2017-03-06 06:21
Advisor: ```I did a little digging. Estonia hasn't yet announced the tax change. They are announcing later this year and will go into effect next year. I have confirmed this with 2 lawyers and 2 accountants. They won't do an official announcement until the rule change takes effect.```
max
2017-03-06 06:21
@simon what do you think of this? ^
jb
2017-03-06 06:45
@max I hope not, that doesn't sound right at all - Georgia just adopted the same model with help from Estonia, why would they help if it wasn't working?
josh
2017-03-06 06:50
Wow that's too bad. Maybe it hasn't been working out for them as well as they'd hoped.
josh
2017-03-06 06:50
Georgia should pounce on that info
stoplight
2017-03-06 08:04
wow...
tkrunning
2017-03-06 08:12
This tax model (only taxing distributed profits) isn't a new feature of the Estonian tax system, it has been around "forever". It doesn't mean it will be around forever, though, and Estonia recently got a new, slightly less business friendly government.
Still, I doubt they will go away from the current model anytime soon... It wouldn't be in their interest...
alexanderhay
2017-03-06 11:14
The change in Estonia would be very damaging for those relying on Estonia 100%, but not a big deal for most. The Estonian model was never intended to be the primary entity to use in a business structure. It was intended as a Payment Agent to be used by non-European businesses to enter the European market. 5% of the funds remained in Estonia, the remaining 95% were then remitted to the holding company usually in Belize or Panama. So this shouldn't really change very much.
josh
2017-03-06 11:22
How can e-residents set up an Estonian company using an offshore partner? I didn't think that was allowed?
simon
2017-03-06 13:35
@max It's possible that they will go through with this change. There has been a drop of 30% in the amount of corporate income tax collected year-on-year. That said, what a stupid move it would be. It is pretty much Estonia's only competitive advantage.
alexanderhay
2017-03-06 13:51
@josh I don't really understand what you mean?
josh
2017-03-07 11:02
Well they started the e-residency program to get attention and entrepreneurs. The only way I have ever seen one can set up - as an e-resident - is directly in Estonia.
josh
2017-03-07 11:04
At least as a foreigner.
alexanderhay
2017-03-07 11:10
Sorry. I thought you were responding to my post.
yu138086
2017-03-07 15:21
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josh
2017-03-08 04:13
Yes I was. :smiley: But specifically, this part: "The Estonian model was never intended to be the primary entity to use in a business structure." Because that was really the only thing that gave e-residency any worth beyond being a novelty, was being able to set up an Estonian company and bank account.
alexanderhay
2017-03-08 05:09
Oh well.
josh
2017-03-08 05:39
?
alexanderhay
2017-03-08 05:55
You are confusing the issue of e-residence, and company structure. I always thought the e-residency was a great idea but only a gimmick for the moment. Nothing has changed. Maybe in the future it will take on some real purpose.
alexanderhay
2017-03-08 05:56
As to the issue of Estonia abandoning the Estonian model, that is an entirely different issue.
mrblonde
2017-03-08 17:25
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mescos
2017-03-08 22:12
@alexanderhay - Question about your previous comment: "It was intended as a Payment Agent to be used by non-European businesses to enter the European market. 5% of the funds remained in Estonia, the remaining 95% were then remitted to the holding company usually in Belize or Panama.?
Wouldn't payments remitted from an Estonian OU to an entity in low-tax jurisdiction (Belize, Panama, etc) be considered a ?deemed dividend? and trigger a 20% tax? Also, wouldn?t a payment from an Estonian OU to an entity in a low-tax jurisdiction (especially one on Estonia?s blacklist) be flagged for audit to determine whether or not the payment was actually a deemed dividend?
alexanderhay
2017-03-09 04:58
No. Not if done correctly.
alexanderhay
2017-03-09 05:00
That is why it pays to work through Estonian lawyers for these more complex structure. A great deal depends upon getting it right. In this case both entities will have to be carefully established to insure that the ownership conforms with the Estonian legal system in order to avoid exactly what you describe, and there will need to be a well drafted Agency Agreement between the holding company and the Estonian payment agent.
globalconsulteurope
2017-03-09 12:50
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mescos
2017-03-09 18:02
@alexanderhay - Great. Sounds like you know a lot about Estonian structuring. Do you (or anyone else) have any Estonian law firms that you would recommend?
alexanderhay
2017-03-09 21:50
@mescos It has been a few years since I did anything in Estonia. Let me check with my contacts. Will be back with you in a PM. Feel free to follow up and remind me.
jerobo
2017-03-12 17:19
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highflier
2017-03-12 20:00
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johannago
2017-03-14 16:28
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crimsonpost
2017-03-15 11:28
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pedrodemendez
2017-03-16 13:38
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netroxx
2017-03-17 15:35
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roman
2017-03-20 10:05
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roman
2017-03-20 13:37
Is anyone here familiar with Labuan setups? Any cons/pros? I am in the early stage of research. Someone has recommended that jurisdiction to me. But I am not sure how legit it is and if things are really that peachy there. Thanks.
simon
2017-03-20 14:18
@roman Labuan is great if you intend to relocate to Malaysia (it makes acquiring residency really easy). Otherwise there are better jurisdictions out there.
roman
2017-03-20 15:19
@simon I wanted Labuan/Malaysia to be my primary residence, but not actually spend all of the time there or Malaysia. But some time I?d definitely spend in Malaysia and SEA in general. But it is starting to look less attractive, since I learned that Borneo is out of the residency option. And I was eyeing KK or Kuching.
simon
2017-03-20 19:16
@simon uploaded a file: https://freedomsurfer.slack.com/files/simon/F4M08KZRQ/image_uploaded_from_ios.jpg
simon
2017-03-20 19:17
To be considered a tax resident in Malaysia, you would need to spend 182+ days in-country at least one year out of every two (year one 182+ days, year two 1+ days, year three 182+ days etc).
mi
2017-03-20 23:41
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tatelev
2017-03-21 07:47
NOMINEE DIRECTOR/S. If I own a company in one country and I move to another(Canada), Canada will consider my foreign company as canadian tax resident if ?mind and management?(me) resides in Canada. Is the option of using a nominee director still a viable option to avoid that? I know this was used several years ago for Ireland and UK but then it started getting lots of publicity in the news and HMRC started making that not possible somehow. What is the situation with nominee directors in other jurisdictions?
andrew.m
2017-03-22 11:36
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aka
2017-03-30 16:31
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tkrunning
2017-03-30 18:55
Regarding the Estonian tax discussion we had here recently, about Estonia possibly planning to abandon their model of only taxing distributed profits: I just had some beers with a couple of the guys on the Estonian e-residency team, and according to them the current government is actually considering lowering the CIT on distributed profits to 16% to encourage more people to take capital distributions.
ma-x-us
2017-04-02 02:44
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pragmatic
2017-04-05 16:07
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jake
2017-04-11 14:43
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pragmatic
2017-04-12 16:59
I'm trying to understand CFC laws for Netherlands. https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-netherlandsguide-2015.pdf Does it only apply to corporations with foreign subsidiaries and not individuals with foreign companies?
simon
2017-04-13 11:25
@pragmatic If your question is: would a foreign company owned by a Dutch tax resident be considered Dutch for taxation purposes? The answer is: if the company is controlled and managed from the Netherlands, yes it is quite likely to be deemed a Dutch tax resident
sdfk787
2017-04-16 13:59
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ayotech
2017-04-17 13:53
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brepalco
2017-04-18 06:11
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soniasofia
2017-04-18 17:10
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jamief
2017-04-24 16:30
Hi everyone, can anyone recommend a good international taxation expert or lawyer who can offer some decent advice on structuring business and residency between EU/HK/US
jamief
2017-04-24 16:30
?
pragmatic
2017-04-25 08:58
Hello, does anyone have tax expert contacts based in Netherlands?
danz
2017-04-25 09:49
What would you like to know? I know a bit, as I am from there. Sent me a pm if you have any questions.
tatelev
2017-04-26 19:51
US Tax reform plans unveiled: http://www.zerohedge.com/news/2017-04-26/mnuchincohn-unveil-trumps-biggest-tax-cut-ever-tax-reform-plan-live-feed
tatelev
2017-04-26 19:52
Can somebody explain to me what these mean in the last part ?Business Reform?:
tatelev
2017-04-26 19:52
what does it mean: ?Territorial tax system to level the playing field for American companies??
sdfk787
2017-04-27 09:48
exactly what it says
sdfk787
2017-04-27 09:48
income derived outside of US is not subject to taxation
sdfk787
2017-04-27 09:48
news outlets are saying that there is a 100% chance congress will not approve but its nice to see
brutus
2017-04-27 11:11
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pragmatic
2017-04-29 07:00
Im seeing conflicting information regarding whether thailand has territorial taxation or not?
simon
2017-04-29 07:24
@pragmatic It does not. It has remittance taxation (similar to Malta).
pragmatic
2017-04-29 07:24
Ah, well that's just as good.
mysteir
2017-04-29 17:24
@simon do you know what the reporting rules are regarding the remittance taxation? Are there reporting & filing requirements?
simon
2017-04-30 06:36
@mysteir Tax residents must file a return by the end of March if their income exceeds 60000 THB (when non-locally employed). I strongly recommend remitting at least that amount so that you have a reason to apply for a tax ID and file a return (keep the amount below 150k to avoid having to pay taxes). This will create a paper trail that will be useful in case you need to prove your tax residency. Non-taxable income doesn't have to be reported (non-remitted income, income generated during previous tax years but remitted during the current tax year etc).
harvie
2017-04-30 10:30
@simon I assume you need residency in Thailand to pay income tax here or can you do it on a tourist visa? This guy says anyone can: https://www.thethailandlife.com/income-tax-thailand
harvie
2017-04-30 10:31
If he is right, I can't help but feel I'd be better paying tax in Thailand than the UK
simon
2017-04-30 11:39
Yes anyone who earns above 60k bath in Thailand has to file a tax return. To be considered a tax resident though, you need to spend 180+ days. My worry with the whole tourist visa thing is that you are basically telling the government that you are working illegally in the country. They may or may not care but as far as I'm concerned, it still sounds a bit "risky".
harvie
2017-04-30 12:05
@simon thanks. I've been stopped at the airport (as I have a few visas) and I tell them I work online if they press me and they seem fine with that. Even when I applied for my 5th visa at Manila, they asked why I keep going to Thailand, again I said I have an online business and they asked for proof. Once I showed it them, they had no problem processing my visa. I think they want to stop people working actual jobs that Thai people can (hotel managers, school teachers etc) from what I've noticed.
harvie
2017-04-30 12:10
The next question is what benefits would it have to pay tax in Thailand, the rates are on par with the UK for the most part so I see no advantage to paying it in Thailand...unless I am missing something?
simon
2017-04-30 13:09
@harvie In Thailand you only pay taxes on income remitted during the same calendar year. It's thus fairly easy to live there tax-free.
harvie
2017-04-30 13:45
@simon so if I pay myself a yearly salary of 2 million baht from my HK business into my personal Thailand account, only money that I send out of Thailand during the year it was earned is liable for income tax? Sorry if it sounds like a stupid question, it's been a long day and I was actually half-way through the process of filing my UK tax return which I think might not be a wise idea.
simon
2017-04-30 14:08
Only income remitted to Thailand during the same tax year it was earned is subject to taxation. In practice this works like this:
Year 1: you earn money and remit none of it. You have you live from your savings.
Year 2: you can now remit tax-free to Thailand the money you earned during year 1. The money you earn during year 2 will be remitted during year 3. Etc
pragmatic
2017-04-30 14:13
Does withdrawing cash in a thai ATM from a foreign bank count as remitting ?
simon
2017-04-30 14:15
Yes, any income that comes into Thailand is deemed remitted
harvie
2017-04-30 15:03
Wow, that seems like a good way not to/minimize your personal income tax. Has anyone done this? I'll head to the tax office this week or next in Bangkok and will report back.
simon
2017-04-30 15:24
@harvie See "Personal taxation, Basis" https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/international-business-support/deloitte-cn-ibs-thailand-int-tax-en-2017.pdf
pedrodemendez
2017-04-30 16:05
how would Thailand look at for instance: Standard Bank - Isle of Man bank account registered in my thai residential address? If I take money out of that, would it be local or considered remitted?
mysteir
2017-04-30 18:55
great info @simon
simon
2017-05-01 03:54
@pedrodemendez Any money brought into Thailand is considered remitted. It doesn't matter if it's cash, money taken out of an ATM etc. That said, only income remitted during the year it was generated is subject to taxation so you could remit your savings tax-free.
pragmatic
2017-05-01 10:26
Interesting. I wonder about the difference between income and savings. If I have 50k savings, earn 100k income in a year, and remit 50k, how can I say if the 50k remitted were savings or income?
harvie
2017-05-01 11:23
@pragmatic should be easy enough if you have two bank accounts. Pay your income in bank A and use savings from bank B. Then in year 2, use Bank A and put your income in Bank B.
tkrunning
2017-05-02 16:11
@tkrunning uploaded a file: https://freedomsurfer.slack.com/files/tkrunning/F57HRHPJQ/pwc_tax_alert_no27_may_2017_eng.pdf
tkrunning
2017-05-02 16:12
Estonia is working on a proposal to lower the tax rate for ?regularly distributed income? from 20% to 14%
tkrunning
2017-05-02 16:13
In many cases it will be offset by a 7% withholding tax (for resident or non resident natural persons), but that might be lowered to 5% or 0% according to tax treaties.
tkrunning
2017-05-02 16:14
For non-resident legal persons, the withholding tax will not apply
jase
2017-05-02 16:19
This sounds positive
mysteir
2017-05-05 20:14
harvie: Any update on this? Curious what info you got from the tax office...
harvie
2017-05-06 03:41
@mysteir I'm going next week hopefully Tues/Weds.
johncitizen
2017-05-09 00:05
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paul
2017-05-09 04:31
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mrblonde
2017-05-09 11:26
re: Thai tax, yep simply have 2 accounts and switch each year, that way you have paper trail if audited/ questioned etc
mysteir
2017-05-09 20:16
Cool man, very curious to know how it will go, keep me updated :slightly_smiling_face:
harvie
2017-05-11 10:38
@pragmatic @simon @mrblonde @mysteir I went to and got my Thai tax ID today, was a simple process but no way you'll be able to get it without speaking Thai or having someone with you to fill in the form (it's all in Thai, no staff speak English). Took around 1.5 hours and you need to prove you've been in the country 180 days (passport) and have a lease agreement. The tax office you go is based upon your current Thai address. I am self affiliated with http://www.bangkokhelper.com and went with her, will add the service on there shortly should anyone need help with it.
They had no clue why I was there and she had to breakdown that I need to pay tax because I have a business outside of Thailand and bring money in etc. Was kind of funny actually and they asked why would you ever want to pay tax, I just lol'd.
I'll write a blog about it soon on my site if anyone would like more info, or reply here and I'll answer.
johncitizen
2017-05-12 06:38
Anyone got a guide to doing taxes in Estonia?
johncitizen
2017-05-12 06:38
My accountant charged ?350 for effectively no service
globalconsulteurope
2017-05-12 08:06
Do you have an active company there or just an entity that you maintain on annual basis?
bmapilot
2017-05-12 08:20
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simonbcr
2017-05-12 09:53
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johncitizen
2017-05-15 00:16
Just an entity I'm maintaining at the moment with limited capital sitting in its bank account, no real outgoings.
otkeedca
2017-05-18 05:22
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swiss_gael
2017-05-22 11:46
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brian
2017-05-23 21:14
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2017-05-25 08:39
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architect
2017-05-25 12:27
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2017-05-26 15:14
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pieter.j.becker
2017-05-28 14:28
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2017-05-30 10:56
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c-bass
2017-05-31 15:36
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nickc
2017-06-01 07:53
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agalt
2017-06-01 20:18
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yuli
2017-06-03 22:56
Hey everybody. I am looking into become a tax resident in Panama, using the Friendly Nations Visa. Right now I have an Israeli residence.
I am looking to know the tax implications that will have with my investment account, which is located in the USA, with such a move.
Would love to get professional advice - if someone knows someone who can help, would be awesome to get a referral :slightly_smiling_face: thank you.
2017-06-04 05:42
This message was deleted.
johncitizen
2017-06-04 10:48
Just renounce, then there is no longer a tax problem ;)
agalt
2017-06-04 14:07
@yuli Alexander can help with that. There are many Israelis in the Republic of Georgia because of the tax benefits.
pragmatic
2017-06-04 16:39
But he is talking about Panama :slightly_smiling_face: ?
pedrodemendez
2017-06-04 17:39
Thanks for the answers on this, still have a question regarding this. Theoretical: given the personal bank account on Man below, registered on my thai residential address. Further given: I sell a personal investment with a gain in 2017 and transfer the proceeds to said bank account in 2017. At what point will this money be considered remitted? Am I safe sending the gains in 2017 and pulling the gains from the atm in 2018... or are the gains already considered remitted once the gains are deposited in the account?
pedrodemendez
2017-06-04 17:42
I get the feeling I need a second personal residential address outside Thailand to register my Man account .. and prevent paying capital gains tax on gains remitted in the same year as they are made..
pragmatic
2017-06-04 17:55
@pedrodemendez As I understand, you must use your Thai address (assuming this is where your tax residency is) on your Isle of Man bank account (or any other bank account in a country that is part of the CRS).
pragmatic
2017-06-04 17:55
Money you earn that goes into your Isle of Man account, will not count as remitted, as the money is not in Thailand
pragmatic
2017-06-04 17:56
Only when you transfer it to your Thai account, or withdraw it from a Thai ATM, or in some other way bring that money into Thailand, will it count as remitted.
pragmatic
2017-06-04 17:56
The address on your foreign bank account does not matter for purposes of whether it is remitted
agalt
2017-06-04 18:40
Your right @pragmatic i miss-read that
yuli
2017-06-04 20:49
agalt: Thanks will speak to him.
yuli
2017-06-04 20:49
brian: Will speak to him!
max
2017-06-04 21:13
Hi @yuli I am a Panama resident, my Israeli friend is in Panama City at the moment in the process of getting one
max
2017-06-04 21:15
There was a number of complications for him, specifically because of his investments in Israel. Also there were some issues with his cirminal record being issues incorectly
max
2017-06-04 21:15
I can ask for the details if you want
yuli
2017-06-04 21:15
Hey @max we did speak briefly about it :slightly_smiling_face:
I am more concerned on the connection of USA & Panama. I invest in the USA market, in a USA bank.
My current address is written as Israeli there. If I change to Panama, I am assuming they'll be withholding tax on growth. I did not see a tax treaty between USA & Panama.
yuli
2017-06-04 21:16
Sure, any additional details would be appreciated
max
2017-06-04 21:17
Pretty every bank form you fill out asks if you have any US investmens / banks accounts / businesses?
max
2017-06-04 21:17
I have been told it is a red flag for them. But I would speak to a lawyer
simon
2017-06-05 09:22
@pedrodemendez As @pragmatic said, as long as the money stays outside Thailand it will not be considered remitted and will not be subject to Thai taxation. You will be able to bring it into Thailand starting in 2018.
pragmatic
2017-06-05 09:25
@simon Does Malta non-domicile also work with remitted in the same year? Or it doesn't matter when it was remitted?
benjamin
2017-06-06 04:57
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tatelev
2017-06-06 13:56
Hi guys. For a US LLC treated as Disregarded Entity, owned by a foreigner, where there is no US physical place(office, warehouse..) nor an agent/employee in USA, even if sales made to US customers using Amazon USA FBA as fulfillment, the income will not be considered ETBUS so no US federal income tax liable from that
tatelev
2017-06-06 13:57
Now, since January 2017 LLCs foreign owned need to make a yearly filing just to inform the IRS if there has been any transaction from the LLC to the owner
tatelev
2017-06-06 13:58
I have one question about how does the situation change in terms of taxes and filing requirement if instead of just FBA product sales, there is also Amazon Merch sales
tatelev
2017-06-06 13:58
I believe Amazon Merch sales income is royalties
tatelev
2017-06-06 13:59
(no, nothing has changed in what has to be paid by the foreigner, there is now just a new filing required for information purposes)
tatelev
2017-06-06 13:59
no
agalt
2017-06-06 13:59
@alexanderhay
tatelev
2017-06-06 13:59
FBA product sales
pragmatic
2017-06-06 13:59
what's the difference between FBA and merch sales?
tatelev
2017-06-06 14:00
Amazon Merch is the new Amazon Tshirt print on demand business
tatelev
2017-06-06 14:00
seller makes the design and uploads the design to Amazon Merch
tatelev
2017-06-06 14:00
and Amazon lists the tshirt in Amazon
tatelev
2017-06-06 14:01
when a sale is made, Amazon pays the seller royalties
tatelev
2017-06-06 14:01
similar way than for authors that sell books on Amazon
tatelev
2017-06-06 14:01
what Amazon pays you is technically called ?royalties?
tatelev
2017-06-06 14:01
and it has a different tax consideration
tatelev
2017-06-06 14:02
it is considered US sourced
tatelev
2017-06-06 14:02
so it will be taxed
tatelev
2017-06-06 14:03
what I would like to find out is what exactly will change for me if I have both my FBA product sales(not considered US source) and royalties income from Amazon Merch(considered US sourced and therefore taxed)
tatelev
2017-06-06 14:04
will my Amazon Merch royalties income suddenly make me have to file federal tax report?
tatelev
2017-06-06 14:05
of course a tax pro advice would be ideal
tatelev
2017-06-06 14:05
but I am asking here
tatelev
2017-06-06 14:05
in case anybody has done research or has info about this
simon
2017-06-06 14:07
This is the form you need to file
tatelev
2017-06-06 14:09
ok, that was for Brian
tatelev
2017-06-06 14:09
it is not what I was asking
tatelev
2017-06-06 14:10
I am wondering about how earning US royalties changes a foreign owned LLC tax filing requirements
simon
2017-06-06 14:16
@tatalev I suspect you will have to file a tax return in the US but @alexanderhay may be able to provide you with a clearer answer
simon
2017-06-06 14:17
@simon uploaded a file: https://freedomsurfer.slack.com/files/simon/F5PD45YTW/dttl-tax-withholding-tax-rates.pdf.pdf
simon
2017-06-06 14:17
On a side note, this PDF may be of use to some here
maxsuur
2017-06-06 14:22
it seems it is a print-on-demand t-shirt kind of service. Just like "createspace" for books. You choose the design and they supply the raw materials
tatelev
2017-06-06 14:23
@brian I cannot see why you are thinking that Amazon Merch has anything to do with affiliate links
tatelev
2017-06-06 14:24
forget about affiliate links :slightly_smiling_face:
tatelev
2017-06-06 14:25
it?s all the rage now
tatelev
2017-06-06 14:27
I have been approved to sell in Merch
tatelev
2017-06-06 14:27
there is a big waiting list
simon
2017-06-06 14:28
Are non-US residents subject to the 30% withholding tax on this Amazon Merch site?
tatelev
2017-06-06 14:28
and I am wondering if it is worth for me to try some designs(I have somebody that could design for me) or if it will create a tax liability with the IRS that will not make it so worth it
tatelev
2017-06-06 14:28
I think it varies depending on which country you are from
tatelev
2017-06-06 14:29
there is different percentages depending on the country
tatelev
2017-06-06 14:29
but in general yes, there is withholding
tatelev
2017-06-06 14:29
Amazon directly collects it for you
tatelev
2017-06-06 14:29
(if you sell as a foreing individual)
tatelev
2017-06-06 14:31
but operating as an LLC might be different, it might create a new US tax filing obligation, that?s what I am confused about and trying to figure out before I use my LLC account for selling any t-shirt
tatelev
2017-06-06 14:31
I prefer to be overparanoid with this
simon
2017-06-06 14:31
@tatelev Usually, when the withholding tax applies it means that the income is considered US-sourced.
tatelev
2017-06-06 14:32
yes, royalties are considered US sourced
tatelev
2017-06-06 14:32
that I already know
tatelev
2017-06-06 14:33
I just don?t know if by having these small US sourced income I will have to file federal tax return where before I didn?t
simon
2017-06-06 14:36
If you have US-sourced income, you usually have to file a return
tatelev
2017-06-06 14:38
I suspect so
tatelev
2017-06-06 15:05
but still I am not 100% convinced
tatelev
2017-06-06 15:05
:slightly_smiling_face:
tatelev
2017-06-06 15:06
if I am an individual and sell books or Amazon Merch tshirts, Amazon will just pay me the royalties minus the royalties tax
tatelev
2017-06-06 15:07
but if I am a foreign owned US LLC classified as a Disregarded Entity the taxed person would be me, because the LLC is fiscally transparent
tatelev
2017-06-06 15:08
so I wonder if it would be any different
tatelev
2017-06-06 15:08
maybe there is no filing required either, just Amazon would with hold the royalties tax
tatelev
2017-06-06 15:14
about 30%
tatelev
2017-06-06 15:14
but as I said before it will depend on which country are you resident from
simon
2017-06-06 15:23
@tatelev Did Amazon make you file a tax form? (such as a W-8BEN)
tatelev
2017-06-06 15:25
they make you go through a ?tax interview?, where you choose options that apply to the legal entity that you will operate with
tatelev
2017-06-06 15:26
when I changed my account to the LLC I had to go through the tax interview again
tatelev
2017-06-06 15:27
it was very confusing interface, but I think I finally got it right
tatelev
2017-06-06 15:27
and with that, Amazon auto fills a W-9
tatelev
2017-06-06 15:29
these were all the answers I chose, after which the W-9 was auto filled:
tatelev
2017-06-06 15:29
QUESTION: Who will receive income from Amazon or its subsidiary?
ANSWER: Individual/Sole-Propietor
QUESTION: For U.S tax purposes, are you a U.S person?
ANSWER: YES
QUESTION: Name
ANSWER: The name that appears on the first line at the top left of the letter CP575 that the IRS sent you to give you your FEIN. In most cases this will be the name of your LLC
QUESTION: Address
ANSWER: The address that the IRS has for your LLC at the moment of filling the tax interview
QUESTION: Taxpayer Identification Number
ANSWER: Choose EIN from the list and then type the EIN that the IRS gave you for your LLC on the letter CP575
QUESTION: Do you consent to provide an electronic signature for your IRS Form W-9?
ANSWER: YES
SIGNATURE: Your Full Name
tatelev
2017-06-06 15:47
so what?s your take @simon ?
tatelev
2017-06-06 15:48
about it being a W-9 , not a W-8BEN
pragmatic
2017-06-06 15:53
@tatelev you should not be signing a w9, ever, unless you treat your llc as a c corp for tax purposes. Get profeddional advice before you make too many mistakes.
agalt
2017-06-06 15:55
@pragmatic is correct. Ask a professional. This is not something you want to screw up
tatelev
2017-06-06 15:55
amazon tax interview interface was very confusing and it had me thinking for many days. It shows and hides options depending on what you choose
tatelev
2017-06-06 15:56
I asked Amazon?s tax department
tatelev
2017-06-06 15:57
why the options that seemed most logical to me were hidden/disabled
tatelev
2017-06-06 15:57
and I received this reply:
tatelev
2017-06-06 15:59
?The tax interview will guide you through a step-by-step process to determine which tax form is right for you and gather all required details to update your account.
However, note that you are considered a U.S. person if you are a (1) U.S. citizen, (2) U.S. resident, or (3) entity organized under the laws of the U.S and are required to take the tax interview as a US person and submit a W9 form.
Please refer to your tax advisor if you are still unsure of your status. For more information, please visit the IRS website.
Also note, that if you are taking the interview as a Single-Member LLC or a Sole proprietor, you are still required to select Individual/Sole-Proprietor and provide your business EIN by selecting EIN from the drop down under the tab ?Taxpayer Identification Number ? and update the name that appears on the top line of the address on your CP575 notice you received from the IRS.
Also, if you are taking the tax interview as a business, select Business as the recipient of the income received through Amazon and update your EIN and business information as per the IRS CP575 letter?
tatelev
2017-06-06 16:02
So @agalt and @pragmatic can you explain why you think I have chosen wrong?
tatelev
2017-06-06 16:04
willing to accept I might have screwed up, but from the options available in the tax interview and the explanation of Amazon?s tax department, I chose the options for a LLC disregarded entity. That?s what I understood
pragmatic
2017-06-06 16:04
W9 is only if the beneficial owner of the company is a US person, or the if the company is a US company (but not a disregarded entity)
pragmatic
2017-06-06 16:04
You must use W8Ben
tatelev
2017-06-06 16:05
but what about what Amazon tells me to choose, in which of the answers it does not apply to me?
tatelev
2017-06-06 16:06
what about what he said: ??(3) entity organized under the laws of the U.S and are required to take the tax interview as a US person and submit a W9 form?
agalt
2017-06-06 16:07
Thats a question for a lawyer or an accountant. @alexanderhay thoughts?
tatelev
2017-06-06 16:07
wait, I got some screenshots of amazon?s tax interview, while I was having the conundrum, I will post them
tatelev
2017-06-06 16:09
btw, just to check, if I would have screwed up, I can still fix this by taking the tax interview again and have Amazon send the correct file to the IRS, correct?
pragmatic
2017-06-06 16:09
Do you live in usa ?
pragmatic
2017-06-06 16:10
Aee you a us citizen ?
tatelev
2017-06-06 16:10
no I am not US citizen
tatelev
2017-06-06 16:10
and I do not live in USA
pragmatic
2017-06-06 16:10
Is your company a us taxavle association?
tatelev
2017-06-06 16:10
no
tatelev
2017-06-06 16:10
disregarded entity
pragmatic
2017-06-06 16:10
Then you did it wrong
tatelev
2017-06-06 16:11
ok
tatelev
2017-06-06 16:11
totally possible :slightly_smiling_face:
tatelev
2017-06-06 16:11
believe me, I asked for advice on this
tatelev
2017-06-06 16:11
it was really confusing
tatelev
2017-06-06 16:12
This is how Amazon?s tax interview looked like when I chose the options that I ended up going for:
tatelev
2017-06-06 16:12
@tatelev uploaded a file: https://freedomsurfer.slack.com/files/tatelev/F5PC4GUHZ/amazontaxinterview.png
tatelev
2017-06-06 16:13
(which ended in a W-9 being auto filled)
tatelev
2017-06-06 16:14
and this is how the fields changed when I answered ?NO? to ?Are you a US Person?
tatelev
2017-06-06 16:14
@tatelev uploaded a file: https://freedomsurfer.slack.com/files/tatelev/F5PEB9GSW/amazontaxinterviewsoleprop.png
tatelev
2017-06-06 16:15
these options would have ended in a W8-BEN
tatelev
2017-06-06 16:16
The second route was the one that seemed most logical to me at first
pragmatic
2017-06-06 16:16
You selected that you are a US person...
tatelev
2017-06-06 16:17
and initially I did the tax interview like that, as a Non US Person
tatelev
2017-06-06 16:17
but when doing it like that I am and individual in Amazon eyes
tatelev
2017-06-06 16:17
all my account is then set with my personal details
pragmatic
2017-06-06 16:23
well
pragmatic
2017-06-06 16:23
it seems you didn't select business
pragmatic
2017-06-06 16:24
but individual
pragmatic
2017-06-06 16:24
so that seems to make sense from the screenshot you sent
tatelev
2017-06-06 16:24
what do you mean
pragmatic
2017-06-06 16:24
First question
pragmatic
2017-06-06 16:24
Who will receive income
pragmatic
2017-06-06 16:25
Individual or business
tatelev
2017-06-06 16:25
Amazon gave me specific instructions that if single member LLC I should choose ?Individual/Sole Propietor?
pragmatic
2017-06-06 16:27
I see
tatelev
2017-06-06 16:27
If you choose ?Business? two new lists show up
tatelev
2017-06-06 16:29
Route 1) Business + US Person -> 2 new lists show up ?Federal Tax Classification? with options C Corporation, S Corporation, Partnership, Trust/Estate, LLC and Other
tatelev
2017-06-06 16:30
if select LLC from that list, there is a second list ?LLC type? with options S Corporation, C Corporation and Partnership
tatelev
2017-06-06 16:30
if on the other hand I select Route 2) Business + Non US Person?
tatelev
2017-06-06 16:31
then the options shown only work for companies registered in a country different that USA
tatelev
2017-06-06 16:31
if you select USA from the list of countries you get an error message
tatelev
2017-06-06 16:32
?If you are a U.S. person, you must complete IRS Form W-9. If you are not a U.S. person, choose a different country.?
tatelev
2017-06-06 16:33
If I go Route 3) Individual/Sole Propietor + US Person (this is the one I chose)?
tatelev
2017-06-06 16:34
then you get shown fields: ?Name?, ?Federal Tax Classification? prefilled and not modfiable with ?Individual/Sole Propietor/Single-Member LLC?
tatelev
2017-06-06 16:36
And if I would choose Route 4) Individual/Sole Propietor + Non-Us person then I get fields ?Full Name?(my personal name), ?Country of citizenship?, ?Type of beneficial owner=Individual?, ?Permanent address??
tatelev
2017-06-06 16:46
so as you can see it is a messy thing to figure out this Amazon?s tax interview
tatelev
2017-06-06 16:46
and I did consult with a tax expert, but he could not give me a definitive answer
tatelev
2017-06-06 16:47
I guesst not all tax experts are created equal
pragmatic
2017-06-06 16:48
It sure is confusing
pragmatic
2017-06-06 16:48
who couldn't give you a definitive answer?
pragmatic
2017-06-06 16:48
@alexanderhay ?
pragmatic
2017-06-06 16:49
I would suggest contacting amazon support and asking how you should select the correct option for a disregarded US LLC, and not be billed under your personal name.
pragmatic
2017-06-06 16:49
I mean not billed, but paid money :slightly_smiling_face:
tatelev
2017-06-06 16:50
I did
tatelev
2017-06-06 16:50
I pasted their answer before
tatelev
2017-06-06 16:51
they said: ??note that you are considered a U.S. person if you are a (1) U.S. citizen, (2) U.S. resident, or (3) entity organized under the laws of the U.S and are required to take the tax interview as a US person and submit a W9 form.?
tatelev
2017-06-06 16:51
and they also said ??Also note, that if you are taking the interview as a Single-Member LLC or a Sole proprietor, you are still required to select Individual/Sole-Proprietor and provide your business EIN by selecting EIN from the drop down under the tab ?Taxpayer Identification Number ? and update the name that appears on the top line of the address on your CP575 notice you received from the IRS.?
tatelev
2017-06-06 16:52
and no, I didn?t consult with Alexander Hay on this issue
tatelev
2017-06-06 16:52
I had a consultation with him some time ago
tatelev
2017-06-06 16:53
but I consulted somebody else for guidance on what to choose in the tax interview
pragmatic
2017-06-06 17:06
wow
pragmatic
2017-06-06 17:06
a tax lawyer that coudn't help with that... I'd ask for my money back
pragmatic
2017-06-06 17:06
Here's a guy that I'm pretty sure could help
pragmatic
2017-06-06 17:06
he has a whole article about this kind of stuff
pragmatic
2017-06-06 17:06
but he's not cheap
pragmatic
2017-06-06 17:06
I've never used him personally
tatelev
2017-06-06 17:19
Yeah, I know him
tatelev
2017-06-06 17:19
Also paid him for a consultation before:blush:
tatelev
2017-06-06 17:21
Most want to sell you something bigger, so they end up taking the consultation to where it makes more sense to them
tatelev
2017-06-06 17:23
But I've read his stuff, very educational
agalt
2017-06-06 17:26
Glad i use a trust to own the llc and dont need to worry about my name on the llc. It cost me extra (yes, even i pay @alexanderhay for stuff)
tatelev
2017-06-06 17:34
Good for you! I could not justify that cost yet
agalt
2017-06-06 18:24
"own nothing, control everything"
josh
2017-06-06 18:39
That certainly seems to be working well for the Rothschilds @agalt :wink:
agalt
2017-06-06 19:14
I can't fault a lot of what they and the older European ruling families are doing. The earthbis progressing nicely. Technology and transportation will be fantastic in 5-10 years with quantum computing and ion engine spacecraft. That quote was from John D. Rockefeller though
agalt
2017-06-06 19:16
A Rockefeller recently died and had something like 6 heart transplants. The ladt 3 were his own heart grown in a lab. Stem cell therapy is also an exciting development if you have a private clinic and the right doctor.
tatelev
2017-06-06 19:26
By the way, the arena of tax consulting is a mess
tatelev
2017-06-06 19:26
there is too much contradiction between different professionals
tatelev
2017-06-06 19:27
take my issue as an example
tatelev
2017-06-06 19:28
you will find tax professionals that swear that a foreign owned LLC that imports into USA and sells on Amazon through FBA fulfillment is NOT liable to pay US tax unless there is either an exclusive agent/employee or a permanent establishment important for the business(and office, a warehouse) in the USA
tatelev
2017-06-06 19:28
you will also find tax professionals that say that this is total bullshit
tatelev
2017-06-06 19:29
and that a foreign owned LLC that imports into USA and sells on Amazon through FBA fulfillment IS liable to pay US tax fro the start andmust fill all that income on form 1040NR
tatelev
2017-06-06 19:30
it is a mess, which team do you trust? each give you completely contradictory advice
brutus
2017-06-06 20:12
@tatelev Looks like @alexanderhay is talking about your situation here:
(...) FATCA has not changed the tax treatment issues, but has changed the reporting requirements for US payors. The issue of the W-9 (reporting form for US resident payees receiving funds) and W-8Ben (reporting form(s) for non-US residents receiving funds) was always a little murky but now it is downright impossible. (...). No one really understands how the new W-8Ben system works (...). And the penalties for getting it wrong are quite serious so payors are paying a lot more attention, or just choosing not to do business with anyone who cannot execute a W-9. (...)
http://www.alexander-hay.com/disregarded-entity-vs-taxable-association-what-is-the-best-way-to-structure-your-llc/
brutus
2017-06-06 20:18
But then on this page shared by @pragmatic , seems the opposite is being told?
(...) Let?s say you decide to sell products into the US market using Amazon?s ?Fulfillment by Amazon? service (i.e., Amazon FBA). So, you buy products and have them shipped to Amazon?s warehouses, and Amazon employees package the products and ship to customers.
Is Amazon your dependent agent? No, absolutely not. Amazon has their own business going on, and you?re just one of Amazon?s many clients.
So, in this example, you?re not ?engaged in a trade or business in the US,? so you?re not subject to US tax on income from selling products into the US.
http://ustax.bz/non-us-entrepreneurs/
tatelev
2017-06-06 20:24
yes, confusing
tatelev
2017-06-06 20:24
this stuff is always difficult to understand
tatelev
2017-06-06 20:25
moreso when tax professionals do not agree
tatelev
2017-06-06 20:26
of course I accept the possibility that it is just me and an inability of seeing how all the pieces fit together
tatelev
2017-06-06 20:31
plus now I must figure out quick if I have filled my Amazon?s account tax interview incorrectly
tatelev
2017-06-06 20:40
tatelev
2017-06-06 20:42
the 3 persons answering that Quora question, are CPAs and tax attorneys
tatelev
2017-06-06 20:42
yet their anwers are completelly contradicting each other
brutus
2017-06-06 20:53
@tatelev I am probably VERY naive, but can't you ask "officially" the IRS?
Via ("registered") mail for example, in order to get their official answer?
tatelev
2017-06-06 20:56
it is a good idea and I thought about it
tatelev
2017-06-06 20:58
I only called once to the IRS for something completely different
tatelev
2017-06-06 20:58
something supposedly more simple than this issue
tatelev
2017-06-06 20:59
and the person on the phone didn?t have a clue
tatelev
2017-06-06 21:00
seemed like an old lady, it really felt like she was not very knowledgeable
tatelev
2017-06-06 21:00
maybe the IRS helpdesk is not aimed at answering complex issues
tatelev
2017-06-06 21:01
@brutus what did you mean by registered mail?
brutus
2017-06-06 21:05
@tatelev In some countries, letters to administration is/can be somehow "registered" and they should answer you within a fixed time frame. In France it is some kind of Express mail service with delivery receipt (although not guarantee of an answer...), in Belarus all letters are logged (number) and answer is official and also logged (number)... Not sure though how it works in the US
tatelev
2017-06-06 21:05
ah I see what you mean
tatelev
2017-06-06 21:06
I am not sure about this either
brutus
2017-06-06 21:10
pragmatic
2017-06-06 21:44
@brutus what part of @alexanderhay's blog page contracts with the http://ustax.bz page?
tatelev
2017-06-06 21:52
Alexander Hay suggests that a structure in which the non-resident?s LLC ends up having to file an annual tax return
tatelev
2017-06-06 21:53
?there is now a requirement to file an annual tax return which means there is a requirement to maintain a good set of books so that the tax preparer can accurately file the return.?
pragmatic
2017-06-06 21:55
No
pragmatic
2017-06-06 21:55
this is if you turn the LLC into a taxable association
pragmatic
2017-06-06 21:55
ie, have it taxed as a C-corp
pragmatic
2017-06-06 21:55
they are talking about different things in the two articles
tatelev
2017-06-06 21:55
he is suggesting that this is needed
pragmatic
2017-06-06 21:55
That is needed in order to do certain things, such as set up a stripe account
pragmatic
2017-06-06 21:55
or accept money from others only willing to accept a W9
pragmatic
2017-06-06 21:56
He is not saying that selling products on amazon is ETBUS
tatelev
2017-06-06 21:56
I know
tatelev
2017-06-06 21:57
I guess you are right, these two articles are not contradicting each other
tatelev
2017-06-06 21:57
but the point was that there is a lot of contradiction all over the place among tax advisors
tatelev
2017-06-06 21:58
about weather a foreign owned LLC treated as disregarded entity has to automatically file tax return or not
tatelev
2017-06-06 21:58
this is a good example of this contradicting advices: https://www.quora.com/How-am-I-taxed-as-a-non-US-resident-owning-an-LLC-selling-on-AMZ
tatelev
2017-06-06 21:58
by the way?
tatelev
2017-06-06 22:00
I wonder if the reason why Amazon?s tax interview seems to either force me to operate as a LLC which is US Person(W-9) or Individual Non-US Person(W-8BEN) has to do with what Alex mentioned in his article
tatelev
2017-06-06 22:00
maybe Amazon is one of those ?others only willing to accept a W9?
tatelev
2017-06-06 22:03
?For those receiving money from US payors, we need a more sophisticated structure. The US LLC will elect to be a ?taxable association? ?
tatelev
2017-06-06 22:04
In this context, Amazon is a US payor?
pragmatic
2017-06-06 22:12
yes. it's possible that this is the case. this would suck.
pragmatic
2017-06-06 22:14
you have a us llc right?
tatelev
2017-06-06 22:19
Yes
tatelev
2017-06-06 22:20
Have very recently started with it
tatelev
2017-06-06 22:21
Mostly been setting everything up, including making the changes to my amazon seller's account
tatelev
2017-06-06 23:06
Any article online anybody can refer me to that explains how having filled the W-9 for my LLC might have changed my us tax liabilities?
tatelev
2017-06-06 23:08
As I detailed before, Amazon didn't seem to let me choose a different set of options if I wanted to operate as LLC, not as individual
tatelev
2017-06-06 23:42
This W-9 autofilled by Amazon has the proper tax clasification ticked
tatelev
2017-06-06 23:42
@tatelev uploaded a file: https://freedomsurfer.slack.com/files/tatelev/F5P2E1EBA/myw9.png
tatelev
2017-06-06 23:45
@pragmatic you said before ?W9 is only if the beneficial owner of the company is a US person, or the if the company is a US company (but not a disregarded entity)?
tatelev
2017-06-06 23:46
but if it is like you say why does the W-9 have the box of tax classification ?Individual/Sole Propietorship/Single-Member LLC??
tatelev
2017-06-06 23:46
Isn't that the tax classification of the disregarded entity?
tatelev
2017-06-07 05:49
thank you
tatelev
2017-06-07 05:49
I already understand that
tatelev
2017-06-07 06:00
first of all, thank you for your opinions
tatelev
2017-06-07 06:01
I appreciate the effort no matter if I agree with or trust what you wrote :slightly_smiling_face:
tatelev
2017-06-07 06:01
however I see some things there that are innacurate
tatelev
2017-06-07 06:02
for example:
tatelev
2017-06-07 06:03
?It?s pretty easy to change the owner of an Amazon account?
tatelev
2017-06-07 06:04
well creating a new LLC would need a new US bank account to be opened
tatelev
2017-06-07 06:04
there is a crazy thing going on at the moment with automatic account suspensions and lockdowns for most people that are changing payment details
tatelev
2017-06-07 06:05
I suggest you read this:
tatelev
2017-06-07 06:12
but Amazon says that if I operate with the LLC, the LLC is a US Person
tatelev
2017-06-07 06:12
they kind of ?force? me into that
tatelev
2017-06-07 06:13
what I mean is that if I choose NO then they change the fields and they are considering me and Individual from all perspectives
tatelev
2017-06-07 06:13
all my account is then changed to being operated by me, the individual, under my name
tatelev
2017-06-07 06:14
Amazon?s invoices will be directed to me, a person
tatelev
2017-06-07 06:14
and Amazon payments will be direct to me, a person
tatelev
2017-06-07 06:15
well, the point of operating through an LLC is that it has the Liability protection of a company
tatelev
2017-06-07 06:18
and what would be the goal of doing this?
tatelev
2017-06-07 06:23
interesting thought, for sure
tatelev
2017-06-07 06:24
I had read somewhere in some forum some americans mentioning they were choosing multi-member LLC on Amazon?s tax interview on purpose as a workaround
tatelev
2017-06-07 06:24
and the calling the IRC and tell them ?I made a mistake?
tatelev
2017-06-07 06:24
not so fast :slightly_smiling_face:
tatelev
2017-06-07 06:24
but definetely another option to research
tatelev
2017-06-07 06:27
first I have to make sure that the options that I chose are indeed problematic
tatelev
2017-06-07 06:28
I am not distrusting what several here including you are saying about that, I just need a more solid confirmation before making any decision involving a change of structure
tatelev
2017-06-07 06:29
thank you very much again, for sharing your thoughts
tatelev
2017-06-07 06:29
LOL
tatelev
2017-06-07 06:30
the thinking here(as Amazon and some opinions on the internet say) is that I am not a US person, but my LLC is
tatelev
2017-06-07 06:31
but I uderstand that there are chances that I might have chosen a route that will affect me negatively so I need to verify asap
tatelev
2017-06-07 06:58
yeah, I thought I had it figured out and had made a lot of research and even consultations
tatelev
2017-06-07 06:58
the LLC really seemed like a great option for me
tatelev
2017-06-07 06:58
I hope that is still the case
tatelev
2017-06-07 07:00
of course
tatelev
2017-06-07 07:01
I mean of course you can sell with a foreign company in Amazon USA
tatelev
2017-06-07 07:01
I was operating like this until now
tatelev
2017-06-07 07:01
with a UK Ltd
tatelev
2017-06-07 07:03
I considered it, I just was enticed to using a US LLC with US bank
tatelev
2017-06-07 07:03
receive payments in USD into my US bank?
tatelev
2017-06-07 07:03
Wire USD dollars to any asian country to pay suppliers?
pragmatic
2017-06-07 07:04
@tatelev you asked why does the W9 have the option of Individual/Sole Propeitorship/Single-Member LLC
pragmatic
2017-06-07 07:04
Because the single member may be a US person
pragmatic
2017-06-07 07:04
hence, he/she would use a w9
pragmatic
2017-06-07 07:05
https://www.irs.gov/pub/irs-pdf/fw9.pdf? A US Person with a disregarded LLC would tick that box, write their name on the first line, and the name of their disregarded LLC on the second.
tatelev
2017-06-07 07:06
makes sense
tatelev
2017-06-07 07:07
so it might be a case of Amazon not letting me choose some options on purpose
tatelev
2017-06-07 07:07
they hide and show fields?it is their interface
pragmatic
2017-06-07 07:07
Either on purpose, or by error, yes
tatelev
2017-06-07 07:08
my biggest fear is that should it turn up that things now are different than what I understood, I don?t see how I could undo this
tatelev
2017-06-07 07:08
because I have already started operating with the LLC
tatelev
2017-06-07 07:08
so I am a bit scared
pragmatic
2017-06-07 07:08
@tatelev if they do this on purpose you have three options. 1) Incorporate outside the US. 2) Turn your LLC into a taxable association, 3) Create a second LLC which is a taxable association, and acts as a payment agent for the first, putting 90% of profits through the first.
tatelev
2017-06-07 07:09
:slightly_smiling_face:
tatelev
2017-06-07 07:11
I know how Amazon support works
tatelev
2017-06-07 07:11
I asked to be contacted specifically by Amazon?s tax department
tatelev
2017-06-07 07:12
a guy from Amazon?s tax department wrote to me with the ?clarification?
tatelev
2017-06-07 07:12
an american
tatelev
2017-06-07 07:14
but it could be as I fear, a situation in which Amazon is covertly not allowing anymore for non-resident aliens owning a disregarded entity LLC, to sell on Amazon as an LLC
pragmatic
2017-06-07 07:16
@tatelev that would suck if it's the case. But you have options.
tatelev
2017-06-07 07:17
@pragmatic sure, there would be options, but if they mean ending with a more complex structure and with more compliance costs than what I had before it would defeat the whole purpose
tatelev
2017-06-07 07:17
it would really suck
pragmatic
2017-06-07 07:17
fair enough
tatelev
2017-06-07 07:20
@brian ?See if you can fix it with multimembers?
tatelev
2017-06-07 07:21
but as soon as you answer ?No? to ?Are you a US person? Amazon changes all the fields and you are an individual
tatelev
2017-06-07 07:21
you cannot change that
tatelev
2017-06-07 07:22
and if you select ?Business? and ?Non US person? Amazon changes the fields so that you put the details and country of incorporation, and does not let you choose USA
pragmatic
2017-06-07 07:23
@tatelev the strange thing is, normally when I hand in a W9, it doesn't change the name on the invoices. It's just a record keeping for tax purposes, to know the beneficial owner. But it would still bill via the disregarded LLC. Are you sure that this tax option changes the name that they invoice etc?
tatelev
2017-06-07 07:24
@pragmatic you mean if I choose ?Individual/ Sole-Proprietor? and ?Non US Person? and fill my personal details?
pragmatic
2017-06-07 07:24
Yeah
tatelev
2017-06-07 07:24
if I do that then my Amazon account?s legal entity shows as my name
pragmatic
2017-06-07 07:25
Okay
pragmatic
2017-06-07 07:25
I feel that they are making a mistake doing that... but they are a huge company, what do I know
tatelev
2017-06-07 07:25
there isn?t anywhere else where I will be able to write down my LLC name
tatelev
2017-06-07 07:25
unless?
tatelev
2017-06-07 07:26
If I select ?Individual/Sole Propietor? and the n ?No US Person??
tatelev
2017-06-07 07:26
I am shown this, to fill up
tatelev
2017-06-07 07:26
(I?ll take a screenshot, hold on)
tatelev
2017-06-07 07:28
@tatelev uploaded a file: https://freedomsurfer.slack.com/files/tatelev/F5QLDTTKR/taxinformationinterview.png
tatelev
2017-06-07 07:28
for the fielld that is now shown as ?Full Name??
tatelev
2017-06-07 07:28
the tooltip at the right says:
tatelev
2017-06-07 07:28
?If you are completing the information as an individual, use the information that appears on your tax return. ?
tatelev
2017-06-07 07:29
whatever I put in that ?Full Name? field is what will appear on my Amazon payments and invoices
tatelev
2017-06-07 07:29
so maybe I am incorrectly asuming that I cannot write there my LLC name?
tatelev
2017-06-07 07:31
I had chosen these options first and wrote my personal name on that ?Full name? field
tatelev
2017-06-07 07:32
when I realized that my whole account was now linked to myself as an individual I wrote Amazon for clarification
tatelev
2017-06-07 07:32
and the guy from the tax department answered this:
tatelev
2017-06-07 07:33
?Greetings,
Thank you for contacting us.
Please be advised that you have completed your tax interview on 05/23/2017, associated with the name ?MY_NAME? and it has been validated.
As per your selection via the tax interview, a W8 form has been built that certifies your Non US status and hence your income is not subject to the IRS tax reporting.
If you would like to make any changes or update your tax information, please retake our short tax interview which may be accessed from the Settings > Account Info > Legal entity section of your seller account page.
The tax interview will guide you through a step-by-step process to determine which tax form is right for you and gather all required details to update your account.
However, note that you are considered a U.S. person if you are a (1) U.S. citizen, (2) U.S. resident, or (3) entity organized under the laws of the U.S and are required to take the tax interview as a US person and submit a W9 form.
Please refer to your tax advisor if you are still unsure of your status. For more information, please visit the IRS website.
Also note, that if you are taking the interview as a Single-Member LLC or a Sole proprietor, you are still required to select Individual/Sole-Proprietor and provide your business EIN by selecting EIN from the drop down under the tab ?Taxpayer Identification Number ? and update the name that appears on the top line of the address on your CP575 notice you received from the IRS.
Also, if you are taking the tax interview as a business, select Business as the recipient of the income received through Amazon and update your EIN and business information as per the IRS CP575 letter.?
tatelev
2017-06-07 07:44
@pragmatic what did you mean before when you said ??when I hand in a W9??? Also, can you remind me what is the structure you operate with? Is it also a disregarded entity US LLC?
tatelev
2017-06-07 07:54
nobody agrees
tatelev
2017-06-07 07:57
tatelev
2017-06-07 08:05
?If an LLC is a single member disregarded entity, and the LLC is owned by a foreign person, then the LLC may not furnish the payor with a Form W-9. Instead, the LLC must furnish the LLC with a form W-8 showing the name, address and taxpayer identification number of the foreign person who is the single owner?. The payor must then withhold as if the LLC were a foreign person?
tatelev
2017-06-07 08:08
well that book is from 2009
tatelev
2017-06-07 08:09
who knows what has changed since then
tatelev
2017-06-07 08:10
Alexander Hay said in his blog post that US Payors now have more strict reporting requirements of payments done to US and non-US payees and that because of that, some have started asking for W-9 to non US payees
tatelev
2017-06-07 08:11
It could be that Amazon is very aware of this so they have consciously chosen to do this
pragmatic
2017-06-07 08:27
@tatelev yes disregarded llc. I dont use amazon or strioe or anything but when I hand a paper w8 ben to someone it doesn't mean i can't bill via the us llc. Amazons interface doesn't seem to let you select such an ootion.
pragmatic
2017-06-07 08:28
Basically IRS is a mess and disregarded us llcs that are owned by non us persons are now in a weird place where many big payors wont accept them.
tatelev
2017-06-07 08:30
Ah, before you had said W-9
pragmatic
2017-06-07 08:30
My mistake
tatelev
2017-06-07 08:30
that had confused me:blush:
pragmatic
2017-06-07 08:37
That quote above is correct. But withholding only takes place if its ETBUS.
pragmatic
2017-06-07 08:38
The guy on quora is right. Just answer is wrong.
pragmatic
2017-06-07 08:40
And this part is quite clear even from the irs instructions for w9 forms.
tatelev
2017-06-07 08:41
@pragmatic which guy one Quora are you saying is right?. there are 2 people that replied conflicting answers there
tatelev
2017-06-07 08:41
I suppose you mean that the first guy that answered in Quora is right
pragmatic
2017-06-07 08:51
For disregsrded entity owned by individual it says to give nane and ssn of owner
pragmatic
2017-06-07 08:51
But a us person doesn't have an ssn
pragmatic
2017-06-07 08:51
A non-us person i mean
pragmatic
2017-06-07 08:52
Hence they cannot fill that
tatelev
2017-06-07 08:52
since January 2017 non-resident aliens that incorporate an LLC are now required by IRS to get an EIN for it
tatelev
2017-06-07 08:52
it is a new requirement
pragmatic
2017-06-07 08:53
Yes. But look at that page
pragmatic
2017-06-07 08:53
You would need to give your ssn
pragmatic
2017-06-07 08:53
Not ein
pragmatic
2017-06-07 08:53
But you can't
tatelev
2017-06-07 08:58
in that table it says ?The owner?, as you have mentioned
tatelev
2017-06-07 08:58
and there is a little number on top of it
tatelev
2017-06-07 08:58
isn?t it a number 3 ?
tatelev
2017-06-07 08:58
if I go to the bottom I cannot see a comment for number 3
tatelev
2017-06-07 08:58
only 1 and 2
tatelev
2017-06-07 08:59
strange
pragmatic
2017-06-07 08:59
Actually its on the next column
tatelev
2017-06-07 08:59
ah
tatelev
2017-06-07 09:00
I see it now :slightly_smiling_face:
pragmatic
2017-06-07 09:00
And tgere it says yii may use ssn or ein
pragmatic
2017-06-07 09:00
Hmm
tatelev
2017-06-07 09:00
?You may use either your SSN or EIN ?
tatelev
2017-06-07 09:00
Amazon let me choose between these 2
tatelev
2017-06-07 09:01
(on my tax interview)
tatelev
2017-06-07 09:02
oh
tatelev
2017-06-07 09:02
on page 3
pragmatic
2017-06-07 09:02
Okay im out on my phone. Going to take another look at this when i get home
tatelev
2017-06-07 09:02
at the bottom right
tatelev
2017-06-07 09:02
it says: ?Caution: A disregarded U.S. entity that has a foreign owner must use the appropriate Form W-8.?
pragmatic
2017-06-07 09:02
Ah
pragmatic
2017-06-07 09:02
There you go
pragmatic
2017-06-07 09:03
I knew it was right in the irs form
tatelev
2017-06-07 09:03
and on page 2, also on bottom right it says:
tatelev
2017-06-07 09:03
?Disregarded entity. For U.S. federal tax purposes, an entity that is disregarded as an entity separate from its owner is treated as a ?disregarded entity.? See Regulations section 301.7701-2(c)(2)(iii). Enter the owner?s name on line 1. The name of the entity entered on line 1 should never be a disregarded entity. The name on line 1 should be the name shown on the income tax return on which the income should be reported. For example, if a foreign LLC that is treated as a disregarded entity for U.S. federal tax purposes has a single owner that is a U.S. person, the U.S. owner?s name is required to be provided on line 1. If the direct owner of the entity is also a disregarded entity, enter the first owner that is not disregarded for federal tax purposes. Enter the disregarded entity?s name on line 2, ?Business name/disregarded entity name.? If the owner of the disregarded entity is a foreign person, the owner must complete an appropriate Form W-8 instead of a Form W-9. This is the case even if the foreign person has a U.S. TIN.?
pragmatic
2017-06-07 09:03
So for the tax pros getting it wrong, its embarrassing :wink:
tatelev
2017-06-07 09:05
it could not be clearer: ?If the owner of the disregarded entity is a foreign person, the owner must complete an appropriate Form W-8 instead of a Form W-9. This is the case even if the foreign person has a U.S. TIN.?
tatelev
2017-06-07 09:07
so the big question becomes now an even bigger question now
tatelev
2017-06-07 09:07
Is Amazon forcing me to file wrong form on purpose? Or is it a mistake of interpretation on their part?
tatelev
2017-06-07 09:08
I?m going to write the Amazon guy from their tax department right now
tatelev
2017-06-07 09:10
attaching the full W-9 form and quoting the relevant parts that prove that their interface is making me fill wrong information/choose wrong field options
tatelev
2017-06-07 09:10
let?s pray that I get an answer that makes remotely any sense
tatelev
2017-06-07 09:10
thanks @pragmatic btw
tatelev
2017-06-07 09:12
I will
pragmatic
2017-06-07 09:20
No worried
tatelev
2017-06-07 14:47
sure, interesting, but no idea what it is about :disappointed:
pragmatic
2017-06-07 15:01
@alexanderhay the IRS is the one that makes it so complicated :slightly_smiling_face:
agalt
2017-06-07 15:04
More regulations and laws passed simply open up new ways to help people minimize tax burdens.
agalt
2017-06-07 15:05
The us is the largest tax haven in the world. It just sucks to live there and more often than not being a citizen with a social security number has significant disadvantages.
pragmatic
2017-06-07 15:23
Anyway all that @tatelev wants to do is file a w8ben with amazon (as he legally must under his current structure) while still having them pay to his llc and not his personal name. I don't think he's overcomplicating it.
alexanderhay
2017-06-07 16:33
No, sadly it is you guys. There are some very simple solutions out there, and you guys go digging through the garbage pile trying to find a unicorn horn that will magically make everything ok. Good luck. And as for what someone wants and and what someone is actually going to be able to do, there is often a big difference. Amazon does not want to deal with W8Ben filers. Period. The COULD accept them, but as of the last time I checked they WON'T. I think part of the problem is that solutions sometimes seem complicated because you have to use different tools to solve different problems. Everyone wants a Swiss Army knife that solves everything. It would be nice, but I have not found one. Please let me know when you do though. Take care and party on Dudes!
pragmatic
2017-06-07 16:38
@tatelev I think what @alexanderhay is trying to say is that Amazon sadly won't accept a disregarded LLC owned by a non-US person.
simon
2017-06-07 23:47
For those who might be wondering where the last part of this exchange went, I've deleted it myself.
That is a very unusual move from me, the first time in fact that I feel like I have to step in, but I felt it was justified in this case due to some of the replies going totally against the spirit of this group (and in one case, the rules).
Just as a reminder, this group exist so that we can share information freely with each others. This is what makes it so valuable to all of us and why it's a pleasant place to hang out. If you feel that you cannot contribute to a conversation constructively, don't. Also, this is no marketplace so I expect all to refrain from commercially motivated posting.
Thank you
johncitizen
2017-06-08 03:38
Agreed on commercial restraints, I don't appreciate solicitation.
tatelev
2017-06-08 06:42
Just a quick uneducated ?food for thought?, sorry if it is a stupid one?
tatelev
2017-06-08 06:45
what if the new changes implemented by the Treasury Department in January 2017 making changes in how foreign owned LLCs are considered for reporting purposes(they are now treated as domestic corporations for reporting purposes) is what has made Amazon change their tax interview interface to only allow disregarded entity LLCs be able to choose ?US Person? and file a W-9 ?
tatelev
2017-06-08 06:47
and continuing with this uneducated speculation, if that would be the case, another silly speculation: What if the IRS has not updated the instructions on their ?W-9? form to reflect this new measure by the Treasury Department?
tatelev
2017-06-08 06:48
feel free to throw my speculation to the garbage if it makes no sense :slightly_smiling_face:
tatelev
2017-06-08 06:56
(of course the possibilities that Amazon is either wrong in their interpretation or just voluntarely not willing to accept anything other than W-9 as Alex suggested in his article are still the most probable scenarios)
tatelev
2017-06-08 07:15
(I still haven?t heard from Amazon yet btw. It will be interesting to see what their tax department replies)
pragmatic
2017-06-08 08:06
@tatelev the changes only require you to file a report showing any transfers between the LLC and it's owner... it is not a tax return... hence it does not change anything with regards to the w9
pragmatic
2017-06-08 08:07
A w9 basically says: "Yes, I/my company pays taxes on profits in the US"
pragmatic
2017-06-08 08:08
Sorry man, but the only solution with your current structure is for amazon to change its policy
pragmatic
2017-06-08 08:08
and good luck with that
pragmatic
2017-06-08 08:08
I know it's super annoying, but it is what it is, you're desperately seeking the answer you want, but you won't find it
tatelev
2017-06-08 09:40
@pragmatic ?the only solution with your current structure is for amazon to change its policy? -> You are likely correct in your asumption but it is an asumption nevertheless. We still have no confirmation that this is an Amazon policy. Hope to have that cleared soon
tatelev
2017-06-08 09:41
?you?re desperately seeking the answer you want, but you won?t find it? -> ouch. what?s that supposed to mean? I?m trying to find information and make informed decisions on a delicate issue where it there is obviously a lot of disagreement and lack of information, I don?t have a bias of what answer I am wanting to receive
tatelev
2017-06-08 09:46
also, reread my previous speculation:
tatelev
2017-06-08 09:47
I said ?what if X is what has made Amazon do Y ??(causality)
tatelev
2017-06-08 09:48
and the at the end I mentioned that Amazon might be misinterpreting something about this
tatelev
2017-06-08 09:49
If you would know how Amazon operates in terms of compliance then you would know that it is not such a crazy speculation to think that they might be misinterpreting or interpreting things in a way that give one less thing to worry about. There are numerous cases where they have done it before, as they just think of covering their ass first and foremost
pragmatic
2017-06-08 09:56
Even if they are - you have to be pretty optimistic to think that a 500B company will care about you telling them they are misinterpreting anything.
tatelev
2017-06-08 09:57
you are asuming that I have asumed that
tatelev
2017-06-08 09:58
it will be good to hear it from them in any case
pragmatic
2017-06-08 09:58
I suppose I was. I'm just not sure what your goal is at this point?
tatelev
2017-06-08 09:58
whatever the answer is
tatelev
2017-06-08 09:58
well, my goal is to have more information before taking any further action
tatelev
2017-06-08 09:59
not sure why that seems not to be welcomed around here, by seeing some subtle hostility lately
tatelev
2017-06-08 10:00
EDIT: ?my goal is to have more information before taking any further action, while sharing information myself at the same time?
pragmatic
2017-06-08 10:01
Sorry if you thought I was being hostile, just when you mentioned about the IRS not updating their forms and the 2017 informational reporting changes, I felt that you were grasping at straws. But it's fair enough to want to get all the information before deciding how to proceed.
tatelev
2017-06-08 10:02
thanks
tatelev
2017-06-08 10:04
when tax experts contradict themselves in such an essential way, grasping at straws just becomes instinctive, at least for me
tatelev
2017-06-08 10:04
most of us do it in our minds, it?s a natural instinct
tatelev
2017-06-08 10:04
I was just ?thinking out loud? that?s all :slightly_smiling_face:
tatelev
2017-06-08 10:05
(I hope I understood what grasping at straws means, never heard it before :slightly_smiling_face: )
tatelev
2017-06-08 10:06
ok, just looked it up: ?to make a futile attempt at something? LOL
tatelev
2017-06-08 10:06
brainstorming is never futile, no matter how stupid the ideas are, it?s just my belief
tatelev
2017-06-08 10:07
I know for a fact that many don?t agree with what I just said, that?s ok
agalt
2017-06-08 10:26
I was an @$$ last night (Central European time) and im sorry.
scorps
2017-06-09 08:15
Just reading through Deloitte France tax highlights regarding corporate taxes: "France operates a territorial tax system. Foreign-source income of french residents generally is not subject to French tax." Anyone have experience with France corporate taxes? Based on that info, am I assuming correctly that if I was considered a french resident owning an offshore business, there would be no corporate taxes on the business's income? https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-francehighlights-2017.pdf
pragmatic
2017-06-09 10:27
Also see: "a foreign company can be a resident in France if it is managed and controlled in france"
scorps
2017-06-09 10:37
Good point! Had my hopes up.
nickc
2017-06-09 18:52
@pragmatic how does that work for me (see my message in new members)? My management is based in the UK, I simply go to the events and that's it. So what is the definition of "managed and controlled"?
pragmatic
2017-06-09 19:07
I'm not qualified to answer that I'm afraid
gregor
2017-06-10 15:08
has joined #taxation-personal
tatelev
2017-06-11 11:23
I exchanged emails with a us lawyer and he said amazon forcing me to complete the tax interview as individual and W-8BEN is correct
tatelev
2017-06-11 11:24
So like this the payments and charges of amazon will have my name and personal address on the invoices, not my LLC
tatelev
2017-06-11 11:24
(I'm not 100% sure about this but almost)
tatelev
2017-06-11 11:25
He said that this it right and would not change anything in terms of the liability
tatelev
2017-06-11 11:27
I now need to figure out if I can operate like this and not to worry with Spain until I take profits out, and pay then income tax in Spain for the profits
tatelev
2017-06-11 11:27
Also need to figure out if this would be efficient or not
simon
2017-06-11 11:37
@tatelev What a mess! You'd think that in 2017 things would be simpler...
tatelev
2017-06-11 11:39
Any of what is being said about Gibraltar, UK LLP could be interesting to setup for me?
tatelev
2017-06-11 11:39
I want simplicity for now
tatelev
2017-06-11 11:40
But also a setup that is not inefficient
tatelev
2017-06-11 11:40
Privacy ideally also
tatelev
2017-06-11 11:41
Am I being naive in believing that operating the disregarded us LLC will provide me that?
tatelev
2017-06-11 11:41
(with us bank)
tatelev
2017-06-11 11:43
I had asumed that USA banks might not share information automatically. Misasumed?
danielabagnale
2017-06-12 03:10
has joined #taxation-personal
scorps
2017-06-12 13:32
@simon On your UK/US incorporation service page you mention no need to file tax return if no local income. When I reached out to RHJ Accounting regarding a UK LLP they advised that a partnership tax return needs to be prepared and submitted for HMRC even if partners and income are non UK. In addition, he mentioned all income, even if not originated in the UK, have to be declared. Is this correct?
simon
2017-06-12 13:46
@scorps Incorrect. When a partnership is owned by non-residents there is no need to declare non-UK sourced income. The PDF below from HMRC provides more details.
simon
2017-06-12 13:48
As to whether a partnership return has to be filed, yes it has. But you only need to write "No UK income" on it.
simon
2017-06-12 14:01
@brian you basically write 0 everywhere and write no UK income in the additional information box. "Explain in box 3.116 ?Additional information?, on page 3 of the Partnership Tax Return"
simon
2017-06-12 14:01
Yes you can file online
simon
2017-06-12 14:01
Takes only a few minutes
scorps
2017-06-12 14:19
Thanks Simon. That changes things.
tatelev
2017-06-12 15:02
Reply from Amazon's tax department:
tatelev
2017-06-12 15:03
Greetings,
Thank you for your patience.
We have received an update from our concerned team which is as follows:
"Kindly inform the seller that they should be completing the tax interview based on their personal information since the LLC is a Single Member LLC and is disregarded. They should NOT complete the tax interview with the disregarded LLC details but instead should complete the Single Owner's details, meaning that when they are answering the first question of 'Are you a U.S. Person', they should be selecting 'No' and then complete the interview with the information of the Single Owner, which is themselves.
The Tax interview details are meant to only collect information for tax reporting purposes and as they have mentioned the LLC is disregarded for tax purposes, meaning they should NOT give the details of the LLC in the tax interview and should ideally submit a W8 form with their personal information."
Also, I see that you have retaken your tax interview on 06/08/2017, associated with the name ?(My full name)? and it has been validated.
As per your selection via the tax interview, a W8 form has been built that certifies your Non US status and hence your income is not subject to the IRS tax reporting.
Hope this helps.
pragmatic
2017-06-12 15:05
That all makes sense, but the "profit notices" or whatever that they send you, should still be under the LLC name
pragmatic
2017-06-12 15:05
doesn't seem like they do it that way which is annoying
tatelev
2017-06-12 15:05
they call them "tax invoices"
tatelev
2017-06-12 15:06
I will reply insisting on that question, in case there is a way to change that out of the normal interface
pragmatic
2017-06-12 15:06
ah
pragmatic
2017-06-12 15:06
I guess that kind of makes sense then
pragmatic
2017-06-12 15:06
But it's still weird that you don't write your LLC name anywhere
pragmatic
2017-06-12 15:06
from a liability standpoint
tatelev
2017-06-12 15:06
@brian what you say it is not 100% accurate
tatelev
2017-06-12 15:07
when the tax interview(on Amazon) is exactly the same way but answering "Us Person - YES" then the fields change completely and instead of putting your personal details, you put your LLC's details
tatelev
2017-06-12 15:08
that's why what you said was not 100% accurate
tatelev
2017-06-12 15:09
you said "That?s exactly the way taxes are always done for Single Member LLCs"
tatelev
2017-06-12 15:09
we are talking about the way that Amazon makes you fill your personal details instead of your LLC's details
tatelev
2017-06-12 15:09
so your statement "That?s exactly the way taxes are always done for Single Member LLCs." is not 100% accurate, if you were referring to the same thing I was talking about
tatelev
2017-06-12 15:09
which was Amazon's tax interview
tatelev
2017-06-12 15:10
Amazon is letting US disregarded entities write the LLC details
tatelev
2017-06-12 15:10
no @brian
tatelev
2017-06-12 15:10
I'm 100% sure
tatelev
2017-06-12 15:11
when you choose in Amazon's tax interview "Us person = yes" then the fields presented are different
tatelev
2017-06-12 15:11
you must write your LLCs details
tatelev
2017-06-12 15:12
you seem to be somebody only interested in being right
tatelev
2017-06-12 15:12
I don't care about that
tatelev
2017-06-12 15:12
so ok, whatever you say
tatelev
2017-06-12 15:24
you are so commited to being right that you just won't realize that you are arguing about something that you have completely misunderstood about what I said and why I said it
tatelev
2017-06-12 15:24
however I will not put the effort in clearing it up
tatelev
2017-06-12 15:24
just reread
tatelev
2017-06-12 18:16
I just talked to tax advisors in Spain and they suggested against not disclosing my LLC to Spain, they said the risk of Spain noticing, specially as soon as I start bringing any money, is considerable:disappointed:
tatelev
2017-06-12 18:17
My idea was to just pay taxes in Spain for profits brought in after distributions
tatelev
2017-06-12 18:17
but they said this would probably sooner or later be noticed
tatelev
2017-06-12 18:18
and suggest that I either:
tatelev
2017-06-12 18:18
a) declare in Spain my US LLC as spanish tax resident and pay its 25% corporate tax
tatelev
2017-06-12 18:18
or
tatelev
2017-06-12 18:18
b) that I pay every year income tax in Spain on profits of the LLC (distributed or not)
tatelev
2017-06-12 18:19
any comment about all this, very welcome
maxsuur
2017-06-12 18:54
Why don't you just relocate to a territorial taxation country @tatelev ?
jase
2017-06-12 19:25
Weird, I can't make it check the box more than once :smile:
tatelev
2017-06-12 19:32
I have been given this suggestion often around here
tatelev
2017-06-12 19:34
For some people, when we choose on where to live, we don't look at taxation
tatelev
2017-06-12 19:35
I really don't
tatelev
2017-06-12 19:36
There are many other factors we(me and my partner) consider but taxation never comes up
rtiagm
2017-06-13 02:20
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simon
2017-06-13 02:46
@tatelev It makes sense though. There is no distribution with an LLC as far as taxes are concerned, it is fiscally transparent.
tatelev
2017-06-13 04:54
@simon what makes no sense? And when member/s take money out, isn't that called distribution? Taking money out, hower it's called.
simon
2017-06-13 04:57
I said it makes sense. And that from a tax perspective there is no concept of distribution because the LLC is not a separate entity.
tatelev
2017-06-13 04:57
Ah
tatelev
2017-06-13 04:58
Basically the spanish advisor don't recommend operating the LLC under the radar
tatelev
2017-06-13 04:59
Even if I declare the profits when taking them out into Spain
simon
2017-06-13 05:01
That sounds risky. Maybe from his experience he believes it unlikely you'll get caught?
tatelev
2017-06-13 05:07
Just the opposite
tatelev
2017-06-13 05:07
He believes likely
tatelev
2017-06-13 05:09
That's why they recommend either of the 2 options I mentioned:
tatelev
2017-06-13 05:10
a) declare the LLC in Spain as a spanish tax resident company and pay 25% tax each year
tatelev
2017-06-13 05:11
b) pay each year as income tax in Spain the profit(irrespective of weather taken out or not)
tatelev
2017-06-13 05:20
It's not so much paying that I'm gonna hate
tatelev
2017-06-13 05:20
More the spanish compliance burden
tatelev
2017-06-13 05:21
and the spanish bureaucreacy
simon
2017-06-13 05:41
I guess option B is the easiest one
simon
2017-06-13 05:42
It does not increase your compliance burden much, you simply have to pay more
johncitizen
2017-06-14 07:51
Panama papers fallout?
agalt
2017-06-14 18:34
The article mentions brittish virgin Islands
stoneagezen
2017-06-15 21:06
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stolzlos
2017-06-17 08:35
has joined #taxation-personal
simonbcr
2017-06-17 09:53
Hi guys I?m new to the club :slightly_smiling_face: I?m German, live in Thailand (with a Thai wife) and have an app business in Hong Kong.
I saw there are a few experts on Thailand @harvie @simon @pedrodemendez @pragmatic ! From what I?ve read from previous posts, I should file a tax return for the year 2016 (I lived here from Jan 2016). So I use my savings and pay no taxes.
My question is, will I need to pay a penalty because i missed the deadline?
My second question is, has any of you successfully applied for a tax exempt on foreign sourced income in Hong Kong? My agency told me it?s not easy and may be very expensive. I?m asking because I hired a couple of freelancers and pay them in cash. IF I don?t get a tax exempt I?d rather claim these expenses in HK (and ask for bills etc.)
harvie
2017-06-17 11:17
Hi @simonbcr you can only file a return for 2016 from Jan-March 2017. I tried to file for 2016 and they said the deadline was March 2017. You'll first need to apply for a tax resident ID assuming you don't have one.
simonbcr
2017-06-17 11:41
mh ok, so I don't have this ID. So they didn't let you file taxes at all?
harvie
2017-06-17 11:49
Yes, you cannot apply without a tax ID. To apply you need a lease agreement in your name to show proof of address and your passport showing you stayed 180+ days in Thailand.
harvie
2017-06-17 11:49
Nobody there speaks English fwiw either.
simonbcr
2017-06-17 11:53
ok thanks! I'll try it together with my wife, she's Thai so that may make it easier
evl4r
2017-06-17 12:07
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yuli
2017-06-18 18:14
Anyone has a recommendation for someone I can take more 'legal advice' when it comes to taxation? I was recommended for Alexandar Hay from the community here, but he is a bit unavailable with his times.
Looking for a more legal advice, in regards to investing in the USA taxation there with my status.
Thank you :slightly_smiling_face:
rtiagm
2017-06-20 07:47
Has any EU citizens here obtained tax residency in Malta? I'm interested in obtaining tax residency in Malta but unsure about some details.
pedrodemendez
2017-06-20 08:49
I read some messages in a group about something changing in Thailand next year. About reporting of the source of remitted monies. Anybody here know if something is changing in regards to remitting money and related taxing as discussed here in the last two months?
chaostar
2017-06-20 18:43
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fish
2017-06-21 04:59
has joined #taxation-personal
pascal
2017-06-21 11:26
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v
2017-06-21 11:38
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mikeseo
2017-06-21 12:11
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clr
2017-06-21 15:00
@rtiagm I've just done that so feel free to ask or PM me with questions.
brutus
2017-06-21 18:46
EU preparing more taxation anti-avoidance rules... now anyone proposing such scheme or any using any will have to report them to the authority...
http://www.agefi.fr/sites/agefi.fr/files/fichiers/2017/06/factsheet_embagoed_002_0.pdf
brutus
2017-06-21 18:48
That one will be interesting with countries like Malta, Estonia, Ireland, NL...:
Use of tax jurisdictions with no or low corporate tax rates, or which find themselves on the upcoming EU list of non-cooperative tax jurisdictions
agalt
2017-06-21 18:49
Every time an EU passport sounds good it helps to see articles like these. @brutus Thank you!
brutus
2017-06-21 18:56
@brian not a joke, friend of mine just shared with me. Was published today in that French economical newspaper (use Google Translate):
http://www.agefi.fr/regulation/actualites/quotidien/20170621/bruxelles-durcit-ton-contre-intermediaires-fiscaux-221448
agalt
2017-06-21 18:57
Will the french multi-nationals start renouncing like the citizens in the states?
brutus
2017-06-21 18:59
Well, this is supposed to be applied at EU level (Bruxelles), not just France
agalt
2017-06-21 19:00
Yuck. Hope they fail miserably at enforcing it.
brutus
2017-06-21 19:01
Seems similar to regulation passed few month ago/last year in UK aiming at forcing freelance payroll companies to submit their tax optimization schemes....
brutus
2017-06-21 19:04
EU was supposed to be a big market where concurrence would drive down prices and offer more opportunities... Looks more and more like a socialist planned economy. Everything at same price all around EU, from big corporations present everywhere (monopoly situation). And you can only access local goods/services: bank account, insurance... or even mobile SIM cards!!
pragmatic
2017-06-21 20:13
brutus
2017-06-22 07:25
@pragmatic Yes looks like it is the last part of that package:
General anti-abuse rule: to counteract aggressive tax planning when other rules don?t apply.
agalt
2017-06-22 07:34
How can they possibly enforce this?
pedrodemendez
2017-06-22 07:47
Better read up on the EU's blockchain monitoring program then :upside_down_face:
pedrodemendez
2017-06-22 07:49
pedrodemendez
2017-06-22 07:50
Block you from buying products
pedrodemendez
2017-06-22 07:50
I think blockchain can be a temporary escape
pedrodemendez
2017-06-22 07:50
Longer term maybe not
pedrodemendez
2017-06-22 07:51
With AML/KYC
pedrodemendez
2017-06-22 07:52
Peer to peer no problem, unless they get ISP's to participate
pedrodemendez
2017-06-22 07:52
In blocking ports
2017-06-22 07:53
This message was deleted.
pedrodemendez
2017-06-22 07:53
I am 95% into crypto, so please use it :-) But I am always keeping track to see if i need to take steps
pedrodemendez
2017-06-22 07:54
Me too
maxsuur
2017-06-22 09:09
brian: you can even do the transaction using a radio. I heard Antonopoulos talk about it somewhere in the past.
maxsuur
2017-06-22 09:11
it's on his last book for sure.
maxsuur
2017-06-22 09:11
which is a transcription of his best talks
maxsuur
2017-06-22 09:11
crypto is unstoppable
maxsuur
2017-06-22 09:13
so, radio or a simple mobile phone. something like that now I recall correctly. But the point is there's always a way, even in worst of circumstances.
maxsuur
2017-06-22 09:14
:smile:
stolzlos
2017-06-22 15:09
the biggest risk in cryptos is obviously the exchanges for they can either blow up or state can force the exchange to lock down your (any) account at any given moment
stolzlos
2017-06-22 15:10
chinese exchanges already had a trial run for that
maxsuur
2017-06-22 15:17
Hence the importance of diversification of exchanges too
otkeedca
2017-06-22 18:51
exchanges will always be the weak point. Peer to peer trustless exchanges could help, unless the gov finds out you're exchanging and charges you for acting as an illegal money transmitter
otkeedca
2017-06-22 18:52
I think you can only really be safe if all your goods and services are bought and paid in crypto, and you hold your funds in crypto without going to fiat
otkeedca
2017-06-22 18:52
but then you're subject to wild price flux
millnmd
2017-06-23 04:34
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mysteir
2017-06-23 05:30
@otkeedca The challenge with paying for all your goods in crypto is... well.. you can't. I put a few hundred bucks on BTC on my iphone wallet just to have fun & pay for a few things in BTC- you wouldn't believe how few merchants accept them. It's not like I can go to the corner store for milk and pay in bitcoin or ether. I do hope that day will come.
roman
2017-06-23 11:27
@mysteir there are credit cards that work on crypto. You load them with bitcoins and just use as regular cards. There are all kinds of fees, of course so it's not economical sometimes.
roman
2017-06-23 11:28
And there are other solutions too.
maxsuur
2017-06-23 11:29
I am using "Bitwala" , germany-based
maxsuur
2017-06-23 11:30
There's always ways, @mysteir
roman
2017-06-23 11:38
I think it mostly depends on desired primary currency.
roman
2017-06-23 11:39
I don't have the answer which is best. But it's easy. All of them usually lust it on their site.
roman
2017-06-23 11:39
I'm not using this much so I don't keep up to date. I have one card just as an experiment :)
roman
2017-06-23 11:40
But I know cryptopay has both usd and eur
maxsuur
2017-06-23 11:40
Bitwala is fine if you're based in Europe
roman
2017-06-23 11:42
Well it's not fair to say that. Fiat is just a proxy to other appreciating assets.
roman
2017-06-23 11:45
My point is that you can use that dollar to purchase crypto any time.
stolzlos
2017-06-23 11:46
@brian whilst the dollar did depreciate a lot since 2001, since 2014 it made quite a stunning comeback
stolzlos
2017-06-23 11:46
and I think that run is only halfway done
roman
2017-06-23 11:47
Poor Canadian dollar. Tanked so much since 2014 :/
stolzlos
2017-06-23 12:09
it really is appreciating although you can only tell by comparing it against other currencies like EUR, AUD, GBP, SEK, etc. It is up against all of them. Even gold.
stolzlos
2017-06-23 12:11
and yes. My opinion is that it eventually will turn into a bubble and then crack, like in the past
stolzlos
2017-06-23 12:12
well, there are a few fixed currencies like the HKD
stolzlos
2017-06-23 12:12
and you are right. There are some appreciating even stronger than the USD
stolzlos
2017-06-23 12:14
certainly. against bitcoin the dollar was murdered. Down 99.9% or so? :wink:
2017-06-23 12:17
This message was deleted.
stolzlos
2017-06-23 12:19
well, can't argue with that. In the end it is just another temporary anomaly. It will follow the rest of course.
stolzlos
2017-06-23 12:19
bit it is still better than the Euro which I unfortunately have to live with and do as little as possible
stolzlos
2017-06-23 12:21
recently heard that UK soccer players started to demand contracts in Euro.
stolzlos
2017-06-23 12:21
out of the frying pan into the fire.
pascal
2017-06-23 14:57
In practice, this means that it is possible to live in Chile tax-free up until citizenship is granted provided that best practice guidelines are followed and that a proper structure is in place.
In most cases, this simply means registering a resident company abroad, keeping the proceeds from that company abroad and not engaging in any business in Chile.
Source
https://www.freedomsurfer.com/chile/
"Keeping the proceeds from that company abroad" = Keeping the income provided by this company abroad ?
gregor
2017-06-24 15:16
Any Canadians abroad freelancing? Wondering what your experience has been with non resident tax status and working remotely?
gregor
2017-06-24 15:18
That is a real "learning advantage"
sdfk787
2017-06-25 03:00
you have to pay exit tax
sdfk787
2017-06-25 03:00
capital gains on your business as if it was sold at FMV
mescos
2017-06-25 16:29
@gregor - There are two schools of thought amongst the Canadian accounting/tax community about how to achieve non-resident tax status:
Option #1) Submit an NR73, which is super invasive and invites unnecessary scrutiny. You get a decision immediately.
Option #2) Quiet disclosure route. You submit (or amend) your last tax return for the year that you left Canada and indicate on that return the specific date that you left (and thus ceased to be a resident). Then, CRA has 3 years to question/dispute your return and non-residency status. If you don?t hear from them after the 3 year mark, you?re a non-resident. With the quiet disclosure route, you technically have to wait three years to get a formal decision about your tax status.
gmarkey
2017-06-26 00:15
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roman
2017-06-26 01:34
@mescos
> Option #1) Submit an NR73, which is super invasive and invites unnecessary scrutiny. You get a decision immediately.
Have you gone through this process or know someone who has? I?m wondering how invasive is it?
Thanks.
mescos
2017-06-26 03:11
@gregor - Just google ?NR73, CRA?, the document is publicly available. It?s the Determination of Residency form. You can look at the questions and decide for yourself. One thing to keep in mind is, regardless of your answers, the CRA can still rule against you and your non-residency status. With this option, you are asking them to evaluate your answers and make a determination on your residency status. In the second option, you are simply amending a return and informing them.
gregor
2017-06-26 03:41
@mescos Thanks. I'm familiar with all that and the forms. Looking to hear from other freelancers what route they have gone.
sdfk787
2017-06-26 17:47
it depends on your situation
sdfk787
2017-06-26 17:47
if you have minimal assets and will not be planning around minimizing your 'exit tax' then why not go route #1
mescos
2017-06-26 18:51
@gregor - Whether or not the person is a freelancer or not is the issue. As @sdfk787 said, it really depends on your personal situation.
For example, do you have any ties to Canada? Do you have ties to another country? Are you able to successfully complete every question on the NR73 in the way that CRA desires? These are ?Yes? and ?No? answers, with no room for explanation.
Many freelancers/nomads/PTs who don?t have ties to another country or residency in another country will have problems completing the Statement of Residency section, amongst others.
For example, for the residency questions, the CRA will also most likely ask you to provide proof. If you can?t provide sufficient proof, then there is strong chance that CRA will deny your request for non-residency.
That said, I would suggest looking closely at the questions on NR73 and determine whether or not you are able to provide the answers (and proof) that the CRA will be looking for before choosing to go that route.
gregor
2017-06-26 21:59
@mescos again, not looking for advice, looking to hear from Canadian freelancers and what their experience has been. Are you a Canadian freelancer living abroad?
mescos
2017-06-26 23:49
@roman, see messages above.
mysteir
2017-06-28 04:21
I sought legal advice before departing Canada @gregor - I feel that having that legal memo specifically outline my situation and how it pertains to Canadian tax law will be helpful in case of a future audit. I'm not a freelancer but do run a few business' and had to sever many (most) of my Canadian ties.
roman
2017-06-29 12:01
@mysteir If you don?t mind me asking, and feel free not answer, of course. But did you have any real estate in your name in Canada? Did you have to sell it? Did you have any structures in your name (corps, trusts)? Did you have to get rid of them too? I am just wondering to what extent one has to severe the ties. Thanks.
mysteir
2017-06-29 14:31
@roman I had a home with a tenant. I could have kept renting it out- but it would have been complex. As I recall it involved having a third party manage the property (can be your parents etc... or can overpay accountants to do it) - the third party would have had to remit part of the income to the Taxman every month, and file yearly. Was a bit of a pain in the ass so I got my tenant to vacate and sold before departure to clean my hands of it.
On the business front, I went through a deemed disposition on my shares - so basically, as I understand it, it's like I sold my shares before departure (and the Taxman get his take).
I also had to get rid of an investment account, credit cards, health care.. and other things I'm probably forgetting. It's not easy, but happy I did it.
dsim
2017-06-29 14:51
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roman
2017-06-29 15:06
@mysteir good info, thanks. I?ve read somewhere that it is possible to keep TFSA/RRSP sometimes. As I?m thinking of leaving Canada only for 5 years. And then return eventually, or maybe not :slightly_smiling_face: But my parents are here and they are getting older, so might have to at some point.
mysteir
2017-06-29 15:24
@roman You can keep TFSA and RRSP. What I don't now are the tax implications when/if you decide to withdraw them as either a non-res or returning res. I hear you on the parents- that's a big consideration. All in all emigrating from your own country is a tough decision (certainly was for me).
roman
2017-06-29 15:25
I'm an immigrant in Canada too. My roots have been ripped out when I was 16. I have no problem relocating at this point.
stolzlos
2017-06-29 17:03
could anybody provide me with a good read in regard to foreign sourced income and taxation of the same?
stolzlos
2017-06-29 17:06
For example, I have a business in another country (ex. pure tax haven) and generate profits but (theoretically speaking) never pay them out to myself and instead just accumulate them in a corporate account, do I have to pay taxes if I reside in a country that taxes foreign sourced income?
stolzlos
2017-06-29 17:07
sorry, I assume that question has been asked a thousand times over
stoplight
2017-06-30 02:32
@stolzlos ..can you be a bit more specific with your countries? Different countries..different rules.. :slightly_smiling_face:
stolzlos
2017-06-30 03:46
@stoplight to be explicit, I reside in Germany and would like to legally shield myself from paying taxes on trading profits. I don't live on my trading profits for I have an income here. I only intend to accumulate trading profits for the foreseeable future. I read about Belize and an IBC but I wondered whether the accumulation of wealth counts as foreign sourced income or not.
mikeseo
2017-06-30 08:39
google "germany cfc laws"
mikeseo
2017-06-30 08:40
if you own/control the ibc while residing in germany, germany will probably tax you
stoplight
2017-06-30 14:55
@stolzlos ?I agree with @mikeseo ?Germany has residence based taxation so yes most likely they will tax you for your foreign sourced income?whenever you send money to yourself while you?re there?could can be considered income?
stolzlos
2017-06-30 15:51
@stoplight @mikeseo understood and that is what I thought. So does that mean that if I just accumulate profits but never pay them out to myself while I am under german tax laws that the profits won't be taxed?
stolzlos
2017-06-30 15:56
I intend to leave Germany eventually for HK but until I can I would like to minimize (eliminate) taxation on my trading. As I said, I will not pay myself a salary from my trading profits and thus not send any of these profits back home. What do you think?
pragmatic
2017-06-30 16:25
@stolzlos No, that's not what they said. It would not work like that. Hell, it would be awesome if it was that simple.
pragmatic
2017-06-30 16:27
Firstly, a company registered in an IBC is a non-resident company. That means that it is not a resident for tax purposes in Belize or whichever jurisdiction you chose. Rather, it is a resident in the country of it's owner.
pragmatic
2017-06-30 16:29
Now, even if you did register a resident company in some jurisdiction, you would still have place of management and CFC laws to worry about.
Place of management laws would mean that a company that is controlled and managed from Germany, is a German tax resident company.
CFC laws mean that a company in a low tax jurisdiction that is at least 50% owned by a German resident and receives passive income has to pay German taxes.
pragmatic
2017-06-30 16:32
There may be some complex structure you can set up which can get around these, and would probably involve you technically not owning the company, but it's certainly not as simple as registering a Belize IBC.
stolzlos
2017-06-30 18:56
@pragmatic even though that is not what I wanted to hear, thank you for clarification.
agalt
2017-06-30 20:01
A combination of legal tools is necessary for many of us. Simply getting an llc or an IBC could be an expensive mistake. I wasted thousands (usd) on a Nevis IBC and ended up not using it since it was set up incorrectly. Sit down and ask yourself : where am I a citizen of, where am I a tax resident of, what do I sell, where do I want to take payments, how much privacy do I want, what tax advantages can I use globally to simplify my business and life.
rtiagm
2017-07-01 13:56
I'm reading deloitte tax document on Malta. They mention the following "Income from foreign sources would be chargeable to Malta income tax as from the year in which the special tax status was granted only if remitted to Malta (?remittance basis? of taxation) and at a flat rate of 15% with the possibility of claiming double taxation relief but subject to the minimum annual tax liability referred to below."
"A non-refundable minimum annual Malta income tax payment payable by the beneficiary amounting to ?15,000 in respect of income from foreign sources that is remitted to Malta, applies in terms of the TRP Rules."
I'm confused about the part that says "A non-refundable minimum annual Malta income tax payment payable by the beneficiary amounting to ?15,000".
What does this implies, If I remit let's say ?10,000 or ?20,000 a year to Malta ?
pragmatic
2017-07-01 14:09
It means you need to pay a minimum tax of 15k euros
pragmatic
2017-07-01 14:09
That's only if you pick that residency program though
pragmatic
2017-07-01 14:09
Malta Ordinary Residency for EU citizens has no minimum
rtiagm
2017-07-01 14:10
and the tax is 15% for money remitted to Malta?
rtiagm
2017-07-01 14:10
(for EU citizens)
pragmatic
2017-07-01 14:11
Yes, for that program
pragmatic
2017-07-01 14:11
not for the ordinary residency program
rtiagm
2017-07-01 14:20
ok, great. I hope to obtain Malta residency as an EU citizen, I assume that's the ordinary residency program, not the one deloitte mentions. I also plan to remit some money to a Maltese bank account and pay tax to strengthen my ties there. I guess the tax rates that apply to me then are the following: https://ird.gov.mt/services/taxrates.aspx
pragmatic
2017-07-01 14:21
yup
harvie
2017-07-03 10:01
@simon I've been told from my HK accountant I'll need to pay income tax in Hong Kong (as the director of my HK business) as Thailand only taxes income remitted, not ALL income, therefore it may not trigger the double tax treaty.
1. Am I right to think that if I send 80% of my personal income into Thailand from my business, the double tax treaty would cover that 80% of my income, and the other 20% I would need to pay in Hong Kong?
2. I just looked at the HK income tax lows and wow, they are amazingly low, so low it's unreal. It seems if I pay myself a salary of around $30k per year and pay for flights etc on business expenses, this setup looks more ideal and less work than if I even bothered with option 1.
I am setting up a call with him tomorrow, but if you or anyone else has input that would prepare me better.
gregor
2017-07-04 02:04
@simon hi Simon, I emailed you and just making sure you got my email. Picking up my e-residency on the 19th and want to plan the business setup we had discussed
pascal
2017-07-04 07:25
harvie
2017-07-04 10:51
anyway of reading that article without having to register to the site
max
2017-07-04 13:03
@harvie
max
2017-07-04 13:04
Step one is to make the tax rules the same in every European country. The EU loves to give revolutionary ideas tedious names in order to deter scrutiny, and this one is a gem: the Common Consolidated Corporate Tax Base or CCCTB. The tax codes of all 28 member states will be replaced by a single code. Legal definitions will be the same in Estonia and Portugal. Taxable allowances and deductions identical in Italy and Hungary. Then come harmonised tax rates.
French president Emmanuel Macron, is leading the push. He ran for the presidency on a manifesto calling for convergence of EU corporate taxation, and singled out Ireland causing market bias with its 12.5 per cent rate, half his preferred rate for France. Enda Kenny, the former Irish taoiseach, was mightily displeased at the assault, reminding Macron that tax is ?our business?.
French president Emmanuel Macron, is leading the push. He ran for the presidency on a manifesto calling for convergence of EU corporate taxation, and singled out Ireland causing market bias with its 12.5 per cent rate, half his preferred rate for France. Enda Kenny, the former Irish taoiseach, was mightily displeased at the assault, reminding Macron that tax is ?our business?.
agalt
2017-07-04 13:06
Thanks max for posting! @max good info
max
2017-07-04 13:07
@max uploaded a file: https://freedomsurfer.slack.com/files/max/F64EFU3BR/emmanuel_macron_3-600x315.jpg
max
2017-07-04 13:10
I do no think these pana european tax law proposals are going to be well received in countries like Poland or Hungary
agalt
2017-07-04 13:12
Hopefully the EU will split. I really like Hungary (people, culture, etc) it is right next to Slovenia. They don't apologize for their cultural standards.
agalt
2017-07-04 13:13
The UK is nice also after you leave Birmingham, and head to Wales. I'm biased though. Dad's family is Welsh.
max
2017-07-04 13:13
I have no words to describe what I feel when I see things like this. Europe is coming to an end, very sadly
agalt
2017-07-04 13:15
Come to eastern Europe. They don't follow the rules or embrace the migrants, high taxes or nonsense.
max
2017-07-04 13:17
lived in the UK, but I am not sure things can get better in places like, Luton, London, Birmingham. It seems the country has already passed a point of no return
agalt
2017-07-04 13:18
If you get sick of Europe come to Tbilisi with the other freedom surfers. It is not for the weak though. Driving is crazy, I've been shot at here (wrong place - wrong time), and if you don't pay a bill at a restaurant you get assaulted out back if you are at the wrong place.
max
2017-07-04 13:18
And with mayor of London saying what he is saying I would not want to live there any more. Such a shame, such a beautiful city
max
2017-07-04 13:19
Thanks Agalt. I will keep bouncing for now. Georgia is on my list to visit in 2018
agalt
2017-07-04 13:19
The London mayor is garbage. I can't believe the royal family let that happen.
agalt
2017-07-04 13:21
That makes sense I've been in: Slovenia, Italy, Bulgaria Croatia, Serbia, Bulgaria, and Macedonia, Albania, and Georgia in the last 4 months
mattbellme
2017-07-04 13:34
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pragmatic
2017-07-04 13:38
Interesting
pragmatic
2017-07-04 13:38
I don't see the Eastern Europeans letting the EU impose tax laws on them
pragmatic
2017-07-04 13:38
Imagine raising taxes in a country like Bulgaria where average salary is 400 euros a month
pragmatic
2017-07-04 13:39
Also, we saw the reaction of Poland, Czech, Hungary and Slovakia to imposing refugees on them... they didn't allow it
pragmatic
2017-07-04 13:41
However, this CCCTB proposal seems to be about corporate taxation, rather than personal income tax: https://ec.europa.eu/taxation_customs/business/company-tax/common-consolidated-corporate-tax-base-ccctb_en
pragmatic
2017-07-04 13:42
@max What did the London Mayor say?
max
2017-07-04 13:51
among others he states that: terrorist attacks are ?part and parcel? of living in a big city
max
2017-07-04 13:52
which to an extent might be true so I decided not to live there :wink:
jemmasta
2017-07-04 13:56
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evl4r
2017-07-04 15:52
I guess he's right though. It's that or the opposite side pushing surveillance.
marc
2017-07-04 19:02
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stoplight
2017-07-04 22:59
seriously doubt that all EU countries will agree to it?but then again?only time will tell?I personally like the EU for its borderless policies?its nice to travel that easy?having that freedom to move around without much fuzz is just really great and i?m having that same experience here in the Caribbean?
janemac
2017-07-05 12:10
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jemmasta
2017-07-06 07:42
can't really be sure what EU comes up next. anyone noticed they approved the so called link tax just while back?
jemmasta
2017-07-06 11:16
and they voted in favour on that
jemmasta
2017-07-06 11:19
officially ancillary copyright
jemmasta
2017-07-06 14:09
exactly, that is just plain stupid legislation. So like I said, anything can come up next. It seems the decision makers doesn't have a clue what they are voting on. :smile:
pascal
2017-07-06 18:35
Here is a summary of that article : A journalist of the Telegraph of London has published a chronicle on the capture of power by the European Union. Charles Orton-Jones accuses the EU of taking over the taxation system of its member countries and creating its own army. Under the title "Thank God, the United Kingdom is leaving," the journalist offers British holidaymakers preparing for a trip to the European continent a half-serious, half-serious argument so that they know what to say about the Brexit in Sipping their half with natives. But most importantly, according to Orton-Jones, the Brexit has arrived at the right time at the very moment when Brussels is about to move on to higher gear, whether in terms of taxation or defense. We did well to leave, in short!
Let us note in passing this peculiarity of the British press: the Eurosceptic voice is expressed easily in the main media.
The unification of Europe goes beyond the Lisbon Treaty
Charles Orton-Jones poses the problem: "In recent months, the EU has opened up new fronts. Taken together, they prove that the status quo is not an option. Either we leave or we join the march towards a unified state ". Are the other member countries of the Union aware? In any case, they are left with little choice ...
The first area is that of the tax authorities, theoretically outside the sphere of competence of the European Union. It is up to the member countries to fix the levels of taxation. "Nevertheless, a plan is under way to harmonize the taxes," says the author.
"First step: harmonize the tax rules of all European countries. The EU loves to give boring names to revolutionary ideas in order to divert attention; It is a real jewel: "Common consolidated tax base for corporation tax" or CCCTB. The tax codes of the 28 Member States will be replaced by a single code. The legal definitions will be the same in Estonia and Portugal. Taxable or deductible allowances will be the same in Italy and Hungary. Then come the harmonized tax rates. "
Tax, taxation, army: towards a single law, a single vote for the EU
Of course, the CCCTB is about corporation tax. And only that one. But the journalist noted that the real objective far exceeds this one area. A tweet from Pierre Moscovici dated June 28 clearly states the goal, under the hashtag # FairTax2017: "Inequalities in income and wealth have reached an unprecedented high. Taxation has a key role to play. " On the road to socialism!
The article points out that Emmanuel Macron is at the head of this movement, who has made the harmonization of the corporate tax one of his campaign promises and which has irritated Ireland by denouncing his rate at 12 , 5%, half less than the unified rate dreamed by Macron for Europe.
"On Wednesday, if there had ever been any doubt, Pierre Moscovici, European Commissioner for Economic and Financial Affairs, put an end to it. He said EU control of taxes is essential to "our mission", expressing support for a pan-European tax on financial transactions related to the exchange of shares and bonds. Income and welfare taxes follow, he said, "continues Charles Orton-Jones, commenting," Money is obviously power. When the EU seizes the right to impose, it acquires a right of steel over the Member States ".
stoplight
2017-07-06 22:21
madness! hahah..
mrblonde
2017-07-08 15:01
Can anyone recommend a consultant or a guide etc on the latest territorial tax set up situation up in Taiwan? Looking for advice
mikeseo
2017-07-08 15:33
no but maybe something interesting about taiwan tax here http://nomadcapitalist.libsyn.com/089-tim-lai-its-becoming-more-acceptable-to-be-a-nomad
mrblonde
2017-07-08 15:39
Ok thanks mike will check it out :+1::skin-tone-2: thanks for sharing
agalt
2017-07-08 15:40
@stoplight spends time in Tiwan. Maybe he could share his experiences or opinions on the above podcast?
mrblonde
2017-07-08 15:42
Any feedback much appreciated, really want to explore it as a potential future residency, and if it's still tax efficient
agalt
2017-07-08 15:43
why are you interested in Tiwan? That is the question.
mrblonde
2017-07-08 15:47
Food, people, safety, infrastructure, business opportunities, not too many westerners beside English teachers and business visitors ... many reasons
otkeedca
2017-07-08 20:50
I live in Taiwan and have been researching this myself lately
otkeedca
2017-07-08 20:52
I'm out of the country at the moment, but I am planning to get everything sorted out with a professional upon my return, so I would also appreciate any recommendations if anybody has them
otkeedca
2017-07-08 20:55
But from what I've looked into myself, they've recently introduced Place of Effective Management rules into the tax act, which could make a foreign company a Taiwan resident for tax purposes if it meets the 3 criteria they set out in the act
otkeedca
2017-07-08 20:55
but it seems pretty easy to get around these criteria
otkeedca
2017-07-08 20:58
Take a look at the Income Tax Act, or a summary here of the new rules: http://www.ey.com/gl/en/services/tax/international-tax/alert--taiwan-issues-final-regulations-on-controlled-foreign-company-rules-and-place-of-effective-management
stoplight
2017-07-09 00:25
@agalt ..sadly I haven?t been in Taiwan for some time and my information is out of date?I also need to reconnect with people on the ground?
stoplight
2017-07-09 00:26
@otkeedca ?I hope you could share with us your experience as well?I need to brush up on my Taiwan info?
rtiagm
2017-07-09 14:53
I just read the following about Cyprus "In Cyprus where we live today, I pay no tax on foreign income as long as I am outside Cyprus borders more than 90 days per calendar year." and "As we now are tax residents in Cyprus I should normally pay my tax here, but because of the special tax scheme Cyprus has for workers who work for a non-Cyprus company and work outside Cyprus for more than 90 days per calendar year I pay no tax or social contributions".
rtiagm
2017-07-09 14:53
Is anyone familiar with Cyprus as a residency option for EU citizens?
agalt
2017-07-09 15:09
only what happened to their banks a few years ago.... The doom porn was fantastic on zerohedge regarding this
agalt
2017-07-09 16:30
Hopefully not. I don't wish a seized bank account on any reputable.
agalt
2017-07-09 16:31
*anyone reputable
pascal
2017-07-12 21:22
According to South Africa's largest seer (Nikolaas van Rensburg. The South African army used its predictions during the Second World War),
1) the Third World War will occur in a few years;
2) after the Third World War, the English language will no longer be taught and practiced.
Consequence: we must learn another language quickly.
Here is the latest OECD tax reform ( in french ) :
Lors de l'audition de mercredi, le rapporteur a précisé que «la présente affaire révèle les carences de la base juridique actuelle».
En 2015, l'OCDE avait annoncé son intention de redéfinir la notion d'établissement stable, afin d'éviter ce genre de situations.
Plus d'une soixantaine de pays ont voté un accord multilatéral, qui doit prendre effet à partir de 2018.
Des multinationales américaines pourraient être impactées par ce changement de règles.
Source
http://www.lefigaro.fr/secteur/high-tech/2017/06/14/32001-20170614ARTFIG00290-google-pourrait-echapper-au-redressement-fiscal-en-france.php
Ce rapport propose des changements à apporter à la définition de l?établissement stable figurant dans le Modèle de Convention fiscale de l?OCDE afin de s?attaquer aux stratégies utilisées pour éviter d?avoir une présence imposable dans un pays au regard des conventions fiscales.
À l?issue de ces modifications, lorsque les activités qu?un intermédiaire exerce dans un pays ont pour finalité d?aboutir à la conclusion régulière de contrats avec une entreprise étrangère, cette entreprise devrait être considérée comme ayant un lien imposable suffisant dans ce pays, sauf si l?intermédiaire accomplit ces activités dans le cadre d?un commerce indépendant.
Ces modifications limiteront également l?application d?un certain nombre d?exceptions à la définition de l?établissement stable aux activités ayant un caractère préparatoire ou auxiliaire, et empêcheront de pouvoir prétendre à l?avantage de ces exceptions en fragmentant un ensemble économiquement cohérent en plusieurs petites activités ; enfin, elles porteront sur les situations dans lesquelles l?exception applicable aux chantiers de construction est contournée par le fractionnement de contrats entre entreprises étroitement liées.
Sources
http://www.oecd.org/fr/fiscalite/beps/empecher-les-mesures-visant-a-eviter-artificiellement-le-statut-d-etablissement-stable-action-7-rapport-final-2015-9789264255227-fr.htm
http://www.oecd.org/fr/ctp/beps/signature-d-une-convention-multilaterale-sur-le-beps-marque-une-etape-decisive-pour-combler-les-failles-dans-les-conventions-fiscales.htm
maxsuur
2017-07-13 05:49
The English Language isn't going away anytime soon
etperth
2017-07-13 08:16
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jsimps28
2017-07-13 10:09
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stoplight
2017-07-13 11:56
If ever there will be a shift in language?it?ll be Chinese?by sheer number?..ughh?hahah? :joy:
roman
2017-07-19 11:44
> 101 countries have signed on to the agreement. Canada has so far worked out information-sharing details with 42 countries.
:scream:
roman
2017-07-19 11:45
> One country refusing to participate, however, is the United States
Wonder what their deal is ...
roman
2017-07-19 11:48
Now we know which countries are in a financial crunch ;)
agalt
2017-07-19 17:34
the us is one of the best havens. put your stuff in a trust and don't worry about it. Same thing with other countries that allow companies to be owned by trusts. These laws go after the "little people" They realize many of us will find ways around it. @globalconsulteurope posted about the prepaid master cards awhile back. that is another option.
roman
2017-07-19 19:07
@agalt What?s the story with pre-paid master?
agalt
2017-07-19 19:07
ask @globalconsulteurope His law firm provides this
agalt
2017-07-19 19:07
he posted the info and prices awhile back
agalt
2017-07-19 19:08
Im buying one for my own reasons
agalt
2017-07-19 19:09
its a nice place to stash some, "hop on a plane" money + rent and expenses for some time out of your name in case life kicks you in the balls
agalt
2017-07-19 19:14
for day to day spending, I like my us llc owned by a trust. Keeping everything out of your name keeps life simple
archivebot
2017-07-20 07:22
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roman
2017-07-20 13:57
@agalt I don?t understand why is this a big deal? I mean, in Canada, you can get top up credit cards at a gas station? They don?t even need to be registered or anything like that.
roman
2017-07-20 13:57
Another alternative is to get a bitcoin credit card. I have one and I didn?t even have to use my name to get it. I literally got it for ?Joe Doe? name :smile:
roman
2017-07-20 13:57
But the limit is only 300 and to get more I?d have to verify. So not really useful for any major application.
yuli
2017-07-21 02:19
I have a tax question I am unsure: If I become a resident alien in the USA for a temporary period, from 1-2 years, and afterwards I decide to leave and not be a resident, would I still be taxed on my worldwide income?
I know a citizen is, but I am a bit confused on the status of resident alien. Thanks.
agalt
2017-07-21 06:59
@roman you answered your own question.
agalt
2017-07-21 07:00
The limit is what makes the Bulgarian card different.
pragmatic
2017-07-21 07:02
@yuli no
yuli
2017-07-21 20:12
So only citizens basically do that, taxed worldwide while not living in the states?
yuli
2017-07-21 20:13
Just slightly off point: But do you know any tax lawyer I can advice regarding this matter? Related subject for me would be to know how my current companies would be affected if I live 2 years in the states and live.
I have 2 offshore companies, and right now without being a resident, that is not an issue anywhere.
tkrunning
2017-07-21 22:12
Green Card holders might also be taxed on WW income, but as a temp resident alien that?s not the case
tkrunning
2017-07-21 22:15
I only know him by reputation but Phil Hodgen seems like he knows what he?s doing: https://hodgen.com/
yuli
2017-07-23 01:13
Thanks for the referral @tkrunning !
ivo
2017-07-24 08:46
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mysteir
2017-07-25 06:44
Does anyone have a recommendation for a Thailand Tax Attorney (preferably in Chiang Mai) that is used to dealing with expats with foreign sources of income? I'm looking for a legal memo outlining my current Tax situation here in Thailand & need a tax-friendly attorney that knows all the details on Int income remittance to Thailand inside out.
yannerbp
2017-07-25 22:46
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pascal
2017-07-27 07:23
Very important book for us : https://www.amazon.fr/Road-Ruin-Global-Elites-Financial/dp/1591848083 Extract ( in french ) : http://la-chronique-agora.com/piege-impot-mondiale/
alex1
2017-07-27 11:06
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alex1
2017-07-27 11:12
Have the following situation, Im holding some money in cryptos, Im german citizen currently living in Thailand and also spend more then 180 days here. I would now like to get some of those cryptos into fiat, but Im not sure how to go about this. I already have a singapore personal banking account and a hong kong limited and wanted to set up a business account in singapore with that as well, but now found out they signed this new agreement and thus this doesnt seem like a very good idea anymore.
6:11
I never paid any taxes in my life really, i never had a real job either.
sdfk787
2017-07-27 11:45
open the bank accnt in HK?
alex1
2017-07-27 11:47
well the signed the agrement too afaik
agalt
2017-07-27 12:21
(noticed you are in thiland before I wrote this) @alex1 There is a place in slovenia that will give you cash for bitcoins. Last time I was there the guys I meet for coffee were talking about it. From there I would not advise evasion, but I will tell you that I have seen people in Georgian banks walk in with bags of cash and men in suits beside them. They are happy to take 200k usd at a time. I would call the bank first. They are also not CRS compliant and wouldnt go telling german authorities, HOWEVER i do not advise tax evasion
agalt
2017-07-27 12:24
Montenegro is also not CRS complaint (currently)
alex1
2017-07-27 12:37
Well they also signed that agrement. Getting bitcoins into fiat is not a big deal, i think getting the money into a singapore bank isnt either, Im just scared that when 2018 that agrement comes into play they going to report my accounts and i get asked a lot of questions.
alex1
2017-07-27 12:37
oh i thought slovenia, i will look into georgia then maybe :slightly_smiling_face:
agalt
2017-07-27 12:38
Tbilisi is a nice place. There are some of us here from FS
agalt
2017-07-27 12:39
Georgia is stil a little bit wild. It is not a good fit for everyone, but it is a great fit for residency and making returns on investments.
agalt
2017-07-27 12:44
Georgia is not on here
alex1
2017-07-27 12:49
can i open a corporate account with my hong kong limited there?
agalt
2017-07-27 12:49
yes
agalt
2017-07-27 12:49
and offshore companys like Nevis, Belieze, Sechelles etc
alex1
2017-07-27 12:50
would u then recommend chosing that over singapore given my circumstances?
alex1
2017-07-27 12:51
they wont ask many questions if i send money there from bitcoin exchanges?
agalt
2017-07-27 12:51
i dont know what your circumstances are exactly. Singapore might be a better option
agalt
2017-07-27 12:52
see my pm. Lets discuss
stoplight
2017-07-27 15:09
Woah..and where did all that Bitcoin go??
agalt
2017-07-27 15:16
looks like the US had their hands up the rear end of the Greek Govt. Crappy situation.
fish
2017-07-27 15:20
He should settle for rape accusations
agalt
2017-07-27 15:22
of all places to chill out on the beach after being sucessful... why did he pick greece. Turkey is close enough and more off the Radar
globalconsulteurope
2017-07-27 21:08
Isn't it strange that russian citizens are mostly engaged with FX and Bitcoin trading?
pragmatic
2017-07-28 10:12
Speaking on money laundering and Russia... I thought this was super interesting
bitesak
2017-07-28 17:39
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mikeseo
2017-07-28 19:14
@agalt with your US LLC that's owned by a trust, did you open a US bank account for the LLC?
agalt
2017-07-28 19:15
I use a US Debit card every day owned by the trust and so do many others on this slack channel
agalt
2017-07-28 19:15
The lawyer did everything for me. The people at the bank don't even know what my face looks like
agalt
2017-07-28 19:16
and if i get mugged or something stupid happens, I have a backup card
mikeseo
2017-07-28 19:16
So you didn't show the bank any ID or nothing? The lawyer has some friendly bank that sets it up just on the trust?
agalt
2017-07-28 19:16
the lawyers name is on everything
agalt
2017-07-28 19:17
but he signs a resignation of the Trust
mikeseo
2017-07-28 19:17
can you send/receive wires with it?
agalt
2017-07-28 19:17
YES. I use transferwise frequently to pay another lawyer
agalt
2017-07-28 19:18
and i walk up to the atm daily to get cash to buy: food, beer, ciggarettes/ whatever
mikeseo
2017-07-28 19:18
wow
agalt
2017-07-28 19:18
or use it at resturants to buy dinner or whatever
mikeseo
2017-07-28 19:18
did the lawyer want proof of your identity?
agalt
2017-07-28 19:19
its all in his name, there are some documents in your name, but that is attorney/ client privliged information
mikeseo
2017-07-28 19:20
nice
agalt
2017-07-28 19:20
It makes my life very simple as well as others on here
agalt
2017-07-28 19:20
then you can get another card under your alter ego if you "loose everything" that Simon wrote about
mikeseo
2017-07-28 19:20
any downsides to it?
agalt
2017-07-28 19:21
sometimes you feel like an asshole for pulling out a corprate debit card to buy a cola and a pack of camel naturals in slovenia with your rolling papers
mikeseo
2017-07-28 19:21
:slightly_smiling_face:
agalt
2017-07-28 19:22
if you want to keep books for your company there is software online that pulls your bank data from your bank website online to keep traick of your monthly expenses
mikeseo
2017-07-28 19:23
my buddy is a non-resident non-citizen and wants a US LLC and bank account without having to travel to the US
agalt
2017-07-28 19:23
then you charge your Georgian LLC for "fees" to take profits out of your company to eliminate/ minimize your taxes here because we us the Estonian style tax system
agalt
2017-07-28 19:23
thats fine. It can all be done online.
agalt
2017-07-28 19:23
ill send you a pm
svending
2017-07-31 14:40
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mattbellme
2017-08-01 07:49
@agalt do you end up paying alot of fees transferring money between international banks?
agalt
2017-08-01 11:10
I mainly use 2-3 accounts and transfer chunks of money at a time or just pay the atm fees to withdraw the money in chunks, or transferwise
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freediddly
2017-09-06 12:43
Hi guys, new here. It's a little hard to browse these channels. Here's my situation : building a subscription software internet biz, I'm located in Australia. I require a setup where *(1)* owner's privacy is respected *(2)* I can have a bank account in the name of the biz *(3)* I can use all standard payment processors *(4)* low compliance burden *(5)* I can open a crypto currency account and trade in the name of the biz *(6)* low company tax. Any thoughts? I'm willing to fly to wherever necessary to open an account. Cheers
johncitizen
2017-09-09 16:40
Freediddly, welcome. I?m usually in Aus (currently away again).
sylvain156
2017-09-12 03:22
Hi guys! I created a Hong Kong company 18 months ago with a French intermediate very famous and trusted. Today he asks me to sign the 2017 tax return, writing my company has no business commences since 18 months. He says no one will ask me accounting or auditing. My real assets were 250k usd since 18 months.
Do some people know this kind of practice?!
I didn't do real accounting because he always told me HK will not ask my accounting I don't need to do it.
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2017-09-12 23:01
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2017-09-18 10:36
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sylvain156
2017-09-23 09:46
Hi guys, do some people create a free zone company and have the tax residency in dubai etc?
danz
2017-09-23 09:55
To get the tax residency there, you have to stay there 180 days in a year.
sylvain156
2017-09-23 12:37
No you have to don't leave the country during more than 180 days, which mean you have to spend one night every 179 days
sylvain156
2017-09-23 12:37
I'm 99% sure
sylvain156
2017-09-23 13:17
180 consecutive days I meant
maxsuur
2017-09-23 14:33
Why would you want to create a company there? @sylvain156
sylvain156
2017-09-23 14:35
Currently I have my company in hk and it's very cheap (1k /year and no tax ) but I don't have the tax residency so I'm not 100% clean
sylvain156
2017-09-23 14:36
In dubai it's more expensive (10k/year) but you have the tax residency so you are 100% clean
maxsuur
2017-09-23 16:06
What 's your home country? @sylvain156
maxsuur
2017-09-23 16:06
Why don't you move to a territoral taxation country?
sylvain156
2017-09-23 16:10
France @maxsuur
sylvain156
2017-09-23 16:11
Not sure to understand what you mean by a territorial taxation country?
skat
2017-09-23 20:49
@sylvain156 i?ve been consulting US startups and was planning to open a company in Dubai (had some connections there), but after talking with clients ? they all told me that they don?t want to pay to Dubai company that would look shady for their investors.
sylvain156
2017-09-24 04:22
Thanks @skat oh OK, and your clients would be OK for Hong Kong?
danz
2017-09-24 09:20
I am quite sure you have to be there 180 days in a year.
danz
2017-09-24 09:23
And in my opinion it?s better than most other options, as you don?t even have to do any bookkeeping. So there?s not much cost beside to starting a company there. But it?s not a solution for everyone and everything, as I think you can?t hire staff and a few other things. But for most ?digital nomads? it?s a good and easy option.
danz
2017-09-24 09:25
In opposite of what Skat experienced, I found many people looked at it a positive way. But it depends on what type of clients you have I guess.
danz
2017-09-24 09:26
@sylvain156, he means a country that doesn?t tax foreign income. That?s where you want to set up your residency.
sylvain156
2017-09-24 09:37
Oh @danz I understand our misunderstood, I'm talking about a free zone company, not an offshore company. With a freezone you can hire staff, have the visa and tax residency, you need to rent a desk etc. Price is around 10k usd /year. Price for offshore company is probably around 2 or 4k usd /year (not sure).
danz
2017-09-24 09:37
Ah, I see:)
sylvain156
2017-09-24 09:39
For the clients I asked to my main client and he was OK for dubai. Currently I'm in hk and only 1 customer didn't want my hk invoice. I have around 100 clients. So 1% it's OK.
danz
2017-09-24 09:42
The only thing I experienced with a company in the UAE, is that a lot of companies are not used to it, so they had to add the country to their list to pay customers. But it never was any problem, just a delay of a few days.
sylvain156
2017-09-24 10:22
Ok thanks!
skat
2017-09-24 17:08
@sylvain156 yeap, Hong Kong was totally okey with them.
sylvain156
2017-09-24 17:11
Erf ok
bns200
2017-09-25 00:42
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nort17
2017-09-25 08:28
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ianpaul
2017-09-25 09:12
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sylvain156
2017-09-26 15:55
Hi, we talked about dubai before, I just realised dubai can provide a RESIDENCY VISA "easily", 10k usd /year and you have to not leave the country more than 180 consecutive days, but it's not a TAX RESIDENCY, it's only the visa. Not so interesting so...
andra_korb
2017-09-26 16:43
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ivopalazzi
2017-09-27 18:10
Hello, I have a friend which is tax resident in Spain (Yes, I am writing on behalf of him, I am resident in Malta :slightly_smiling_face: ) and he has a bank account in India. He is planning to go there in one month to open accounts for his family and distributed the money he has, so that each account has less than 50.000 (above this amount you are required to report to the Tax Authorities, otherwise you will suffer hefty sanctions. You will pay these hefty sanctions even if you do report it, as he had until 2012 to do so.) So 50.000 is in the safe margin and there are no reporting requirements. I have told him however that its a bit late, that India is already exchanging information or will do so shortly with Spain
ivopalazzi
2017-09-27 18:11
Am I correct? I am trying to find out the countries with which India has signed the AEOI and the dates it will enter into play, but haven´t found no info far
ivopalazzi
2017-09-27 18:12
Any information you guys can provide is highly appreciated
maxsuur
2017-09-27 18:32
50k eur you mean @ivopalazzi ?
ivopalazzi
2017-09-27 18:32
Yep
rtiagm
2017-09-27 18:45
India committed to start reporting in 2017
rtiagm
2017-09-27 18:46
Is AEOI different from CRS?
clr
2017-09-27 23:29
@ivopalazzi AFAIK, the 50k threshold is for all foreign accounts combined, not for each account.
clr
2017-09-27 23:30
Look up ?Modelo 720? for more info
clr
2017-09-27 23:37
Reading again I see he wants to distribute into several accounts under the names of his family.
clr
2017-09-27 23:38
Given that India starts reporting this year I assume they will report the accounts and balances at 31 Dec 2016.
haralabob2
2017-09-28 08:17
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ivopalazzi
2017-09-28 09:06
Yes...the problem clr, is that the Modelo 720 is a suicide
clr
2017-09-28 10:50
Yes, true, from what I hear, they are going after people that reported foreign assets on the Modelo 720 for petty mistakes. But having over 50k in foreign accounts and not declaring them seems very risky with CRS.
ivopalazzi
2017-09-28 11:46
Yes, true clr
ivopalazzi
2017-09-28 11:46
I actually want to know if opening several accounts under several family members will be a good strategy now, or if its too late...
globalconsulteurope
2017-09-29 07:10
Tax authorities will easily reveal family members as linked persons. Why not go through a family foundation or trust?
ivopalazzi
2017-09-29 15:43
Some of those fmembers are not resident of the jurisdiction
ivopalazzi
2017-09-29 15:44
Transfering balances, or setting up trusts is too late right? They will share the balance of 2016 right?
pragmatic
2017-10-02 17:07
If I was work for a company based in the USA, but only spent 3-4 months of my year actually present in the US (in other words, not a US person, tax resident elsewhere), would the company be required to pay withholding tax on my salary pro-rataed to the 3 or 4 months that I spent there that year?
mikeseo
2017-10-03 05:08
I'm not sure about withholding tax but I think you are supposed to pay US tax on the 3-4 months inside the US if you're working during that time
mikeseo
2017-10-03 05:09
also if you spend over something like 4 months a year for a few consecutive years you're considered a substantial presence resident. They have a formula for calculating it.
patjk
2017-10-04 18:25
Hello, I'm looking for some advice. I'm a US citizen. I have various e-commerce websites that sell physical and digital products throughout the world - all business is on the internet.
I have a bank and company setup in Singapore (setup Nov. 1, 2016), but am yet to use it due to the high processing fees and currency conversion costs (Stripe charges 2% conversion fee, only pays out in SGD, and 3.9%+). That is at least 1-3% more than if I have payments go to a US account, which is a hefty amount. I know for the first 2 years the first $100k isn't taxed, so want to use that somehow prior to Nov. this year.
I have an LLC setup in the US in Colorado, which is currently where the money goes. Ideally I want to get the LLC owned by the Singapore company which I've been told is the way forward, but unsure how to go about doing it (though I've been told if I don't reside in the US, it has the same affect as being owned by a foreign entity - is this correct?).
Payments into the USA LLC primarily come from 2 Paypal accounts and 2 Stripe accounts. For 1 Paypal account, 95%+ of payments are international so fees are around 5.1% each month [crazy high] (I think it's 4.4% + $0.30 which is approx. 5.3% on a $35 sale).
I don't reside in the US, but most years spend maybe 1-2 months in the US traveling and visiting. Otherwise I'm on the road though have spent a fair bit of time in Thailand. Currently I'm in South America.
So, my questions to you are:
1) Considering my current setup, what do you recommend I do to improve my setup? If I should make the LLC owned by the Singapore company, how do I do it?
2) When I need to file taxes, what needs to be filed and how do I file it?
3) What exactly is recommended for accounting? At the moment, accounting is a mess. I have all revenue going into the LLC bank in the US, and I have 2 credit cards which most expenses go on. I want to get an automated system to handle accounting and clean up the current mess that is setup. Any recommendations are appreciated for handling all the numbers.
4) If I want to invest 80% all profits of my businesses into index funds, what's the best strategy to do this?
5) Any advice on reducing fees on the 5.3% Paypal account above? It really adds up.
6) Unrelated but curious: I've made some profit buying crypto currency. What's the best way to sell some of it, and invest it into index funds without paying much tax, or avoiding it? I know it's the wild west, but curious of your thoughts.
Thanks.
mikeseo
2017-10-05 03:57
1) that's how my tax lawyer did it, my foreign company owns my US LLC, the US LLC has a bank and credit card setup inside the US. He wrote some document that made the foreign company own the LLC. I would ask him to check out your setup and have him write the document. http://ustax.bz The purpose is to get around self employment tax.
2) Stewart at http://ustax.bz does all my filing, there's a bunch of different papers required and big penalties if you mess it up. There's a number of new US tax accountants specializing in digital nomads.
3) dunno
4) I don't think you can invest undistributed profits without running into tax consequences.. Probably pay yourself the full 100k and than just do a normal taxable account at vanguard? Dunno really. I wouldn't invest in index funds until the market drops because it seems like everyone's doing index funds and also valuations are really high.
5) dunno
6) illegal tax evasion: sell the crypto for cash on http://localbitcoins.com or buy gold with the bitcoins in singapore from http://bullionstar.com and don't declare it to the IRS.
trevorjames
2017-10-05 04:41
Hey guys! Has anyone completed the Amazon tax interview as a hong kong corporation? I'm having difficulty filing it as a Business and non-us person. It keeps telling me that 30% is going to be deducted. It's also not giving me an option to choose active NFFE, which is normally found in part 4 of the w8-ben-e form. Has anyone gone through this before? Thanks!!
patjk
2017-10-05 16:17
@mikeseo cheers for the info, will check it out, much appreciated. if anyone else has feedback it is much appreciated.
silviu_ruj
2017-10-06 17:27
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rwinorganization
2017-10-08 11:11
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rwinorganization
2017-10-08 11:16
Hello, I have a new LLC and I want to create for the brand a website with a Romanian Company (SRL). What's the legal procedure? I need to do a contract with them and they need to create an invoice for my LLC or it's ok on my personal details too? From now I have money only from my savings, I don't started to sell so I doesn't have any money on my company. I will have to transfer that amount which I need to pay for the website and declare something?
aka
2017-10-09 14:05
are you trying to save tax here?
aka
2017-10-09 14:06
you want to invoice your llc from a romanian company? to transfer some funds or something, right?
rwinorganization
2017-10-09 15:42
I want to invoice my llc from my personal savings not from another company. To transfer some funds, right
bigworld
2017-10-09 17:15
And why you don't just create new shares and buy them?
replay
2017-10-10 01:14
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replay
2017-10-10 01:15
hi:) i have some questions regarding taxation in paraguay. does somebody here have the contact of a paraguayan tax lawyer who speaks english? I'll happily pay for advice if it is a professional service
globalconsulteurope
2017-10-10 09:06
@rwinorganization where is your LLC incorporated and what laws apply to its governance? Which company is the assignor and which is executor of the mentioned services?
rwinorganization
2017-10-10 10:18
@globalconsulteurope My LLC in incorported in Wyoming
rwinorganization
2017-10-10 10:18
@globalconsulteurope I have the money personaly, and I want to loan my LLC with the amount I need. The execturo is my LLC
mikeseo
2017-10-10 11:04
@rwinorganization are you a US resident/citizen? LLC is usually a passthrough entity, not separately taxed
pascal
2017-10-15 15:32
Costa Rica : no CFC rules ... at present :
http://taxinsights.ey.com/archive/archive-news/costa-rica--income-tax-reform---bill-submitted-to-legislative-assembly.aspx
usman
2017-10-15 16:22
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alex.bosyj
2017-10-17 15:23
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usman
2017-10-18 12:04
Hi - does anyone have any recommendations in terms of lawyers or people you could recommend setting up an tax structure ? Thank you!
ggiampieri
2017-10-19 03:06
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jor.acker
2017-10-22 16:13
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ivan
2017-10-22 18:34
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ivan
2017-10-22 19:23
Hi everyone, I'm from Argentina, anyone familiarized with the local taxation policies + IBC? Thanks in advance.
ivan
2017-10-22 19:26
Reading the website I found the section about Argentina. There was no mention of a tax program called Monotributo, you guys might want to take a look at that as taxing is very low if you are eligible for it. I assume residency should be enough for registering in the program.
ivan
2017-10-22 19:26
Otherwise it's true the country is very expensive tax-wise.
ivan
2017-10-22 19:43
The tax lawyer I've been consulting recommened me a Belize IBC + US LLC as a struture, anyone has any experience on that?
mikeseo
2017-10-23 00:19
why did he recommend a IBC? Why not just get a US LLC and US banking?
ivan
2017-10-23 09:07
@mikeseo I was told that the pass-through nature of LLC would affect me tax-wise in Argentina. In conclusion I would have to pay income taxes for the whole percentage of my partnership, on the other hand with an IBC I'd have to pay income taxes of only the money I withdraw from the company. Theoretically this second option would allow me to reinvest money and not be taxed for it. Furthermore having 2 layers in the structure is supposed to add legal protection and the whole capital would be saved in the LLC making me exempt of tax in Argentina called "bienes personales" (personal goods) which taxes you based on the amount of money you have. As the LLC has the money and it's not directly yours looks like Argentina doesn't tax you for it.
Seems like this specific structure is used a lot in Argentina and Uruguay but the issue is that it's very probable that next year the government will declare that all passive off-shore corporation are to be considered pass-through if they're passive companies (holding company qualifies) and then all the above benefits would be lost.
Another cons seems to be that an US based LLC would complicate things if I want to sell to us based clients (which I do).
mikeseo
2017-10-23 23:19
interesting. I think selling products/services to US clients from a US LLC wouldn't make you liable fro US taxes, as long as you don't have a office in the US and don't have US employees.
ivan
2017-10-23 23:23
@mikeseo I've read both opinions, that one and the other version. The attorney I spoke too recommended not to sell in the US as it could become more a more complex tax situation. Thanks!
bountybairn
2017-10-26 20:20
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rtiagm
2017-10-28 16:17
Can anyone recommend a US tax advisor familiar with C corporation taxation?
ivan
2017-10-28 19:25
@rtiagm someone recommended me http://ustax.bz in here. Haven't contacted him myself. I've been consulting a tax attorney in Argentina.
petrsuska
2017-10-28 22:39
Hey guys. Due to many reasons I want to gradually move my eCommerce business from EU to Singapore.
My question is - Let?s say my Singapore company buy physical products in EU and use 3PL in EU to supply EU customers - do I run into any conflict with EU VAT system if I don?t exceed the VAT thresholds in individual EU countries?
+ Do you know a good tax lawyer who understand all this international/EU shit?
ggiampieri
2017-10-29 13:46
That's complex man, if you sell tangible goods for sure you need 2 companies one inside and the offshore one you use as payment processing, because buying goods from Singapore means you get them out of shenghen. You can keep a local company you use to buy from supplier and then to ship to customers, this company invoices the Singapore one for the service offered. But please talk to some good accountant because Eu Vat and intrastat is not simple!
ggiampieri
2017-10-29 13:47
Maybe an estonjan company can do the job more efficently and you can pay yourself a salaxy taxless if you live in a country with no personal tax from foreign sourced founds
me1
2017-10-30 07:31
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jeanpaul
2017-10-31 06:24
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ivan
2017-11-03 09:32
Guys,
I received this: http://www.bank-in-america.com/index.php/faqs/disregarded-entity-vs-taxable-association-what-is-the-best-way-to-structure-your-llc/ and http://www.bank-in-america.com/index.php/digital-nomad-package/.
How does this compare to this other article? https://www.freedomsurfer.com/llp-llc-payment-processing/
*TL;DR*
Basically Simon states that an LLC + the proper residence or Holding Company should be enough to use a service like Stripe to process credit card. But these other posts picture a more complicated situation where one would need to declare the LLC as taxable and use it as a payment processor agency who keeps a commission for processing payments to the other company and pays taxes for that. All related to the W-9 Form.
Any thoughts?
ggiampieri
2017-11-03 11:13
Actually that is the same as HK subsidiary + IBC holding. That's what I've been told. So it should be like that. The theory is a company cannot work for free
ivan
2017-11-03 11:14
what's the same @ggiampieri? then that Simon post is wrong? you do have to pay taxes for selling using Stripe if you have an LLC?
simon
2017-11-03 11:19
@ivan when you sign up for Stripe, you do the tax interview as an individual (W-8BEN). An LLC is a transparent entity, it does not exist for tax purposes.
simon
2017-11-03 11:19
So no, no US taxes to pay.
ivan
2017-11-03 11:22
Thanks @simon! In my case the LLC would be owned by an IBC, the same applies? The IBC would have an interview for the W-8BEN?
simon
2017-11-03 11:23
Yes, you would use the IBC's details for the interview.
ivan
2017-11-03 11:27
@simon one last question I heard many mixed opinions about:
Would the LLC + IBC structure be taxable in the US if it sells web development services to US based clients? In the case it doesn't have offices nor employees in the US.
simon
2017-11-03 11:29
No US taxes are owed as long as the work is performed from outside the US.
ivan
2017-11-03 11:29
thanks a lot @simon!
ggiampieri
2017-11-03 13:40
Great, thanks!!
ivan
2017-11-03 15:10
I just got out of the phone with an attorney specialized in Argentina. There's been huge reforms announced this week. Looks like the BTC is going to be regulated here and IBC and other similar corporation will be considered pass-through for tax purposes as well.
ivan
2017-11-03 15:11
So basically one will have to pay income tax on all the company's earnings according to the shares, even when not withdrawing from the company. I'm trying to solve that one, will keep you posted if I find a solution to the Argentina's case.
ivan
2017-11-03 15:12
What's the situation regarding the IBC in other countries? are they starting to be considered pass-through as well?
bigworld
2017-11-03 17:47
In Spain they may consider that it is an on-shore company and demand it to pay corporate taxes the same as any other local company under Spain corporate law.
adiviz1
2017-11-04 12:45
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ivan
2017-11-06 18:48
Guys, have any of you heard of a case where an LLC owned by a holding company is declared to be a branch of the first company and therefore taxed as a corporation instead of a pass-through entity?
ivan
2017-11-06 18:48
I've read someone saying that happens from time to time.
ivan
2017-11-06 18:48
I think it was an answer in Quora from a US agent. but can't remember the exact source.
bigworld
2017-11-06 21:23
I think you need to ensure that you have a written operating agreement in case that someone questions that the LLC is an independent company of the holding and not an extension of the later. But I think the risk is on litigation, not in taxation.
ivan
2017-11-06 22:12
@bigworld you mean it's more of a liability in case someone sues the company rather than having a tax issue with the US?
ivan
2017-11-06 22:13
Thanks!
alexanderhay
2017-11-07 09:54
@ivan Are you referring to tax treatment of a US LLC in the USA or elsewhere? As for taxation it depends upon whether or not there is a "nexus" of contacts creating a "corporate residency" in the USA. If so then the parent company will be considered having a corporate residency in the USA and will then owe money in taxes - a lot of it. Another problem is "effectively connected US source income". If you have that you are going to have to pay US taxes, and a pass through entity might very well be the WORST way to do it -- the worst of all possibilities in fact. As for limited liability protection that depends mostly upon the state law where you set up the LLC. Delaware is the best but comes with some problems due to the "suspect" nature of Delaware as a jurisdiction. Nevada and Wyoming lack the depth of corporate law, and are even worse in regards to "suspect" status. I like Texas. A Texas LLC is treated as a partnership by Texas Courts and in both common law and statutory law that means it is very difficult to pierce the corporate veil, and more importantly it is very difficult to obtain anything other than an assignment order as a creditor.
ivan
2017-11-07 11:13
Thanks @alexanderhay. So basically if the LLC is not really taxable in the US because it doesn't have neither employees nor office it shouldn't be at risk of it being considered a branch of the holding company? Did i understood correctly?
me1
2017-11-08 05:54
Hey guys, I'm pretty new to this stuff. I'm a Canadian and Bulgarian citizen and I'm trying to figure out what I can do to minimize or avoid tax while working directly or indirectly for a US company. Based on my reading so far, there are no loopholes to be found as long as I live in Canada, right? I would have to prove to Canada that my "tax home" is outside of Canada. For example, in Bulgaria as a first step, right? If I wanted to try to set up a zero tax nomad thing, then would I be able to visit Canada at all?
ivan
2017-11-08 09:47
@me1 I might not be right at all but based on info I have from other countries Canada would have to approve your tax residence change based on proof and specific conditions. Normally you have to live outside the country for most of the year and have a residence (not just citizenship) in another country to make it more provable. I don't think returning to Canada for a bit every year or even staying for a couple of months would change the tax residence status but you have to check Canada exact policy about that.
me1
2017-11-08 17:29
Yeah that's my understanding too. My parents have an apartment in Bulgaria, so I'm thinking that living there for a year would be the best way to set up a tax free arrangement. Now I just need to figure out what lawyer or accountant I need to talk to to figure out the details... How do you guys find reasonably priced but sufficiently competent lawyers or accountants and which one of the two should I be looking for?
ivan
2017-11-08 18:09
Does Bulgaria have a territorial tax policy? Otherwise you'd have to pay income taxes in your new tax residence country @me1.
ivan
2017-11-08 18:14
They're much lower, tho
me1
2017-11-08 18:24
They do
ivan
2017-11-08 18:45
I'd consult a local accountant or tax attorney then after you get your residence in Bulgaria. Have in mind that's possible Bulgaria demands you stay for a minimum amount of time each year in order to keep the residence and tax residence.
roman
2017-11-09 02:32
@me1 at a minimum you can do some tax planning. Eg incorporate and deal with your clients as corporation. Corp tax is 15% in Ontario. Put as much as expenses as you legally can thru your Corp. take out minimum you need to live as dividends and salary. Income split with your partner if you have one. The rest keep inside the company and invest.
roman
2017-11-09 02:33
Otherwise you need to cut ties with Canada. Become non resident for tax purposes. You?d need to prove to CRA that you are non resident. Sell your assets and not live in Canada.
roman
2017-11-09 02:34
You?d be able to visit Canada for half a year every year as far as I understand.
roman
2017-11-09 02:34
But you can?t have ties. There is no concrete definition of what that is. It is on case by case basis with CRA.
me1
2017-11-09 02:37
Yeah. If I don't do any banking in Canada that's probably good enough, but we'll see... I do wonder if my business can hire Canadians if I wanted to expand... Probably... Hmm..
me1
2017-11-09 02:38
That's a good idea to get paid through a corporation regardless, but won't I get double taxed? Once for the 15% and once to pay myself?
roman
2017-11-09 03:03
Yes, but only on what you withdraw. And dividends get taxed differently. Essentially you can have a very small personal tax if you withdraw under 40k/y.
roman
2017-11-09 03:03
The key is write off as much as possible. Internet, phone, home office.
me1
2017-11-09 03:03
Ah, interesting... So my income bracket would be tiny
roman
2017-11-09 03:03
Yes
roman
2017-11-09 03:04
And dividends aren?t salary.
me1
2017-11-09 03:04
I might not pay any taxes if I withdraw small enough amounts...
roman
2017-11-09 03:04
Yes
roman
2017-11-09 03:04
I highly suggest you get a proper accountant.
me1
2017-11-09 03:04
It's hard to plan correctly because %15 is not negligible, but I'll try to do the math
me1
2017-11-09 03:04
Yeah
roman
2017-11-09 03:05
I use LiveCa guys. They charge about 3k/y including personal taxes and corporate filing at the end of fiscal year. They are great and always answer all questions. All remote team too so they understand that angle really well.
roman
2017-11-09 03:06
15% is def not negligible. And it?s also up to 500,000. After that there?s a different tax bracket.
me1
2017-11-09 03:06
Oh very cool. I'll check them out.
roman
2017-11-09 03:07
But it?s still significant savings if you making enough. Could be 10s of thousands per year.
me1
2017-11-09 03:07
At what income level do these hacks start to pay off usually?
roman
2017-11-09 03:07
I was told after 40k
me1
2017-11-09 03:07
Wow so low. I'm guessing that doesn't take into account the accountant fees?
roman
2017-11-09 03:07
With fees.
me1
2017-11-09 03:08
Really... Ok, thanks for the advice!
roman
2017-11-09 03:08
It depends on nature of your biz and how much you need to live on.
roman
2017-11-09 03:09
If you live in Toronto or Vancouver and need to draw a lot to support your lifestyle then it?s different numbers.
roman
2017-11-09 03:09
I?m in tech so I write off a lot of tech stuff like phone, computer, internet, home office.
roman
2017-11-09 03:09
Some travel can be considered biz related.
roman
2017-11-09 03:10
I only need money for food and mortgage.
roman
2017-11-09 03:10
And I live in Montreal so my mortgage is smaller than if someone lived in Toronto or Vancouver.
me1
2017-11-09 03:10
Yeah I'll have a similar situation. Most of my travel will be business, most of my expenses will be business... I wonder how much of rent I can write off, and even then, I might live for free for a while anyway
roman
2017-11-09 03:10
You write off the area you work in.
roman
2017-11-09 03:11
If you have a dedicated room you can write off entire room by soft
roman
2017-11-09 03:11
Sqft
me1
2017-11-09 03:11
As a percent? I'm guessing this is a standard thing. That sounds awesome.
roman
2017-11-09 03:12
There are other hacks you can do too that are grey area. Eg buy visa gift cards and write them off as gifts to clients.
roman
2017-11-09 03:12
But spend them on groceries;)
roman
2017-11-09 03:12
But it has to be reasonable
roman
2017-11-09 03:12
Can?t get too greedy.
roman
2017-11-09 03:12
Buy a bottle of nice wine? Maybe it was for a client ;)
me1
2017-11-09 03:12
Hahaha
roman
2017-11-09 03:13
Have a dinner at a fancy restaurant? Was it maybe a shareholder meeting with your wife? If she?s a shareholder
me1
2017-11-09 03:13
Hahaha I like it
roman
2017-11-09 03:14
But it has to be within reason. If you write off every dinner at Tim Hortons then it?ll be suspicious.
roman
2017-11-09 03:14
You have to be able to proof if they investigate.
me1
2017-11-09 03:14
BTW I'll be in Ottawa in February. I'd love to meet up with some people from this community and chat about financial hacks and entrepreneurship. You are pretty close by
roman
2017-11-09 03:14
They compare your deductions against other similar businesses apparently.
me1
2017-11-09 03:14
Actually I'll be in Ottawa in December for a week too
roman
2017-11-09 03:15
I?m going to Vancouver second half of December to early Jan. In feb it?s Mexico time ))$
roman
2017-11-09 03:15
But if you are in Ottawa early dec then I can come by.
roman
2017-11-09 03:16
Or come by Montréal. It?s more fun than Ottawa anyways :$
me1
2017-11-09 03:16
Yeah DEC 3-9
roman
2017-11-09 03:16
My parents are in Ottawa. I?m from there too
roman
2017-11-09 03:16
But moved to mtl 3y ago.
roman
2017-11-09 03:16
Originally from Russia. So we are close by culture.
me1
2017-11-09 03:16
Oh that's so cool. Haha yeah Montreal is more fun ;)
roman
2017-11-09 03:16
You are from BG right?
me1
2017-11-09 03:16
Yep
alexanderhay
2017-11-09 08:17
Yes.
ivan
2017-11-09 09:10
Unless you really want to travel and go for more adventurous approach 15% Canada sounds like a great deal considering all Canada has to offer.
ivan
2017-11-09 09:12
Argentina taxes are way higher than that, and the country is unstable, hiring an employee here is suicidal and the infrastructure is really bad. For such low taxes I'd think twice about incorporation in my own country.
patjk
2017-11-09 18:44
For people you've setup a foreign entity to own a US entity, what was the process and cost? I'm looking to have my Singapore company own my US LLC. Thanks.
ivan
2017-11-09 19:09
both companies are already registered @patjk? I've gone through the same process lately, but didn't have any companies, I just registered them that way.
patjk
2017-11-09 20:32
@ivan yes, both are already registered and setup. who did you go through and what was the cost? I have a Pte Ltd in Singapore, and a US LLC. Are you from the US?
tatelev
2017-11-11 10:56
Hi, about this new regulation that started this year that foreign owned LLCs must now file Form 5472 for any ?reportable transactions? I read that the formation of the LLC is considered a reportable transaction. So does this mean that I have to file this Form 5472 to report the formation of the LLC, and exactly when?
tatelev
2017-11-11 10:57
Any foreigner that has already filed this? @simon maybe?
bigworld
2017-11-11 11:21
Have you look for exceptions? I found the following which I think 99% individuals here meet:
- The LLC does not have a permanent establishment in the US under an applicable income tax treaty and it filed Form 8833 (Treaty-Based Return Position Disclosure)
- Both the reporting entity and related party are not US persons, as defined in the Tax Code and the transactions will not generate any US-source income
https://www.world.tax/articles/form-5472-a-new-information-return-for-foreign-owned-us-llcs-and-other-businesses-what-you-need-to-know.php
tatelev
2017-11-11 14:31
so my first understanding of this is that I would be exempt because I am not a US person nor have a permanent establishment in the US, however I will have to read more about that condition of having filed Form 8833. That is the first time I?ve heard of this, so not sure yet if it is a condition easy to fulfill
tatelev
2017-11-11 14:32
@bigworld Any quick comment about this 8833? (thanks by the way)
ivan
2017-11-11 14:46
What sounds weird to me is the fact that most US LLC have virtual offices over there. Don't they count as "permanent establishments"?
tatelev
2017-11-11 14:49
they don?t
tatelev
2017-11-11 14:50
the existence of a virtual office or even a physical office does not constitute a permanent establishment unless it meets certain conditions
tatelev
2017-11-11 14:51
mainly either having a dependent agent/employee or carrying tasks essential to your business in it
ivan
2017-11-11 15:25
and doesn't virtual offices staff answering the phone or forwarding emails count as dependent agents? They have to be your company's employees?
tatelev
2017-11-11 15:33
dependent agent I think it means that they only work for you. If they work for you and other customers, they are independent agents
tatelev
2017-11-11 15:35
so anybody can tell me a little bit more about being exempt of form 5472 and dealing with form 8833 instead?
ivan
2017-11-11 15:40
Thanks @tatelev
bombine
2017-11-11 22:44
has joined #taxation-personal
patjk
2017-11-12 04:07
@brian the local director was appointed by the company I setup through. I can't vouch for them or otherwise but so far it's good
patjk
2017-11-12 04:08
Any Americans here have a foreign owned US LLC? Looking to chat a bit more with others who've done the process. Cheers!
mikeseo
2017-11-12 05:35
@patjk I have a US LLC and a foreign corp. I'm personally the sole member of the US LLC. My tax lawyer http://ustax.bz simply made a Contribution Agreement which says I contribute/transfer/assign/deliver the LLC to the foriegn corp in exchange for stock in the foreign corp. I have a bank account and credit card in the US using the US LLC and a Singapore bank account using the foreign corp.
mikeseo
2017-11-12 05:38
I already had the US LLC setup and running before starting the foreign corp. I dunno if he would do it differently if I hadn't had the US LLC already. Did you try to register a US LLC using the foriegn corp as the sole member / owner?
ivan
2017-11-12 11:34
I think he needs to do exactly what you did. He already owned both companies and want to transfer ownership.
tatelev
2017-11-13 11:36
@bigworld do you own a us LLC yourself?
roman
2017-11-13 23:37
FYI just received an official email from PayPal stating:
> We?re writing to notify you that we have received a Federal Court order requiring us to disclose information to the Canada Revenue Agency (CRA) about PayPal Business account holders who sent or received a payment between January 1, 2014, and November 10, 2017. To comply with the order, PayPal Canada will make a disclosure to the CRA within 45 days of the date of the order.
jd
2017-11-14 05:24
Does anyone have any contacts for Australian accountants that are good with offshore structures etc... and Aussie taxation?
johncitizen
2017-11-14 09:00
@jd keep me in the loop
jd
2017-11-14 09:36
@johncitizen Just saw this - sure thing, will let you know
jd
2017-11-15 00:28
@mikeseo How have http://ustax.bz been for offshore tax advice? I might give them a call on some questions around LLC foreign ownership
jd
2017-11-15 00:38
@stolzlos Did you find an answer to this? I am in a very similar boat. Was considering whether an offshore trust structure that does not distribute profits would do the trick.
stolzlos
2017-11-15 01:40
hi there. well, yes and no. From the feedback I got there has to be some kind of structure that indeed does shield you but unfortunately I do not know specifics. I would have to research the matter in detail and also get in contact with some professionals. That I did not do as of today.
stolzlos
2017-11-15 01:42
the fastest way I assume is to get out, settle in a territorial tax haven and create an LLC or LLP. I intend to do that and endure the tax burden for now.
jd
2017-11-15 01:45
On another note.. thought you may have come across this:
I have a business registered in St Vincent and the Grenadines. Do you think it's possible to have a foreign entity (US LLC) own this, or vice versa to access US banking facilities?
jd
2017-11-15 01:45
Thanks for your reply!
jd
2017-11-15 01:45
I'll let you know if I get anywhere with the trust research
onlinesale2003
2017-11-15 07:08
has joined #taxation-personal
mikeseo
2017-11-15 09:42
I like Stewart at http://ustax.bz, but only for US tax advice, he's not going to know specifics about other countries. I think he offers a service to setup a US LLC and bank account for foreigners.
pragmatic
2017-11-16 09:02
With reciprocal facta agreements, how does the US financial instituion even know what country to send info to? CRS requires you to keep your bank address up to date to your residence but the US does not.
tatelev
2017-11-20 09:26
@mikeseo thanks for the article. After reading it, I have started getting paranoid about my Wyoming US LLC :disappointed:
andrei_adam2001
2017-11-20 11:57
has joined #taxation-personal
tatelev
2017-11-21 08:00
hi, anybody can tell me a little bit more about being exempt of form 5472 for foreign owned US LLC and dealing with form 8833 instead? I?m trying to figure out which of the 2 paths I should go with.
tatelev
2017-11-21 08:01
With so many members here that I see that have sole-member foreign owned disregarded LLC there must be some of you that have researched this :slightly_smiling_face:
bwings.office
2017-11-23 10:38
has joined #taxation-personal
nickc
2017-11-25 14:38
Hi all,
Looking for some advice.
Trying to setup a company with a friend. We want to give advice to and manage sportspeople (in our specific sport), and charge a fee for that. Since my friend and I are travelling almost non-stop we should be able to do all of the "work" outside of our home country, the Netherlands.
Now we are considering where to setup this company. I think a UK LLP would still be seen as a taxable entity in the NL for example.
We are both very green when it comes to taxation but we both know that if we setup a company in the Netherlands that we would be massively taxed. Since we are travelling so much and able to do the work abroad, I think there should be opportunities.
jase
2017-11-26 08:52
I'm no expert @nickc but my assumption is you will need some sort of established presence in another country if you want it to have tax residency there. For instance, HK may be a good option, so long as you have an office there, maybe an employee (someone to help with admin or accounting?), a phone line, etc and you take corporate meetings there.
You are in motorsport yeah? Is the circuit you follow mainly in Western Europe? If so it may be worth exploring the Andorra option. It comes with it's own set of hassles but the banks are used to dealing with rally drivers/moto riders (my friend does the same thing as you, just with motocross/superbike riders). All said and done you'd probably pay around 6% in corporate tax. less with deductions.
If it's more worldwide, and you spend more time abroad you have a lot of options.
jase
2017-11-26 08:53
Summary: I *think* you'll want the company to be considered a tax resident in it's place of incorporation.
ahl
2017-11-27 08:14
has joined #taxation-personal
ahl
2017-11-27 09:54
Hey i'm new in the Freedom Surfer community , I'm interested on open a off shore company for Crypto day trading , some one here been thru the process and can give some first best step ?
pedrodemendez
2017-11-28 03:14
Choose your personal residency first I think. Cause the country you are a tax resident of might claim that you operate the company from their soil and that you need to pay taxes there (country of personal residence) also
pedrodemendez
2017-11-28 03:15
I am looking at the same kind of thing. Complicated stuff.
pedrodemendez
2017-11-28 03:16
Also perhaps its better to pay some tax, instead of zero tax.. At least that what is what I am starting to lean towards more recently
johncitizen
2017-11-28 05:46
@pedrodemendez you might be onto something there. You want to be able to produce a tax certificate from a country to produce to another country if it helps. However it?s always best to have profits from the company and only pay yourself what you need, only pay taxes on what you have to.
pragmatic
2017-11-28 10:12
@pedrodemendez I'm still trying to figure out how the place of management rules work. If you run, let's say a US corp, from Europe (ie, not a low/no tax company), would the European authorities want to tax it? I don't believe they could convince the US that it should be taxed in Europe instead?
tatelev
2017-11-28 15:43
@pragmatic doesn?t that depend on a case by case basis to what tax treaty the US has with each country? I think on each tax treaty it is left clear when a company or individual is considered resident on each of the 2 signing countries
tatelev
2017-11-28 15:44
though I suspect that most tax treaties that USA has with each european country must be roughly the same or very similar text
pragmatic
2017-11-28 21:32
@tatelev My reading of the tax treaties between US and EU countries is that the country where the permanent establishment is, ie, place of management, is where taxes should be paid. But in this case, when doing the tax return for the US company, how do you tell the IRS, "We actually don't owe you any taxes, because we will give them to this european government instead"?
johncitizen
2017-11-28 21:58
By being a legal resident of that country and severing ties with the US
johncitizen
2017-11-28 21:59
The goal is to build a life in one country and disband your life in the US
pragmatic
2017-11-28 22:05
I don't think you understand. I live in a European country and wish to start a US corporation (US-based for commercial reasons).
johncitizen
2017-11-28 22:06
Oh in that case why don?t you go with something like a Delaware LLC?
pragmatic
2017-11-28 22:07
Not an LLC, it needs to be a corporation.
pragmatic
2017-11-28 22:07
Since initially, it won't have an office in the US (or anywhere), it's likely my country of residence, if it applied those rules, would consider it a tax resident.
pragmatic
2017-11-28 22:07
So, when doing a tax return in US, I would just say no income, and instead declare it as a resident of my country of residence?
tatelev
2017-11-29 09:52
@pragmatic You have to carefully read the specific tax treaty between USA and the country where you live, but in most cases, if the company is american(a corporation) USA forces you to pay federal income taxes in USA
tatelev
2017-11-29 09:53
if in the tax treaty of USA with your country says that your us company will be considered tax resident in your country, then you will have to also report your income in your country but normally be exempt of whatever tax you have already paid for this corporation in USA
tatelev
2017-11-29 09:53
but still you will have to report all this in your country
tatelev
2017-11-29 09:53
that is my rough understanding
tatelev
2017-11-29 09:54
where do you live?
tatelev
2017-11-29 09:55
BTW, FYI From previous posts I know that you have a us LLC. Do you know that some states allow for a relatively easy process of mutating your LLC to a Corporation? Wyoming is certainly one of them. If you are interested, I have this info
mathieu.bouvier
2017-11-30 02:25
has joined #taxation-personal
mathieu.bouvier
2017-11-30 03:06
Hey guys, just joined. Quick question about wyoming llc, thinking about creating one for my biz but does having most my clients from usa affect my passthrough llc taxation? I am a canadian resident and want to make sure i dont owe any taxes in usa, only where i reside
pragmatic
2017-11-30 10:16
Doesn't matter where your clients are
alex.bosyj
2017-11-30 19:40
Let's say I live in Ukraine and have an estonian company and pay myself a salary to a personal US bank account.
How do I make sure that I don't owe the US any taxes?
cbf
2017-11-30 20:07
has joined #taxation-personal
pragmatic
2017-11-30 21:48
@bmapilot why would you owe the US taxes? Having a US bank account has nothing to do with where you owe taxes
alex.bosyj
2017-11-30 22:52
even if a US person makes a transfer there? that doesnt count as us sourced income an hence taxable?
tatelev
2017-12-01 11:56
@alex.bosyj @mathieu.bouvier This is the most concise explanation I?ve seen so far which dispells a lot of misinformation and confusion you?ll find around the internet. For my own sake I hope he is right and his information is updated LOL
alex.bosyj
2017-12-01 12:14
fantastic article! thank you
ivan
2017-12-01 12:39
I've read recently that LLCs owned by foreign corporations might start being taxed as corp in the US due to new regulations, anyone heard more about it?
mathieu.bouvier
2017-12-01 17:22
@tatelev thanks for sharing ! This clarify everything.
mark24
2017-12-02 23:58
has joined #taxation-personal
pablesque
2017-12-03 14:35
has joined #taxation-personal
mikeseo
2017-12-05 01:11
For Americans: Stewart at http://ustax.bz said the new tax bill won't change the $100k salary feie,
but it will start taxing retained earnings above $100k at ordinary tax rates instead of not taxing them.
And there will be a one time 15% tax on existing retained earnings.
ahl
2017-12-05 19:37
Hey any one have experience with "nomadcapitalist"?
pragmatic
2017-12-06 10:15
EU released a list of blacklisted and grey listed tax havens
pragmatic
2017-12-06 10:15
UAE among the black-listed countries
pragmatic
2017-12-06 10:15
and South Korea, interesingly
pragmatic
2017-12-06 10:16
I don't see republic of Georgia anywhere :slightly_smiling_face:
ivan
2017-12-06 13:14
@pragmatic very intersting, thanks
ivan
2017-12-06 13:14
I wonder about this
ivan
2017-12-06 13:14
. Fair Taxation
2.1 Existence of harmful tax regimes
The following jurisdictions are committed to amend or abolish the identified regimes by 2018:
Andorra, Armenia, Aruba, Belize, Botswana, Cabo Verde, Cook Islands, Curacao, Fiji, Hong
Kong SAR, Jordan, Liechten
stein, Maldives, Mauritius, Morocco, Saint Vincent and the
Grenadines, San Marino, Seychelles, Switzerland, Taiwan, Thailand, Turkey, Uruguay and
Vietnam
The following jurisdictions have not explicitly reiterated the commitment taken at the FHTP to
amend or abolish the identified regimes by 2018:
ivan
2017-12-06 13:15
What does it imply for companies in these jurisdictions?
stoplight
2017-12-06 14:52
@pragmatic?thanks for the list?i?m quite surprised that only 4 Caribbean nations are on the list?looks like there?s more pressure from the EU?
danz
2017-12-06 15:06
What are the actions the EU is going to take on those countries?
stoplight
2017-12-06 15:09
@danz I guess that?s the big question really we all want to know the answer to?.?I know many countries on the list have visa-free access to the EU?.would it be possible they can take that away? What else can they do? They can?t really do much sanctions to these countries can they?
danz
2017-12-06 15:10
Yeah I was wondering that to, I don?t think they will do that as it would hurt their economy to some way.
pragmatic
2017-12-06 15:54
@stoplight "They will face restrictions in receiving EU funding and investments from the European Investment Bank. The bloc's member states can also decide on imposing their own sanctions, based on the blacklist."
pragmatic
2017-12-06 15:56
Also, regarding the Caribbean nations: "A further eight jurisdictions affected by recent hurricanes will be addressed in February."
pragmatic
2017-12-06 15:56
They gave them more time
skat
2017-12-07 10:05
@pragmatic European Investment Bank is not the only player nowadays. China has formed another investment bank in Asian region that focuses on same goals as EIB. So, i guess a lot of Asian countries shouldn?t care?
stoplight
2017-12-07 17:26
@pragmatic yup definitely agree?and hopefully those countries fix it before then?the immediate effects may not be felt but long term ones may make dents?
stoplight
2017-12-07 17:39
@skat China is already giving lots of yuan to the Caribbean islands?but the EU and North America is still their primary market?it?s more geopolitics for China?.I have no doubt that in the future?they will build a base like what they have done in Djibouti and Zimbabwe?they?re buying their way into the region?.and may eventually build their base in any of the small islands?Antigua used to host a US-military base until 2015 which had to close down due to US budget cuts?it?s basically idle land now?.more than 200 acres of idle land to be precise?.with China?s strengthening relationship with Antigua?who knows..they might just take over this strategic location?after all..many of the buildings are still there?
pristinegems4c
2017-12-11 17:05
has joined #taxation-personal
diamantino.ferreira
2017-12-13 19:00
has joined #taxation-personal
tatelev
2017-12-14 21:35
hi, anybody here non-US which owns a U.S LLC(disregarded entity) that has filed or will file Form 5472 ?Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business? ?
ivan
2017-12-16 09:34
Guys, are there risk of an estonian business to be declared pass-through? I know it's huge risk with off-shore jurisdictions. I wonder if that's the case with Estonia, specially in countries without tax treaties with them.
ivan
2017-12-16 10:14
I wonder about double taxation as well, for countries without a tax treaty.
tatelev
2017-12-16 12:17
Also, I?m trying to figure out if Form 5472 can be filed electronically. I understand that I have to file it before 31st December, since I?ve had member contributions in 2017, so if I would have to file it by traditional mail, I?m a bit tight with time:face_with_rolling_eyes:
cbf
2017-12-16 19:42
@ivan In Canada for instance, your offshore corp needs to pass the mind and management test (and other tests) for it to be considered an Estonian business or else they will consider the revenue like it was a Canadian business. Many countries have adopted this test as well.
cbf
2017-12-16 19:43
need to have 5 or 6 full-time employees working for the Estonian company etc...
ivan
2017-12-16 20:05
@cbf that's good info. Thanks a lot. I'm investigating the test right now.
globalkibo
2017-12-17 10:35
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replay
2017-12-18 14:48
does somebody have a recommendation for a paraguayan tax lawyer? I have a bunch of questions that i'd like to ask a professional
replay
2017-12-18 14:49
i'm resident of paraguay, but i'm not sure if i have to pay taxes on capital gains if the capital is outside of paraguay
ivan
2017-12-19 12:04
@tatelev were you able to solve the issue?
tatelev
2017-12-19 12:08
@ivan what issue
tatelev
2017-12-19 12:09
about the form 5472?
dfmanagement
2017-12-19 12:18
has joined #taxation-personal
tatelev
2017-12-19 14:37
I learned some new things about the form 5472, one of them very important is that IRS is still changing it LOL
tatelev
2017-12-19 14:39
and that for disregarded entities LLCs foreign owned(if there were any ?reportable transactions? in the year), the form has to be filed together with a ?dummy? tax filing form in the same deadline as companies that do file normal income tax filing
tatelev
2017-12-19 14:39
so April of the following year
tatelev
2017-12-19 14:39
?tax year? end is taken as 31st of December
tatelev
2017-12-19 14:40
and here is the link to the DRAFT of the form on the IRS website, which shows that they are still changing and adding things
tatelev
2017-12-19 14:41
in that draft it already says of interest:
tatelev
2017-12-19 14:41
"?While a
foreign-owned U.S. DE has no income tax
return filing requirement, as a result of final
regulations under section 6038A, it will
now be required to file a pro forma Form
1120 with Form 5472 attached. The only
information required to be completed on
Form 1120 is the name and address of the
foreign-owned U.S. DE and Items B and E
on the first page.
?Foreign-owned U.S. DE? should be
written across the top of the Form 1120
with Form 5472 attached. Attach Form(s)
5472 to Form 1120 and file these forms by
(1) fax to , or (2) mail to:
Internal Revenue Service, 201 West
Rivercenter Blvd., PIN Unit, Stop 97,
Covington, KY 41011.?
tatelev
2017-12-19 14:42
so we must keep an eye to potential changes in the next months. Luckily until April 2018 there is some time
tatelev
2017-12-19 14:43
credit of this awesomely clarifying finding goes to @otkeedca :slightly_smiling_face:
ivan
2017-12-19 14:48
@tatelev thanks a lot for the data. I was aware of a form needed to be filled by april next year. I was told about one related to partners withdrawing funds from the LLC.
ivan
2017-12-19 14:48
Looks like this one is new and a different one.
tatelev
2017-12-19 14:51
I am just asuming that the deadline for form 5472 will be the same as for C Corps filing form 1120 and that would be April 17th 2018
tatelev
2017-12-19 14:51
(this needs to be verified)
pragmatic
2017-12-20 13:23
Bank account does not matter. Nor the client's residence. What matters is where the work is performed.
alex.bosyj
2017-12-20 15:24
thank you for clarifying @pragmatic!
trevorjames
2017-12-21 03:03
if I'm a non-tax resident of Canada, and transfer some money from my HK corp into my Canadian personal bank account to buy real estate, what will the tax implications be?
ggiampieri
2017-12-21 05:16
For italian ppl would be the perfect reason for govt to bring back your residency, and having utility bills on your name with power/gas usage it is just confirming it. You should buy with foundation/trust/company+holding and let it to a friend/relative for free to put utility bills on his name. I don't know about Canada, but I am sure many EU countries work like this. Just be super careful as having home means you have ties to the country. Only workaround if it is on your name, it is to rent it to someone with registered contract and pay taxes on earnings, as if you are resident elsewhere you still need to pay taxes on profits from assets in your home country.
trevorjames
2017-12-21 14:44
That is perfect. I forgot to mention the plan is for investment to rent to others.
trevorjames
2017-12-21 14:45
So if I transfer the money into Canada into my personal bank and buy property and immediately rent it out, we just pay taxes on the profits in Canada, sounds right?
trevorjames
2017-12-21 14:45
What about the actual transfer into Canada? That amount would be tax free I think?
ggiampieri
2017-12-22 10:50
Yes it is tax free, but be careful of local laws as well. And beware of bubbles, if you look at airdna and p/e ratios, europe is best compromise and banks do give mortgages at very low rate!
trevorjames
2017-12-23 20:44
Awesome! I will look into that. I can get low mortgages in Europe? The mortgage broker here is saying it will be hard to get anything without 50% down because we are non-residentw
ggiampieri
2017-12-24 05:18
Just ask banks, for example when I asked in spain they applied same rules as spain citizens. In Croatia they don't..
ggiampieri
2017-12-24 05:20
But you are right, in most countries it is 50% for non residents. It might be the case that having same currency and Eu passport they see the risk much lower!
bifton1
2017-12-30 08:23
has joined #taxation-personal
rachel
2017-12-30 15:50
has joined #taxation-personal
ciorbaadrian82
2018-01-02 23:37
has joined #taxation-personal
franc.feliu
2018-01-03 11:24
has joined #taxation-personal
franc.feliu
2018-01-03 11:50
Hi there! I am a resident and citizen of Spain and run an ecommerce dropshipping business. For me its a must to be able to use Stripe and Shopify. What would be the best options countries to incorporate in? UK or Estonia are good options?
franc.feliu
2018-01-03 11:52
I currently own a UK Ltd but its not clear to me how to reduce the tax on it as Ive read about UK LLP
ggiampieri
2018-01-03 12:01
With LLP you are taxed as the owner of the company, it means profits pass to you taxless. With LTD the company itself is taxed, then you remit taxed profits to yourself.
it.consultant.experti
2018-01-05 13:09
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jor.acker
2018-01-05 16:26
Hey guys, my actual fiscal residency is in france and i'm planning to set it up in HK, i already live abroad (i play poker online) and have no estate in france, i plan to do a working holliday and set my official adress of residency there, and therefore not have any criteria of french fiscal residency anymore.
So after i get my WH and my HKID, where should i go and what administrative procedures should i follow to officially set my official adress in HK in regard to the france tax system ?
ggiampieri
2018-01-06 05:17
You should go to your embassy and let them know,but the working holiday expires.. then you need a good visa or change country
jor.acker
2018-01-07 21:20
okay thanks i'll see with the embassy when i'll be there
Hmm but if i change my fiscal residency and don't change it again afterwards, it will not go back to france so i would be good no ? I don't plan to stay in HK anyways, i'm just travelling around every 3 month
rtiagm
2018-01-08 06:18
Does anyone know if the form 5472 is only required for LLCs engaged in U.S. Trade or Business?
tatelev
2018-01-08 15:53
required for any LLC that has 25% foreign ownership or more that has had at least one reportable transaction in the tax year
ggiampieri
2018-01-09 01:55
@jor.acker our embassy wants to know where we are, if they send you mail or look for you but you are not reachable... they will assume you are back home, unless you have registered with an embassy in other country. You need to know how your home country behaves! I know nothern EU countries don't care, so first time you register is fine.
ggiampieri
2018-01-09 01:57
So make sure you have a very long visa... or move to a country where you don't need visa (Shenghen would be fine if you have EU passport)
kim
2018-01-09 15:38
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jor.acker
2018-01-09 15:54
@ggiampieri I see thanks for the info that's impotant yea
Also i heard that keeping an active bank account in the home country might be an issue, will this be true even if i'm fiscally in HK ? (at least for a year with the WH holliday visa then) I was planning to keep some monney moving on my french bank account
ggiampieri
2018-01-09 16:24
Yes it can be, just use revolut or similar service. Dont use cards linked to french account in your country
stoplight
2018-01-09 19:13
Can anyone recommend a website that offers free tutorials on how to file accounting documents for UK companies house?
tatelev
2018-01-10 15:48
@stoplight I have filed a couple of times some things with Companies House and they had a very clear video tutorial right on each case on their web filing website. You have access to their WebFiling system? https://ewf.companieshouse.gov.uk//seclogin?tc=1
stoplight
2018-01-11 02:56
Thanks @tatelev Yup I do! Saw some of those tutorials. Will look for accounting specific videos. Hope they have some. Thanks!
ivan
2018-01-11 10:57
Interesting information @mikeseo
ivan
2018-01-11 10:59
So corporations in the US are now going to be taxed by territory? So a foreigner with a corp in the US would be exempt of paying taxes as long as the company sells outside the US?
geoffrey.theodule
2018-01-11 17:16
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mikeseo
2018-01-11 20:39
@ivan I haven't seen a good explanation of the territorial corp tax yet but I don't think they made it that easy. The new tax rules were bad for me, my Belize corp doing biz outside the US can't retain profit tax deferred anymore.
ivan
2018-01-11 20:45
you're a US citizen? In Argentina they did the same thing but only if the corp profits are 50% passive or more.
ivan
2018-01-11 20:46
but unlike US citizens, that issue is solved the moment you change your residence.
mikeseo
2018-01-12 05:31
ya, ah nice
geoffrey.theodule
2018-01-12 13:37
**US LLC to operate Amazon FBA US activities for non US residents/citizens**
Hi guys, I'm new to the slack channel, happy to be here!
Question: does anyone uses a US LLC to operate his Amazon FBA business in the US, as a non resident, and if yes, what are the the corporate tax implications that comes with IRS, if any? I read conflicting information from different tax attorneys, some say that having stock in US Amazon fulfillment centers and selling products in the US does not constitute permanent establishment, that Amazon is considered independent agent, and that IRS wouldn't see your profits as US-sourced profits, others claims the opposite and that tax will be withheld... anyone who's gone through that and has the legitimate answer? Thanks everyone so much in advance!:grinning:
petrus.luijpers
2018-01-13 23:29
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timpetch
2018-01-18 10:24
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thesimitch
2018-01-19 05:54
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smuft84
2018-01-20 22:11
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mattbellme
2018-01-21 10:37
hey guys is there anyone who can answer this question: if you are a digital nomad living in a territorial tax country, but you are working online, say on a business based in another country, does this count as foreign income? Or is based on where you are living?
smuft84
2018-01-21 10:48
I'm assuming you are a tax resident of the country in question. In that case if it's a territorial based tax system and you are working online for a business that is registered in another country, it is foreign based income and not taxable. This is the general rule but there is exceptions in some countries. If you want to be sure I'd speak with someone who is experienced with a similar structure in that same country or a tax account from that country.
mattbellme
2018-01-21 10:52
Im in a country that taxes worlwide income, but Im considering a move. The country Im thinking of moving to is Costa Rica
smuft84
2018-01-21 10:53
US citizen?
mattbellme
2018-01-21 11:35
no
rtiagm
2018-01-21 14:12
Are you talking about personal income tax?
rtiagm
2018-01-21 14:13
Based on my experience in Malta , you would have pay tax.
rtiagm
2018-01-21 14:14
The work is done there even if remotely
mattbellme
2018-01-21 14:51
ok, yeah personal tax. But if all of the profit is kept in the business whats happens in that case?
mattbellme
2018-01-21 14:51
pretty hard to police, people working remotely on laptops though?
mikeseo
2018-01-21 19:26
ya 3rd world country + territorial taxation = not really policeable
stoplight
2018-01-22 01:17
would have to agree with @mikeseo on that one?
skat
2018-01-24 08:17
@skat has left the channel
pragmatic
2018-01-24 14:20
lol, this list is clearly political
danz
2018-01-24 18:46
It definitely is, it?s funny to see how this works
stoplight
2018-01-25 17:17
Nevis IBC?s under the new Business Corporation Ordinance may apply for a tax resident certificate?and since St. Kitts & Nevis has zero taxation?well?you get the idea.. :slightly_smiling_face:
mcdonald.ben
2018-01-25 23:47
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marius.pellegrini
2018-01-31 10:15
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tatelev
2018-01-31 17:38
hi, after some back and forth with Paypal USA support to get past my obstacle that I?m being asked for SSN as soon as I login eventhough I succesfully verified the US bank account and debit card for my Disregarded Entity US LLC (I have a US registered address for the LLC but I?m neither resident nor citizen of USA), the Paypal support rep did some research and then sent me this email:
tatelev
2018-01-31 17:39
?Thank you for contacting PayPal with your concern.
Our best course of action is to have you click this link to fill out an IRS document https://www.irs.gov/pub/irs-pdf/fw8bene.pdf
Once you have it filled out you can email it to us as an attachment to from the email address on your account.
Please put this ticket number on the subject line of your email: XX-XXXXXX
I have already requested assistance once the form is received to try to expedite this for you as quickly as possible?
tatelev
2018-01-31 17:40
So Paypal support is asking me to fill a W8-BEN-E
tatelev
2018-01-31 17:41
Is this right? On my amazon selling account long time ago I had to choose ?Individual/Sole propietorship? and fill a W-8BEN as an individual (not W-8BEN-E as an entity)
tatelev
2018-01-31 17:41
so I?m confused now with what Paypal is asking me to do?
tatelev
2018-01-31 17:57
This are the instructions for the W8-BEN-E:
tatelev
2018-01-31 17:58
on the section ?Do not use Form W-8BEN-E if:? it says:
tatelev
2018-01-31 17:58
??You are a disregarded entity, branch, or flow-through
entity for U.S. tax purposes. However, you may use this
form if you are a disregarded entity or flow-through entity using this form either solely to document your chapter 4 status (because you hold an account with an FFI) ??
tatelev
2018-01-31 18:00
should I understand that eventhough I am a disregarded entity, I?m being asked by a FFI (Paypal?) to document my chapter 4 status, therefore I do have to fill this form for Paypal?
ivan
2018-01-31 18:32
I believe some other credit card processor asked me to fill the same form for my LLC, which I didn't
ivan
2018-01-31 18:32
It's quite complex to fill, Stripe didn't ask me to do so.
tatelev
2018-01-31 21:05
@ivan so some credit card processors asked you to fill that form, and you decided you didn?t want to? So I?m asuming that you chose not to work with them and use Stripe instead?
ivan
2018-01-31 21:08
yes, that what I did, but if I remember correctly you needed Paypal. So I was basically mentioning it for you to know there's other card processors asking for that.
tatelev
2018-01-31 21:09
yes, I need Paypal for Ebay
tatelev
2018-01-31 21:09
otherwise I wouldn?t bother
tatelev
2018-01-31 21:10
what I need to figure out is if it is legit that I fulfill that requirement by filling that form(I read somewhere that 80% of the form you can leave it blank if it doesn?t apply to you)
tatelev
2018-01-31 21:12
I mean I would be appearing as a non-us individual(W-8BEN I filled for Amazon) and as a non-us person disregarded entity(W-8BEN-E filled for Paypal) simoultenaously for the IRS. I have no clue if that is something completely normal or if it?s messy
manishwalia53
2018-02-01 05:24
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tatelev
2018-02-01 10:47
I decided to ask about this on ?justanswer,com?(cheap legal q&a) and this was the answer of the lawyer:
tatelev
2018-02-01 10:48
she first said: ?PayPal is incorrect. They obviously don?t know what form to request from you. For an LLC treated as a disregarded entity, Form W-8BEN is submitted?
tatelev
2018-02-01 10:49
when I insisted that Paypal is requesting the W-8BEN-E and showed her the fragment in the W-8BEN-E instructions that mentions a case where a foreign owned disregarded entity US LLC can file this form, she replied:
tatelev
2018-02-01 10:50
?You would not fall into that situation to complete Form W-8BEN-E, but if PayPal is insisting on the W-8BEN-E rather than the W-8BEN, I guess you have no choice.
The W-8BEN series of forms are not sent to the IRS. They are informational documents that are retained by whoever requests them as their documentation/proof.
In other words, there will be no issue for you.?
tatelev
2018-02-01 10:50
thoughts?
ivan
2018-02-01 20:19
That's great info @tatelev. The bit about justanswer as well, seems quite useful.
tatelev
2018-02-01 23:18
@ivan that is if I decide to take the justanswer lawyer advice seriously
tatelev
2018-02-01 23:21
I?m not capacitated to distinguish knowledgeable advice. Not all lawyers are good. Another lawyer firm I contacted with the same question answered: ?We?re happy to assist you on this, but per our firm policy and due to liability issues, we work only by formal engagement. We can assist you on this, but will need to research a few things first. The law in this area is a bit convoluted and tricky. We would request USD800 with payment in advance? :slightly_smiling_face:
ivan
2018-02-01 23:25
Haha! I just contacted a lawyer today about the residence issue and they asked me for USD200/hr. Which for the Argentinian market is quite a lot. Everything regarding taxes seems to be "tricky and convoluted" haha. I wonder if that's not in purpose. It would be so easy if governments charged a reasonable mono-tax.
ivan
2018-02-01 23:26
@tatelev
mikeseo
2018-02-02 23:07
US tax reform "territorial" taxation https://mailchi.mp/hodgen/friday-edition-in-which-foreign-corporation-income-is-made-taxable-and-we-discover-what-they-really-think-of-us
tatelev
2018-02-05 09:13
hi, following the info I posted a couple of days ago, I would appreciate opinions on the filling of the W-8BEN-E to give to Paypal USA for a disregarded entity single foreign owner LLC, thanks
travelosopher
2018-02-07 02:39
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vinodgn0088
2018-02-11 12:14
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burrup.lambert
2018-02-12 11:21
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max
2018-02-14 12:55
^ This is an interesting information, sadly as with most EU regulations this may mean many things, very vague, but looks like it might be threatening to some of us.
stoplight
2018-02-16 05:33
And so the EU is starting to be the US?oh no..
mattbellme
2018-02-16 12:17
does anyone know, if you live in a territorial taxation country and have income from foreign real estate, what are the tax impications? Do you have to file returns in the country where the property is located? Are there some countries that do not withold tax?
mikeseo
2018-02-16 14:15
you would most likely be supposed to file returns and pay tax to the country where the property is, not the territorial tax country where you live.
mattbellme
2018-02-16 14:52
right
mattbellme
2018-02-16 14:52
im assuming countries with no income tax wouldnt care then?
tkrunning
2018-02-17 15:09
I had to join the group to see the post? Turns out the group admin was sitting 5 meters away from me :stuck_out_tongue: #random
johncitizen
2018-02-17 21:43
Link doesn?t work
tkrunning
2018-02-18 02:45
@johncitizen if you?re referring to the FB link, you?ll need to join the group for the link to work
rp_vpnet
2018-02-18 07:10
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ca
2018-02-18 18:34
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rp_vpnet
2018-02-20 10:09
malaysia
nort17
2018-02-21 02:11
Has anyone heard from @simon? I have tried to contact him many times and now we need to submit our tax return for LLC but not getting any replies.
dustdancer
2018-02-23 02:04
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augustas
2018-02-23 17:49
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ledrewy
2018-02-24 01:51
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madtruckers
2018-02-24 09:44
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piotrstelmach
2018-02-25 15:00
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freedom
2018-02-26 05:34
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thy
2018-02-28 23:49
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pedrodemendez
2018-03-04 06:21
Situation: I am a tax resident (personal) in a country with territorial regime. I setup company in a country with 0% on foreign income (for instance Hong Kong or Gibraltar). Could my country claim I am managing the company from where i live, and tax my corporate income? Is there a way to make this no happen? FYI there is also no tax treaty between my country and the two HK/GB mentioned.
harvie
2018-03-04 15:46
@pedrodemendez check your country CFC laws.
anemariaconcepts
2018-03-05 14:19
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pedrodemendez
2018-03-06 04:52
@harvie Its the Philippines, and no it looks like they don't have CFC laws..
mikeseo
2018-03-06 05:39
@pedrodemendez I'm in the same situation and from what I've seen and heard, the gov here is too dysfunctional to be monitoring a foreigner using a foreign company. The culture seems to be "taxes, why would you want to pay that?" "the gov is too corrupt and just wastes your money anyway"
mikeseo
2018-03-06 05:41
https://www.bir.gov.ph/index.php/tax-information/income-tax.html#it002
Who Are Required To File Income Tax Returns:
Resident citizens receiving income from sources within or outside the Philippines
Non-resident citizens receiving income from sources within the Philippines
Aliens, whether resident or not, receiving income from sources within the Philippines
mikeseo
2018-03-06 05:41
https://home.kpmg.com/xx/en/home/insights/2011/12/philippines-income-tax.html
Do the immigration authorities in the Philippines provide information to the local taxation authorities regarding when a person enters or leaves the Philippines?
No, although the two agencies may coordinate on certain transactions such as visa renewal. The immigration authorities may also require the submission of income tax return filed with the tax authorities.
mikeseo
2018-03-06 05:42
An alien individual, whether resident or not of the Philippines, is taxable only on income from sources within the Philippines; hence, aliens are exempt from Philippine income tax on salaries earned from working abroad.
mikeseo
2018-03-06 05:42
http://taxsummaries.pwc.com/ID/Philippines-Individual-Taxes-on-personal-income
The Philippines taxes its resident citizens on their worldwide income.
Non-resident citizens and aliens, whether or not resident in the Philippines, are taxed only on income from sources within the Philippines
pedrodemendez
2018-03-06 07:29
Yes according to these docs it should work out fine. I'd rather know for sure.. but that might be difficult..
mikeseo
2018-03-06 11:40
what will you do if you ask the BIR and they say yes you owe taxes?
mikeseo
2018-03-06 11:41
are you running a office with employees or just working on your laptop from home?
thy
2018-03-06 19:51
@pedrodemendez https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-philippineshighlights-2018.pdf
This source says (for Philippines in 2018):
Thin capitalization: No
Controlled foreign companies: No
Disclosure requirements: No
Corporate Residence: A corporation is resident if it is incorporated
in the Philippines or, if incorporated outside the
Philippines, it has a branch in the Philippines.
(in other words, there seems not to be any rules bound to place of management or shareholders)
Hope it helps.
Other than that, I have a question for the community: Is there any tax professional in the group, who can consult residents from high-tax countries about options to minimize taxes and about CFC rules, substance requirements, etc.?
thy
2018-03-06 19:54
Also @pedrodemendez please note, I am not a tax professional of any kind, I have just found these public sources and I understand what?s written there, to some degree. It is always good to ask a tax professional with experiences for countries you are involved in, for an advice.
pedrodemendez
2018-03-07 04:34
i don't have a company yet.. am just researching
pedrodemendez
2018-03-07 04:35
thx for the 2018 link.. had only found 2016 documents..
pedrodemendez
2018-03-07 04:37
@mikeseo i might just move to another country. but all looks good. it confirms what i hear from foreign businessman that live here..
pedrodemendez
2018-03-07 04:41
"nonresident companies are taxed only on
Philippine-source income. A foreign corporation with a
branch in the Philippines is taxed on Philippine-source
income." -----> also this, also the personal tax is on philippine-sourced income only... i pay taxes here on local investments, rest is all happening outside Ph, and never even entered the PH after I moved here..
mikeseo
2018-03-07 08:56
while I was applying for residency in PH they asked me what my job was but never anything about taxes
mikeseo
2018-03-07 08:57
and it seems common to not pay income tax on the rent, if you buy and rent out your condo...
mikeseo
2018-03-07 08:57
they said "just say your family lives there"...
ec9731a
2018-03-08 08:39
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julienplefebvre
2018-03-08 13:26
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mart.herndz
2018-03-08 15:30
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benjamin
2018-03-08 23:44
Similar Scenario to @pedrodemendez I need help with. I would love some advice.
I'm based in Australia, I have a HK company.
It looks like because I'm based in Australia the HK company is now a tax resident of Australia.
How can I make it so its not a tax resident of Australia? I'm a one man show and therefore the controlling party.
I don't even think its going to be possible. Would love someone's opinion
thy
2018-03-08 23:59
@benjamin I guess that making some ?substance? to the HK company will make it more legitimate for Australian authorities. Substance could mean hiring a resident director (even hiring it for the minutes and thus paying for the minutes he signs papers - I think some people call this kind of service like ?private nominee? because its not the official regulated nominee but a hired person) and making some distance between you and the company so it won?t seem that the company is incorporated clearly for tax purposes. Own it through a trust could give even some more distance from you as a controlling person.
I hope that any tax professional could comment on this because I am not one actually.
mikeseo
2018-03-09 02:14
@benjamin probably move to another country and do whatever is required to be a non-resident in Australia
johncitizen
2018-03-09 07:34
@mikeseo I did that for 5 years
stoplight
2018-03-10 00:14
@pedrodemendez @thy @mikeseo the Philippines has preferential treatment for foreigners but for those like myself who were unfortunately born here, we get crap shit from the BIR. I got into the offshore scene because of them ar$$holes.. :joy: ?
stoplight
2018-03-10 00:17
generally if you fly under the radar and work digitally, chances are you won?t pay a single cent of tax while you?re in the Philippines. Unless you start opening a local company and hire local folks to work for you, you pretty much will be safe from the BIR specially if you live on the outskirts of the metropolitan cities and ?pretend? to be a lifetime pensioner. Many have lived that way despite having actual businesses abroad. Foreign residency is also easy. You just have to put money in the bank and when you buy a flat/apartment/condo you can use that same money paying almost zilch to the government. Amazing right? :smile:
stoplight
2018-03-10 00:22
If you folks intend to plant a residency flag in the PH, it shouldn?t be too difficult. Putting up a small company would earn you some residency points for tax residency purposes. Please do note, as a foreigner, you can?t own land but you can buy condos which is what almost 100% of the koreans are doing here. If you?re firm is in a free zone, you may have further tax incentives. Although, only certain companies can be in free zones. Mostly tech. If you put up, say a tech startup, use local programmers and such, you can be in one of them free zone buildings.
stoplight
2018-03-10 00:26
Please do note, I?m not an expert on foreigners coming in locally as I prefer outbound consultancy work than inbound as I hate dealing with government corruption and red tape.
sacrifice24-10-91
2018-03-14 01:59
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paul.budny
2018-03-14 13:41
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freedomsurfer140
2018-03-14 16:29
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freedomsurfer140
2018-03-14 16:34
In looking at various residency and citizenship possibilities, one thing I don't see commented on much is (where applicable) the worldwide taxtation, and in particular, the CFC situation. Some of these residencies which initially look attractive (e.g. Mexico, Chile) turn out to promise a lot of tax headaches because of trying to tax things they had nothing to do with setting up or protecting.. One lawyer I spoke to recommened a trust to deal with this. Any thoughts on this issue?
maxsuur
2018-03-15 10:35
Before you set up residency anywhere, spend a few weeks in the country to have a feel for it. Once you've decided you like living in there for extended periods of time, then start all the necessary procedures. Otherwise, rinse and repeat in any other seemingly tax-advantageous country.
ggiampieri
2018-03-15 11:33
Agree 110% Thailand so far is a very good compromise from my point of view! Singapore is great, but only if you make money there. Personally I would skip Americas and Georgia, which is not that great feeling! Malta is red light flashing if you are from Europe!
maxsuur
2018-03-15 15:18
Do you mean "arise suspicions" by "red light flashing" for EU citizens?
ggiampieri
2018-03-15 16:06
Dubai is good option, but unless you are from a country which is served by wizzair or flydubai, getting there can be expensive, and in that case Asia is similar price and many more business opportunities
ggiampieri
2018-03-15 16:06
Yes, especially if you don't want to spend full 6 months there, at least for my country.. which is really close! Super rich go to Montecarlo, but no air ticket trailing in that case ...what a case ;) Switzerland is expensive and has some taxes. Andorra would be better!
iulian.florescu91
2018-03-15 19:08
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maxsuur
2018-03-16 00:16
Malta is just fine. Pretty cheap-o flights from Europe there.
tatelev
2018-03-16 12:36
For those that have foreign owned US LLC the deadline for filing the new Form 5472 is near(April 15th)
tatelev
2018-03-16 12:37
Anybody looked into it? Are you going to fill it yourself or will you get/hire help for preparing it?
rtiagm
2018-03-16 13:21
@tatelev Using http://ustax.bz, although I didn't use the LLC last year, so basically I need to declare zero
tatelev
2018-03-16 13:26
@rtiagm Can you say how much he charges for preparing it?
rtiagm
2018-03-16 13:46
Not sure. My client payed a yearly fee for his LLC services.
tatelev
2018-03-16 13:53
ok
augustas
2018-03-18 03:28
Do you know if C-Corp foreign director needs to file the 5472?
ozdemir_can
2018-03-18 10:46
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stolzlos
2018-03-19 19:11
can somebody recommend some good tax consultants based in the EU? thanks!
ivo
2018-03-20 15:33
@stolzlos You need a tax consultant, as in someone who holds a degree, or somebody who can help you with your tax optimisation? I can help with the latter.
stolzlos
2018-03-20 17:42
@ivo thank you very much for the offer. Unfortunately, I need a certified consultant to file my tax declaration with the authorities.
chris2224
2018-03-21 13:21
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robert.mihaila01
2018-03-26 21:08
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robert.gryphes
2018-03-28 16:25
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hozgur
2018-03-30 15:43
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philhech7
2018-03-30 18:06
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philhech7
2018-03-31 13:25
My LLC got opened a few days ago, do I have to file anything this year? The deadline for the 5472 is April 15, but I guess that is not relevant for me as it is for year 2017 when the LLC didnt exist? Thanks
ivan
2018-03-31 13:51
@philhech7, I'm not 100% sure but I'd assume you don't have to fill it until 2019. You need to report its 2017 activity in that form and you have nothing to report. Anyway, don't rely on my opinion because it's not very informed.
pragmatic
2018-03-31 16:22
You don't have to file anything this year
iamvaillancourt
2018-04-01 02:42
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tha.siva
2018-04-01 09:45
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tatelev
2018-04-02 14:13
hi, I will soon be submitting my LLC's form 5472 along with the dummy acompanying form 1120
tatelev
2018-04-02 14:13
since I don't reside in USA nor US citizen, my best option is to submit them to IRS by fax
tatelev
2018-04-02 14:14
anybody has submitted forms by fax before to IRS that can chime in? does this service work well, and how will I be sure afterwards that the fax with my filled forms was welled received in its entirety?
ivan
2018-04-02 14:19
I was wondering the same thing. I've an attorney taking care of it all, but they guy seems way to relaxed about the delivery date. Looks like he'll be sending it via FAX then.
tatelev
2018-04-02 14:22
since it's my first time, I'm a bit worried, since fax has already that aura of something old-fashioned
tatelev
2018-04-02 14:23
specially interested in knowing if anybody knows if IRS will let me know in some way that they received the filing
ivan
2018-04-02 14:59
Yes, it's surprising to hear it can't be delivered via email or a form in their website.
ivan
2018-04-02 15:00
I'll need to meet with my attorney this week regarding this. So If you haven't found anything by then I'll let you know what I find out.
jase
2018-04-02 21:02
@roman you have previously talked about the tax rate someone can reasonably pay in Canada, but I can't find a record of what it is/how it is set up. Do you have a helpful link on the topic? A friend is interested.
roman
2018-04-02 21:45
Personal or business?
roman
2018-04-02 21:46
I was talking about Ontario Corp I think. Which is 15% under $500,000.
roman
2018-04-02 21:46
You can pay yourself salary and dividends.
roman
2018-04-02 21:46
Depending on how much you need to live on you may qualify for lower personal tax brackets.
roman
2018-04-02 21:47
Personal tax is another story and nothing good about it in Canada hehe.
roman
2018-04-02 21:47
Same poor government milking the citizens. Scaling brackets up to 50% I think.
rtiagm
2018-04-03 03:31
@tatelev I sent via fax 2 weeks ago. The only confirmation I got was from the fax machine, basically saying that x pages have been sent.
jase
2018-04-03 05:22
Ah ok, I see @roman. Shame it is so high "all in". Thanks for your reply.
tatelev
2018-04-03 05:27
@rtiagm did you fill it yourself? any tips or recommended reading?
tatelev
2018-04-03 05:27
(other than the official irs form instructions)
rtiagm
2018-04-03 06:32
I had an accountant do it
rtiagm
2018-04-03 06:32
Mine was extremely simple though
roman
2018-04-03 18:15
@jase there are ways to optimize if you can live frugally. :) keep all of the money inside the company and reinvest. It all depends on each persons goals.
ivan
2018-04-03 18:39
@roman, is there a double taxation for your salary or dividends or those are covered in the corporation's 15%?
jase
2018-04-03 18:43
Double taxation I'd guess. Are CFC laws in Canada aggressive? Can one have a HK company pay all of their personal expenses in Canada?
prietonicolas
2018-04-05 15:51
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amrthewrestler
2018-04-08 16:04
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pabloaura
2018-04-09 09:27
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ivan
2018-04-10 20:19
@tatelev: the attorney who was going to handle my forms 1120 and 5472 completely messed up and didn't work on it without notifying me. Did you find someone reliable to help you with them? I read the instructions and completed them myself but I'm unsure I did it right.
tatelev
2018-04-10 20:20
I was going to do it myself
tatelev
2018-04-10 20:20
but I need to get up to date with my Quickbooks transactions first and I am heck busy this week. What I?ll probably do is file for an extension
tatelev
2018-04-10 20:21
so I can look at it more carefully in a couple of weeks when I am not so swamped
ivan
2018-04-10 20:25
how do you file it? You can send it via Fax?
tatelev
2018-04-10 20:26
the extension request form?
tatelev
2018-04-10 20:26
yes, fax
ivan
2018-04-10 20:27
Googling for that right now. Thanks a lot!
ivan
2018-04-10 20:29
Yes, was reading it, thanks.
tatelev
2018-04-10 20:29
I suspect many people will extend lol
ivan
2018-04-10 20:29
Was wondering about `the code for Form 1120 should be entered on Form 7004, Part I, line 1. "Foreign-owned U.S. DE" should be written across the top of Form 7004. `
tatelev
2018-04-10 20:30
I haven?t looked into it yet
tatelev
2018-04-10 20:30
in detail
ivan
2018-04-10 20:30
Okay, I'll check it out and tell you what I find out. Thanks for the info.
tatelev
2018-04-10 20:30
you could be my guinea pig lol
tatelev
2018-04-10 20:31
:+1:
ivan
2018-04-10 20:31
Haha, sounds like it.
ivan
2018-04-11 21:14
@tatelev, spoke to an attorney today. In my case sounds like because I selected the closing month of accounting year to be 01/31 I've one extra month. I'll be sending it pretty much myself with some guidance. Let me know if you need help with that later.
tatelev
2018-04-12 16:51
@ivan or anybody else that has a foreign owned US LLC: Do you have the same address on file with the IRS than the registered address of you LLC with whatever state you incorporated at?
tatelev
2018-04-12 16:52
I ask because in my case, IRS has my country?s address since that is the one I gave when I obtained the FEIN, but the LLC?s registered address I changed it at some point at Wyoming?s state, a US address that my registering agent let me use. I have set my bank to this US address and I also use this US address in all my business transactions
tatelev
2018-04-12 16:53
I wonder if others have a similar situation than me and if it can be problematic in any way
ivan
2018-04-12 16:59
I was wondering the something similar because for the LLC EIN the responsible party is me instead of the holding company I wanted to own the LLC. Seems like the EIN is the important document for the IRS. Not sure how strict they are about this stuff. It's logical that if WY register publicaly states your LLC address is there you could use the same address.
ivan
2018-04-12 16:59
But I've no idea really.
ivan
2018-04-12 16:59
@tatelev
tatelev
2018-04-12 17:00
I haven?t told IRS about my change of address, so they have my original spanish address on file(where I live)
tatelev
2018-04-12 17:01
I am wondering if when I file this forms(7004, 5472) if I would use an address that is not the one they have, that could be problematic
tatelev
2018-04-12 17:01
at the same time I wonder if having one address at IRS and another one as the official address at the state, could be problematic
ivan
2018-04-12 18:53
Yes, I don't know either. They make it all sound scary in their website. Basically "If the information is wrong you pay 10k".
mikeseo
2018-04-13 03:35
when I file my taxes as a US citizen, I put different addresses depending on where I'm living. My tax preparer said that address doesn't matter, just wherever I can receive mail.
tatelev
2018-04-13 14:55
I just filed my form 7004 by fax for an extension of time to file form 5472
tatelev
2018-04-13 14:57
After sending it I realized that I had not written ?Foreign-owned U.S. DE? as the heading, as it said on the 5472 extension instructions that I should
tatelev
2018-04-13 14:58
so I decided to add that and faxed the form a second time
tatelev
2018-04-13 14:58
wish me luck:cold_sweat:
ivan
2018-04-13 15:04
haha, good luck
tatelev
2018-04-13 15:12
Alea iacta est
tatelev
2018-04-13 15:13
what?s the worst that can happen? they?ll just fine me $10,000 :grinning:
ivan
2018-04-13 19:01
I wonder if they are that strict.
yuli
2018-04-14 03:20
I wanted to ask, for the nomadic and travelling people, how do you handle requests from banks or official governments for your last X years of tax returns?
yuli
2018-04-14 03:22
I was asked by it, and I do not have it. I am in the process of migration to Panama, and supposed to receive my permanent resident card there in the next 1-2 months
yuli
2018-04-14 03:22
wondering how anyone in a similar situation has handled that topic?
markamerling
2018-04-14 17:19
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nikolay
2018-04-19 04:57
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2018-04-21 03:28
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tkrunning
2018-04-22 11:58
Does anyone here know how a UK LLP would be treated tax wise by Portugal? What about a US LLC? Do they see it as a pass-through entity?
tkrunning
2018-04-22 12:00
And does anyone have any experience running either of those without a personal tax residency? I saw that on the form 5472 for the US LLC they ask for your personal tax residency, which I might not have?
aka
2018-04-23 13:21
portugal is not the best country to control your uk llp, unless you have that non habitual residency thing
aka
2018-04-23 13:21
portuguese taxes are heavy, on personal level, and even more on companies
n321
2018-05-05 06:01
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pedrodemendez
2018-05-06 07:53
pedrodemendez
2018-05-06 07:53
Permanent Resident in the PH
pedrodemendez
2018-05-06 07:53
sorry wrong channel #residency
tkrunning
2018-05-08 17:18
Getting NHR wouldn?t be an issue. But do you know for a fact that UK LLPs/US LLCs are treated as a pass-through entities, not a corporation?
jase
2018-05-08 20:35
I've been keeping the Andorra discussion to a minimum lately, but thought this was worth a share: https://andorraguides.com/tax/system/
aka
2018-05-09 15:16
tell me @jase
aka
2018-05-09 15:16
is it worth me opening a company there?
aka
2018-05-09 15:18
altough most employees/clients are in the uk. most of the clients will not care though if they are billed through andorra
jase
2018-05-09 15:19
Where are you resident @aka?
aka
2018-05-09 15:20
uk
aka
2018-05-09 15:20
:disappointed:
jase
2018-05-09 15:20
The thorough answer is, it's probably not going to help you.
aka
2018-05-09 15:20
yeah
aka
2018-05-09 15:20
because no double taxation regime..
jase
2018-05-09 15:20
CFC law or your local equivalent
aka
2018-05-09 15:20
yep
aka
2018-05-09 15:21
i hate cfc
jase
2018-05-09 15:21
The "grey area" answer is, there's online/shared company ownership register.
aka
2018-05-09 15:21
well
aka
2018-05-09 15:21
i understand
aka
2018-05-09 15:21
hard to live in a grey area for a few years though
jase
2018-05-09 15:21
agreed
aka
2018-05-09 15:22
well, gonna continue paying my 19% tax
aka
2018-05-09 15:22
i guess
aka
2018-05-09 15:22
on whatever 'profits' i have
jase
2018-05-09 15:22
could be much worse
aka
2018-05-09 15:22
i know, i've seen portugal taxes first hand
jase
2018-05-09 15:22
can you be a non-dom resident?
aka
2018-05-09 15:22
where? in uk or portugal?
jase
2018-05-09 15:23
UK
aka
2018-05-09 15:23
well, not really... i spend too much time here
jase
2018-05-09 15:23
can you change that?
aka
2018-05-09 15:23
hard because most clients that pay well
aka
2018-05-09 15:23
dont really care about nomads
aka
2018-05-09 15:23
and need someone to sit in their office, and talk on slack all day in chats like these
jase
2018-05-09 15:24
fair call
aka
2018-05-09 15:24
its definitely stupid
aka
2018-05-09 15:24
but some guys think their startup requires the same level of security as a bank
aka
2018-05-09 15:24
so either onsite, or nothing
ibbyazam
2018-05-10 07:51
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aka
2018-05-10 12:21
yes, i do..
vinodgn0088
2018-05-10 13:02
@jase, hows your life in Andorra. Is it possible to live there without knowing Catalan, French or Spanish? I read your blog posts and understand that you are holding Category D visa. How much is the approximate costs for running the company ( Like annual returns, accounting etc). Also, is it possible to use home address as company's address as well?
jase
2018-05-10 13:04
@vinodgn0088 I barely speak Catalan, know about 50 Spanish words and no French outside of the odd joke word. It's fine.
jase
2018-05-10 13:04
Estimated operating costs per year are around 1500eur. I have heard of cheaper but haven't bothered to shop around. If you have loads of bills to account for maybe that cost is higher.
jase
2018-05-10 13:05
Home office is 100% fine. I dare say it is the norm.
vinodgn0088
2018-05-10 13:06
@jase, Is there any multilingual accounting software where I can enter the invoices to system and the accountant do rest of things. How many days a year you plan to spend in Andorra. I heard that there are regular police checks to make sure company is active.
jase
2018-05-10 13:07
I believe there is a local accounting system but I use Xero.
jase
2018-05-10 13:07
I spend most of my time here so have no concerns about being away too long.
aka
2018-05-10 13:08
do you travel much? or andorra is enough for what you do]
vinodgn0088
2018-05-10 13:08
@jase, So your local support/accountant is able to work with xero?
jase
2018-05-10 13:08
I don't travel as much as I used to.. around 3 months of the year I am not here
aka
2018-05-10 13:09
do you go much to barcelona or anything else?
aka
2018-05-10 13:09
as in local travel
jase
2018-05-10 13:12
Yeah I head to BCN every so often. Nothing consistent, just for events or to see friends or when I am bored or the weather sucks
jase
2018-05-10 13:13
Police checks only seem to happen while renewing residency
jase
2018-05-10 13:13
I have been told they have 2 police officers to check all foreign residentd
jase
2018-05-10 13:14
But I guess they could check your electricity or internet usage
jase
2018-05-10 13:14
From what I have been told French and Spanish citizens are their biggest concern
vinodgn0088
2018-05-10 13:23
@jase, how about the cost of living and medicals. Do you pay the social security fees? Does the doctors speak English?
jase
2018-05-10 13:27
Cost of living on my blog. Government medical is free. Doctors are excellent and cheap.
jase
2018-05-10 13:27
English is easy for skilled professionals
aka
2018-05-10 13:27
worthy for medical tourism?
aka
2018-05-10 13:27
or not really?
maxsuur
2018-05-10 21:40
Not a good idea for a Spaniard to go live in Andorra.
jase
2018-05-11 12:11
Fine so long as they intend on living there.
jase
2018-05-11 12:11
There are probably better places. Everyone says Thailand is amazing.
jase
2018-05-11 12:12
My wife and I had a kid here, cost us $0
roman
2018-05-11 12:28
How?s the community in Andorra? Are there any expats? How about tech culture? Or any interesting meet ups?
roman
2018-05-11 12:28
Are locals friendly? Can you make friends?
jase
2018-05-11 12:45
It's a sleepy place, but a good amount of English speaking expats. Probably 1/3 of them are pro athletes. 1/3 are wealthy British. 1/3 tech/marketing.
jase
2018-05-11 12:46
Some meet ups, I'm currently trying to encourage it, but the Startup Grind community are working their way in now.
jase
2018-05-11 12:46
Overall a friendly place. Most of my friends are from Catalunya, a couple from France, the rest UK/US.
jase
2018-05-11 12:47
Not many normal expats here. Most people I meet are interesting/high quality.
jase
2018-05-11 12:47
Almost everyone more successful than me :thinking_face: :sob:
aka
2018-05-11 13:30
sounds like some paradise
jase
2018-05-11 16:02
Is to me. To others it's a backwater - not busy enough.
roman
2018-05-11 19:12
Interesting! I?ve been passively looking for a new place to live. My top pick was Portugal so far. But Andorra sounds awesome too. And I can still easily hit south of Portugal during winter months :)
roman
2018-05-11 19:13
How difficult is it to get PR via corporate route?
roman
2018-05-11 19:15
Thailand is amazing. But I feel like it gets less amazing as you get older. Especially when you have family. I still love it. It?s is really a unique melting pot. But I don?t think I could live there permanently.
roman
2018-05-11 19:16
I?ve spent cumulatively close to 2y there on 4 occasions.
roman
2018-05-11 19:16
But it?s def worth an extended visit. And more than once.
jase
2018-05-11 20:13
@roman not difficult - some bureaucracy for sure, but I have to say, the government is pretty great to deal with.
jase
2018-05-11 20:13
I'd think it is simpler than Portugal.
jase
2018-05-11 20:13
Something to note - PR isn't a thing. For the residency program I am on, you get 1 year, then 2, 2, 2, then 10 years.
roman
2018-05-11 20:14
Well, Portugal requires a huge investment upfront. Unless you go via some job-route (e.g. tech industry).
jase
2018-05-11 20:14
How much?
roman
2018-05-11 20:14
I think it was EUR$500K
jase
2018-05-11 20:14
wow
roman
2018-05-11 20:14
And I?ve heard they were to up it.
roman
2018-05-11 20:14
But you can invest in real estate.
roman
2018-05-11 20:14
It?s not money lost.
jase
2018-05-11 20:15
Andorra has 2 programs - one is EUR50k government bond + company incorporation. The other is just company incorporation, but there's talks of a EUR30k bond.
roman
2018-05-11 20:15
And you get a number of years tax-free I believe. So overall, if I had $500K, it?d be a great deal I think.
jase
2018-05-11 20:15
I always feel the tax numbers are headline makers, but not the real truth.
jase
2018-05-11 20:15
I'm sure there are plenty of people paying 0% tax in Andorra
roman
2018-05-11 20:16
I am more interested in incorporation. I am already incorporated in Canada. So would be relatively easy to just transfer it all over.
roman
2018-05-11 20:16
Right now I am just freelancing, and just have clients paying my corporation, then I am paying myself salary/dividents.
roman
2018-05-11 20:16
I love the fact that andorra recognizes this as doesn?t double-tax.
roman
2018-05-11 20:17
As opposed to Canada, who just tightened up rules once again this year.
roman
2018-05-11 20:17
And made it more difficult for service professionals to operate corporations.
thy
2018-05-12 08:35
How they are paying 0% tax in Andorra? Any special schemes or below all relevant brackets?
jase
2018-05-12 13:09
Like any tax system there are ways to legally pay little/low tax, and also illegal ways. Andorra's tax code has a lot of loopholes so some use this to the full extent they can.
jase
2018-05-12 13:10
Income up to 24000EUR is exempt - consider a family of 4 who all "earn" 24k
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2018-05-16 03:57
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2018-05-18 00:24
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2018-05-20 07:29
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2018-05-22 00:08
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2018-05-25 18:33
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benjamin
2018-05-28 00:43
@jase Hey mate, would travelling to Barcelona weekly/monthly ruin things when trying to look like you've set up Shop in Andorra permanently? Would Australia see you as a constant traveler as you're technically going to multiple countries constantly. I love the idea of calling Andorra home with its easy access to a big city.
Whats the border crossing like? Is it a strict border with passport stamps or can you get to Barcelona without it officially on the record?
jase
2018-05-28 06:32
Travelling to? No. Living in? Maybe.
jase
2018-05-28 06:33
Border crossing is a formality as far as immigration goes - no stamps. If you're on a bus they'll check your passport but not stamp it unless you asked. If you are in a car with Andorran plates it's unlikely you'll be stopped.
jase
2018-05-28 06:38
You're potentially asking 3 questions in 1 really:
1. Can you have tax residency in Andorra and spend a lot of your time in Spain without Australia knowing? Yes, if you have your permanent place of abode in Andorra and rarely visit Australia it should be fine (but not something I condone)
2. Can you have tax residency in Andorra and spend less than your required time in the country without Andorra knowing? No, probably not. They keep records of passport numbers coming in/out via buses and check car registration plates across the borders.
3. Can you have tax residency in Andorra but spend most of your time in Spain? Maybe. I don't like the exposure to tax systems of other countries so I wouldn't risk it, but there are some things you can do to lower the risk. I know many will take the "non toll routes" to BCN as the toll logs number plates. Depends on your level of risk/paranoia I guess.
jase
2018-05-28 06:38
@benjamin
benjamin
2018-05-28 06:50
@jase Nailed it. Great answer. Thanks.
If I could convince the wife, I think Andorra would be a great option (if we liked it there) I think I'm similar to you in regards to not needing a big city constantly, but my wife loves the city so Andorra could be a happy medium. Maybe I'll plan a trip there in the next 12 months and see if I can convince her.
At this stage I can't get her out of Sydney, but our last trip she absolutely loved Barcelona, so there's a chance haha. I'm getting tired of living in one of the most expensive cities in the world and losing 30%+ of my income to the tax man.
My HK entity set up is basically worthless now that I'm full time in Australia with no "real" office or staff in HK.
jase
2018-05-28 06:51
Yeah CFC law will screw you over there
jase
2018-05-28 06:51
To give you some comparison - I used to live in Whistler in BC, Canada
jase
2018-05-28 06:51
It's ~2 hours from the airport
jase
2018-05-28 06:51
Lots of environment around and has that community vibe
jase
2018-05-28 06:51
But also 1.5-2 hours to a major city - Vancouver
jase
2018-05-28 06:52
The Andorra/Barcelona scenario is to me, comparable, just with a European vibe of course
benjamin
2018-05-28 07:17
Ah nice. Canada is another place I've never been. I'm keen for anything fairly quiet with lots of nature. Concrete jungles no longer interest me. I also love the sun though and avoid the cold at all costs. Which makes a lot of attractive destinations a little more difficult.
I just had a look at your blog. Great read!
jase
2018-05-28 07:54
There's a fairly strong community here of both people who spend a lot of time on the Catalonia coast (and islands) and Portugal. If they don't like skiing they leave for the winters, though thankfully the winters here are shorter/more forgiving than Canada.
benjamin
2018-05-29 00:20
Sounds perfect to me. You've found a gem
jase
2018-05-29 08:53
I'm not convinced perfect exists, but I feel this is about as close as it gets for me/my family
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2018-05-30 11:28
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2018-06-04 10:33
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2018-06-04 14:02
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2018-06-12 11:51
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2018-06-13 04:36
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sanderkocken
2018-06-13 11:12
Hi Everyone, I'm new to this Slack. I'm currently living in Bangkok, Thailand and have established my tax residency here for the last 3 years. I have a UK LLP and am planning to keep my situation as it is now, but have a few questions that might affect me later on. Thailand currently has no CFC laws. I don't see that changing anytime soon, but I am a bit confused if LLP's are affected by CFC laws in case I move to another country with CFC laws in place. Since the income is usually taxed directly as personal income tax this wouldn't make much sense to me.
sanderkocken
2018-06-13 11:18
Secondly, as I am familiar with the 183 day treaties, are there any more criteria involved in case I would decide to live in other countries temporarily (less than 183 days per country)? I am employed in Thailand for my work permit and visa and have no economic ties to my homecountry whatsoever. Would an employment contract and monthly Thai income suffice as economic tie to maintain my tax residency in Thailand, rather than my homecountry, the Netherlands (when staying less then 183 days a year in Thailand)?
vinodgn0088
2018-06-13 11:27
@sanderkocken, let me ask few things.
sanderkocken
2018-06-13 11:36
@vinodgn0088 sure!
vinodgn0088
2018-06-13 11:36
1) If its a trading or service business, where you keep the profits generated by your UK LLP? 2) Usually the bank holding your profits will report your accounts to both Netherlands and Thailand. What will be your answer to tax department about profits of your UK LLP and where it is taxed. 3) Unless you prove that your LLP is being taxes somewhere, red flags will pop up as you are effectively operating the business from Thailand and not paying taxes there. About the special rules in Thailand regarding remittance of earnings after 1 year. In this case they are expecting that you are earning income abroad which could be liable to tax in abroad or the country of business have zero corporate tax or personal tax and possibility to get a tax residency certificate ( I am not talking about a Belize IBC).
vinodgn0088
2018-06-13 11:38
Now days Nomands are simply ignoring the fact that "place of effective management of company" plays a vital role. Its much more that CFC and Tier1/Tier2 countries are looking for ways to tax their citizens
sanderkocken
2018-06-13 11:53
@vinodgn0088 Ok so elaborate a bit further: (1) Since my profits are still moderate, I keep them on my Revolut account. (2) I get my income through an invoicing construction where the LLP invoices a Thai company that pays me a salary. The remainder is held on my personal Revolut account. Am I right to assume that if I remit an additional amount into Thailand every month from the LLP and pay tax on that amount in Thailand, the LLP would have been ''taxed'' in Thailand? Or are you suggesting that an LLP only works with a business established in a country with zero corporate nor personal income tax?
vinodgn0088
2018-06-13 12:00
@sanderkocken, Basically Your LLP earns profit and part of it is remitted to thai company and the thai company pays you salary after deducting their commission. Until this part is fine.
vinodgn0088
2018-06-13 12:03
Issue is with the funds left on LLP. Basically the funds are taxable in Thailand. But there is another problem. Does the work permit you hold allow you to work as self employed in parallel ? If that the case, you can remit the profit to Thailand and pay taxes legally. But in this case you will be paying more taxes. But one advantage here you have is revolt don't report like banks.
vinodgn0088
2018-06-13 12:04
If your profits are not high its better. You don't spend the thai salary. You keep it as savings and use revolt card to withdraw money when you go abroad for tour. Then use than money to spend in Thailand
vinodgn0088
2018-06-13 12:06
Otherwise your option is to have a category B visa in Andorra and spend 90 days in Andorra and remaining in Asia
vinodgn0088
2018-06-13 12:06
But that will require you to have a small office in Andorra and a staff. This is recomended only if you are making a decent income.
vinodgn0088
2018-06-13 12:07
HK company also will do the job if you have a HK staff ( office manager) and pay corporate taxes 8.5% now for first slab. Then pay dividend to you
sanderkocken
2018-06-13 12:16
I'm hired as independent consultant. All the work I do for the Thai company are outsourced by the LLP to the Thai company, and thus, directly outsourced to me. So in principle, all activities I do can be justified. What would be the case if I don't remit the full profits to Thailand? Since the remittance system allows no taxation in when its not remitted in the same year?
vinodgn0088
2018-06-13 12:18
My question is. Does the LLP have a legal stand of its own? Aren't you the effective controller of LLP? How can LLP get a contract and outsource it to thai company without your involvement?
sanderkocken
2018-06-13 12:19
That would be more a visa issue rather than a tax issue, right?
vinodgn0088
2018-06-13 12:19
Can you tell me who are the share holders
vinodgn0088
2018-06-13 12:19
of LLP
vinodgn0088
2018-06-13 12:20
and whats name of the manager appointed to LLP
sanderkocken
2018-06-13 12:20
Myself at 99% and a Thai National at 1%
vinodgn0088
2018-06-13 12:21
Okay. Is there any position called manager in LLP or Just share holder partners who both have duties
sanderkocken
2018-06-13 12:23
I believe the latter one
vinodgn0088
2018-06-13 12:24
In short both you and Thai national are residing in Thailand and one of you is actually talking ( or finding clients) and the work is passed to another thai company and thai company hires you to do the actual work for client of LLP
vinodgn0088
2018-06-13 12:26
Doing a work is different and management is different. Say a thai incorporated company ( Say company A) is getting work from same client as yours and out sourcing it to another thai company (company B).
vinodgn0088
2018-06-13 12:26
Then any profit generated by Company A is taxable in Thailand.
sanderkocken
2018-06-13 12:27
I hear you, but why would that be the case, since there are no CFC laws in Thailand?
vinodgn0088
2018-06-13 12:27
In that case if you just register company abroad, how can you not pay taxes. If that was the case, all the thai companys can do the same right?
sanderkocken
2018-06-13 12:28
Obviously in a regular case I would not be allowed to have Thai clients
vinodgn0088
2018-06-13 12:28
Man CFC is a share holder thing only. Management of a company is different. Many argue that LLP don't have a corporate taxation. Thats right but you are liable to personal tax for whole case
vinodgn0088
2018-06-13 12:29
vinodgn0088
2018-06-13 12:30
Check Basis of taxation. Even if you don't register your LLP with Thai registry, its still liable to tax
vinodgn0088
2018-06-13 12:30
You case is quite simple. You need to change the ownership of LLP, then you may continue as is
sanderkocken
2018-06-13 12:31
Change it to a company that is taxed on a corporate level?
sanderkocken
2018-06-13 12:31
as majority share holder?
vinodgn0088
2018-06-13 12:33
The only thing you need to make sure that the share holder is not resident of Netherlands or Thailand.
vinodgn0088
2018-06-13 12:34
Or more simple for now is, just make sure that LLPs annual profit is zero.
sanderkocken
2018-06-13 12:41
But I am wondering, why would this affect a LLP, which is taxed on a personal level. And the basis taxation of personal level refers to the remittance system.
sanderkocken
2018-06-13 12:43
Don't get me wrong, I'm not trying to argue you here. It's just that if you're correct a lot of information provided to me by freedom surfer is quite confusing, since I explained my situation before incorporating
vinodgn0088
2018-06-13 13:17
I am not arguing either. I asked about Simons setup too and I am not fully convinced. May HK tax department said ok just becuase he is travelling a lot and HK is following a territorial taxation. Since he don't have a HK client the tax department might let it go.
vinodgn0088
2018-06-13 13:19
Whereas Thailand it not following a territorial taxation. We all know that there are many thai nationals who also provide services to abroad companies. If setting up a UK LLP gives them option to pay no taxes at all, why they are not doing it.
vinodgn0088
2018-06-13 13:19
Mate you need to know difference between CFC and Place of management thing
vinodgn0088
2018-06-13 13:20
Consider an example. Your UK LLP is holding two properties in Netherlands and gaining rent from there. Where will be the taxes?
vinodgn0088
2018-06-13 13:22
Dutch will claim taxes as income is generated from Netherlands. Then UK LLP don't have any taxes of its own. And when you get the income in your hands after 1 year its tax free in Thailand
vinodgn0088
2018-06-13 13:24
If you have a passive income or able to prove that what you get as income is taxed somewhere then its alright
vinodgn0088
2018-06-13 13:24
Now to the CFC things
vinodgn0088
2018-06-13 13:25
Say you have a Cyprus company share holding 25%. The company is having a office in Cyprus, have staffs and have resident directors
vinodgn0088
2018-06-13 13:26
If you get a dividend you are technically required to pay personal taxes. But in this situation if you use a holding company, you can avoid personal tax
vinodgn0088
2018-06-13 13:26
Thats why they introduced CFC
vinodgn0088
2018-06-13 13:27
They want to tax you even if you indirectly generate passive income
vinodgn0088
2018-06-13 13:44
check Avoidance of double taxation
Example 3
simon
2018-06-13 13:49
@vinodgn0088 Just to clarify regarding your post about my situation, if you work for less than 60 days per tax year within the territory of Hong Kong you are granted an exempted from paying salary tax for both your Hong Kong and foreign-sourced income. Capital gains and profits not derived from Hong Kong are also exempted. This is one of the greatest benefits of Hong Kong residency (that and being able to qualify based on ties).
vinodgn0088
2018-06-13 13:49
Which means you are travelling all time and claiming residency based on your ties to HK (not based on 183 days + stay)
simon
2018-06-13 13:50
As for LLP taxation, the company itself does not exist for tax purposes. Any attributed profits is taxed at the partner level, usually as if it had been earned directly by the partner. You need to review the tax treaties in place as well as the policies of each country involved to determine what needs to be paid and where.
simon
2018-06-13 13:50
@vinodgn0088 Yes
vinodgn0088
2018-06-13 13:50
That's why you are safe.
vinodgn0088
2018-06-13 13:50
But here Sander is not playing safe
simon
2018-06-13 13:51
The part that isn't safe is not paying taxes on all attributed profits (the money left in the company account).
vinodgn0088
2018-06-13 13:51
But could also face a problem if you have a family and home in your citizenship country (Canada)
vinodgn0088
2018-06-13 13:52
Yes exactly. For now Sander need to make sure LLP got a bank account and end of year profit is zero for LLP
vinodgn0088
2018-06-13 13:53
This is very crucial as both Sander and the thai national is living in Thailand now and both stay 183+ days
sanderkocken
2018-06-13 16:00
Thank you for the explanation. I just reread everything and reassessed my current structure. What's now unclear to me is how the remittence system works. I'm aware of many nomads using a HK company structure while living in Thailand while only remitting profits into the country after the calendar year. If I'm understanding you correctly that is not possible with my current LLP because both shareholders are Thai residents. But what if I pay myself a salary (aside of the invoice amount to the Thai company) and don't remit the salary amount into Thailand in the same calendar year?
sanderkocken
2018-06-13 16:04
And would it make a difference if I change the allocation of shares and make (for example) an Estonian company the majority shareholder, whereafter I pay taxes over dividends in Estonia. Would those dividends be tax exempted in Thailand if not remitted into Thailand within the same year?
vinodgn0088
2018-06-14 00:46
I think its better you setup an Estonian company with two share holders. One is you with personal residency in Thailand. Other should be someone from your family in Netherlands. Give them a 5% share and give membership to director's title as well. For bank account setup such a way that outgoing payments will require approval of both directors. Now both of you meet up in Estonia 3-4 times and execute some sort of company meeting and record its in minutes. And you can build up the profits in Estonian company without profit distribution or tax. This way you have better stand in front of tax department from Netherlands and Thailand as Estonian company itself is tax resident in Estonia because of registration. Place of effective management cant be in Netherlands or Thailand because decisions are executed with two approvals and you are indeed conducting meetings in Estonia. On top of this all works are outsourced to Thai company which hires you.
vinodgn0088
2018-06-14 00:50
Also, may nomads doing something doesn't mean that they are doing legal or in right way. Please ask them and find out how many of them can get a corporate tax residency certificate from HK tax department.
simon
2018-06-14 02:23
Regarding HK, @vinodgn0088 is right. The IRD now rarely issues residency certificates without proof of a local presence.
As for your situation, why not simply appoint an additional company as the third partner in your LLP? This gives you the same benefits @vinodgn0088 outlined but without having to deal with many of the consequences of running such a company (to use the Estonian example, no Stripe, no PayPal Pro, fewer banking options and most of them are of very poor quality, monthly returns if you pay salaries, crazy 50%+ fringe benefits tax etc).
vinodgn0088
2018-06-14 03:22
@simon, Yes, Estonian banking options are limited but LHV is still accepting clients. And for day to day usage Sander can use Revolt or Paysera. Paysera do have credit card processing gateway and gives unique IBAN too. Even if he add a corporate share holder to his UK LLP, he is still evading taxes. Because the corporate share holder is still owned by Sander. Then again both corporate share holder company and LLP is effectively getting managed from Thailand. In legal view the setup is still not perfect. However there is a fact that whether Thailand care about this or not. If Sander is making moderate profits only then most likely Thailand won't bother about it. But this doesn't mean that Netherlands won't ask taxes when he return to NL and move funds from UK LLP to his personal bank account.
johncitizen
2018-06-14 03:31
My Swedbank account is still good. I want to pay up share capital soon to keep things in good standing with them.
johncitizen
2018-06-14 03:31
I Guess I just got lucky.
simon
2018-06-14 04:12
@vinodgn0088 I have accounts with both LHV and Swedbank and the quality of the services is definitely not on par with places like HK and UK.
Regarding the holding company, I never mentioned how it should be structured. I simply said that it makes a lot of sense to continue using the LLP as the front facing business as business services in Estonia are a lot more limited than they are in the UK not to mention the fact that almost no one in Asia has even heard of Estonia.
As for taxation, his best bet will still be to attribute himself only a modest profit from the LLP. This can be achieved by diverting them to a holding company as mentioned above (to take advantage of the Thai remittance system) or by increasing expenses (so that there is effectively very little profits).
simon
2018-06-14 04:17
Obviously, the profits attributed to him are likely to be taxable where he lives. The profits attributed to the other partners, however, will be taxed depending on their own circumstances.
sanderkocken
2018-06-14 05:08
I really appreciate these insights from both of you. My original thought was when setting up the LLP was that as long as I don't remit the salary into Thailand within the same calendar year and make sure overheads are high (through outsourcing it to Thailand) so there are no profits in the company by the end of the year, it's covered. Turns out I was a bit naive on that. I agree with @simon that the LLP is beneficial in the way that it's trusted and provide me one of the most extensive options in terms of payment gateways. As my business focusses mainly on the US and Canada i think this is certainly important. For now, it seems like an option to pay taxes on nearly the full amount through the outsourcing company on a personal level and make sure profits remain zero. However, as I obviously want to increase profits its not ideal to have it all taxed and remitted into Thailand. So what would be a way to add an additional company to the LLP and make sure I can either get it taxed somewhere else or to make use of Thailand's remittance system.
vinodgn0088
2018-06-14 06:09
@ Sander, Adding a corporate shareholder won't hide your identity. By UK law you are required to fill your name in PSC register ( name of owners who ultimately own more than 25% of the LLP or UK LTD). So, better not add any IBCs as share holder. If you add Estonian company as share holder and you live in Thailand, you are actually managing it from Thailand. Your options are 1) Just keep funds in EMIs like Revoult and use Estonian company as share holder. Not perfect legal setup, but safe enough if you don't do millions in sales or 2) Move to a low tax country, setup a back-end company, pull profits of UK LLP to this back-end company and stay there 183 days every year and spend rest of days in Thailand or Asia as you like.
simon
2018-06-14 06:12
@vinodgn0088 I don't think he is trying to hide his identity. Besides, it's already publicly available on the UK register.
vinodgn0088
2018-06-14 06:13
@simon, Diverting the profits to a holding company is ok. But what about tax residency of Holding company? If its getting taxed somewhere then its fine, else legally Sander need to register it with Thai authorities and pay corporate taxes ( No clue about registration, immigration etc).
vinodgn0088
2018-06-14 06:14
@simon, I know he is not trying to hide his identity. However, have a look at tax wise. If his details are publicly available anyone can get idea that corporate share holder is just a dummy.
simon
2018-06-14 06:54
@vinodgn0088 The profits attributed to the holding company, which were generated through the Thai permanent establishment of said company, will likely be taxable in Thailand. There's no miracle to be made here. The non-Thai profits (if there is any), however, will fall under Estonia's jurisdiction. The Thai-Estonia treaty is quite clear on that.
vinodgn0088
2018-06-14 07:06
@simon, For me Its pretty clear from beginning itself that all profits generated through UK LLP is clearly taxable in Thailand. But he just simply can't transfer funds directly to Thailand ( he needs to do it through the thai company which employs him). I am believe so because he is on a work permit which don't have option for self employment.
vinodgn0088
2018-06-14 07:07
@sanderkocken, I hope its clear now.
simon
2018-06-14 07:12
@vinodgn0088 Just to clarify, the LLP itself is not resident of Thailand nor does it owe any Thai taxes. It is the partners, being all Thai residents, who owe the relevant Thai taxes on their worldwide income.
sanderkocken
2018-06-14 07:23
So to conclude, legally seen Thailand isn't an attractive tax residency for those who have a company abroad, unless you can prove the management is done outside Thailand
sanderkocken
2018-06-14 07:24
And the remittance system isn't relevant to that in any way, since in practice, the business is operated from Thailand en thus, it's not foreign income
simon
2018-06-14 07:28
The remittance system is useful primarily for passive income. It is very hard to take advantage of it in the context of an actively run business where the entire operation is in Thailand (due to the income being locally-sourced as you have correctly deduced).
sanderkocken
2018-06-14 07:36
Ok, so in theory my options are limited to (1) seek tax friendly residency in a jurisdiction that is either territorial or easy to establish a local branch (2) keep my profits at zero, use LLP as front facing business while paying tax on a personal level through the outsourcing company, (3) connect a company as shareholder and proof that that company is either managed outside Thailand or keep the funds of (for example) an Estonian company on a EMI. In that case I can keep the profits in an Estonian company, pay zero tax until distributed and distribute them later on by getting temporary residency in a territorial tax country.
sanderkocken
2018-06-14 07:38
Because dividends are not passive income either, an therefore also subject to Thai taxation
simon
2018-06-14 07:49
Option (1) is obviously ideal from a tax perspective. Everything becomes very easy when you live and work in a country which does not have an income tax (or where you are exempted from it like I am). Option (2) can also work well if you can keep your profits near zero (no profits = no taxes regardless of the residency situation). Option (3) involves more complexity and may still result in some of your profits being taxed (Estonia may tax your dividends for example).
sanderkocken
2018-06-14 08:01
Right, thanks both of you for thinking with me. Will start exploring my options!
sanderkocken
2018-06-14 08:02
It might be useful for others btw to update this section on the website @simon: Thailand ? (Tax highlights)
Thailand is, for all intent and purposes, a territorial taxation country. Income generated abroad by residents is not subject to local taxation unless it is repatriated during the same tax year. Becoming a resident is very easy, even for those with no business or job. Thailand is also a very nice place to live in, thanks to year-round warm weather, a fantastic cuisine, world-class entertainment and a very good infrastructure (in Bangkok).
simon
2018-06-14 08:28
I will add clarification as to what "Income generated abroad" means, thanks for the feedback.
michael
2018-06-14 13:56
Good luck @sanderkocken
vinodgn0088
2018-06-15 01:30
@sanderkocken, I think there is a small trick to tackle your situation. Lets consider following example. Say you have 10000 EUR left on 30-Dec-2018. Ask your thai company to issue an invoice for the same amount on 31-Dec-2018. Which means your LLP's profit will effectively become zero as you have outstanding liability. Then on first week of Jan 2019 ask Thai company to cancel the invoice. Now, you have 10000 EUR profit for FY2019. Just repeat the same setups every year and legally you are not liable to taxes. But there is a catch. Thau company needs to agree with this and they need to report this under their corporate tax returns ( So, they might need to pay tax first and get effective tax reduced on next year). @simon whats you thought?
mikeseo
2018-06-15 03:22
why does it need to be set up so carefully? Why not just have a US LLC/bank and not report the money to NL/TH? Is the problem that NL requires paying taxes somewhere else? Just being a non-resident isn't good enough? Or do you have to prove taxes were paid if you move back to NL?
vinodgn0088
2018-06-15 05:44
@mikeseo, Isn't better that he do everything right upfront than regretting later. Say he plan to move back to NL after 10 yrs and he transfer all the saving in Thai bank account to NL bank account. There is a high chance that NL tax department will ask him to prove the source of money. Who knows what will be the rules after few years. If he proves that every single penny he have is already tax paid and legal, then its easy. Or what if Thailand also start to crack down these hidden funds (based on CRS infos)? Few years back it was very easy to do visa runs to Thailand but today its different. Similarly the taxation system can or will change in coming years.
jpatmon
2018-06-15 06:03
has joined #taxation-personal
simon
2018-06-15 13:35
@vinodgn0088 A safe way to do this would be to prepay a business trip (maybe a few) but using only fully refundable business class tickets / hotels. A few months after the current tax year is over, the trip can be cancelled and everything refunded. Obviously, you need to take that into account during the following tax year and I would not recommend abusing this technique but for small amounts it should work fine.
sanderkocken
2018-06-16 07:31
Thanks again for thinking with me. Interesting workarounds, but maybe not ideal for the long term. As @vinodgn0088 already suggested its better to do everything right upfront. After being employed in Thailand for over 3 years I just started out to starting up for myself. For the amounts I earn now it's still acceptable tax-wise to invoice everything through the Thai company. The challenge for me is not to live tax free. I'm just not keen to have all my income in THB and would like to store funds in USD or EUR in foreign accounts (and when required, be able to pay tax over that). Thanks to your advice I got a much clearer understanding on how these tax laws work and that there is a lot of incompliance (and incorrect advise) among the nomad community residing more than 183 days in Thailand.
sanderkocken
2018-06-16 07:32
As I was rereading everything you guys advised, I wondered if the income generated while NOT residing in Thailand would be considered foreign income (and thus exempt when not remitted within the same calendar year) Let's say I work 183+ days in Thailand and the remaining days as ''nomad'' outside Thailand. I get paid salary as usual by the Thai company for 12 months, but additionally I distribute remaining profits from the LLP to my personal account (only in the months when abroad) for services performed. Would this fix the situation?
sanderkocken
2018-06-16 07:34
Obviously i would still need to make sure the profits and the end of the year remain 0.
michael
2018-06-16 11:17
Realised by full message didn't send when I said good luck.
michael
2018-06-16 11:18
It's good to gather information online and from communities. Make sure you talk to a tax advisor (or a couple ideally).
michael
2018-06-16 11:18
And yes, I agree, it's being about financially and tax efficient.
vs301991
2018-06-16 18:12
+1
Can anyone who's into amazon business share their views on this?
vinodgn0088
2018-06-17 01:40
@vs301991 My views are 1) If there is US clients then US sales tax will definitely apply and LLC need to collect sales tax and pay to tax department. Its better to keep your items only in one warehouse and follow sales tax rate of particular state. 2) Technically speaking you are not liable to pay profits/corporate tax to US.But what I heard is that US see your LLC as a ECI and therefore income tax on profits generated from US sales. I would strongly recommend contacting a US tax lawyer and local tax lawyer (country of residence) to find out accurate answer.
vinodgn0088
2018-06-17 01:44
@mikeseo, Used his services before?
mikeseo
2018-06-17 02:32
ya he does my US taxes for the past few years
vs301991
2018-06-17 11:16
@mikeseo Thanks I read his other article while explains everything in detail. http://ustax.bz/non-us-entrepreneurs/
vs301991
2018-06-17 11:56
Yes, that seems in line with the information I've gathered so far. Thanks
vintilamarius89
2018-06-27 12:04
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vinodgn0088
2018-06-28 10:15
Consider that I have a Cyprus company and it is tax resident there. The first year accounts (FY2017) are ready and there is a profit of 15000 EUR (after corporate tax). But I don't want to take a dividend for now and the profit is moved to retained earnings on FY2018 accounts. Imagine that I keep accumulating profits and after 10 years ( FY2027) I moved my personal residency to UAE or a low tax country. Can I declare dividends for the period FY2017 to FY2026 and pull out the profits without suffering any tax at personal level? Usually dividends are declared on same financial year as interim dividends or next financial year as Final dividends. Never heard someone declaring after several years. Any ideas?
mikeseo
2018-06-28 10:37
I think you can pay dividends from retained profits from previous years but I'm not sure. https://community.quickfile.co.uk/t/can-i-declare-a-dividend-from-a-previous-years-profit/11828/2
mikeseo
2018-06-28 10:38
Dividends can only be paid out of retained profits. Retained profits are the funds remaining after all liabilities and expenses have been taken into account. If you have undistributed profits remaining on the balance sheet from previous financial years, this sum can be added to the current level of retained profit.
https://www.companybug.com/guide-to-illegal-dividends-and-how-to-avoid-them/
vinodgn0088
2018-06-28 11:01
@mikeseo, thanks for the links
henrik_fjerdingen
2018-06-28 17:01
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info
2018-06-28 18:35
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vs301991
2018-07-01 05:25
https://www.freedomsurfer.com/cloud/cfc.pdf
This link is coming out to be broken on website, can someone share this document that contains country wise CFC laws?
simon
2018-07-01 05:29
@simon uploaded a file: https://freedomsurfer.slack.com/files/U1CGE4FDX/FBGTEPK7V/cfc.pdf
2018-07-03 16:57
A file was commented on
hello
2018-07-03 19:32
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michal.opoka
2018-07-03 21:59
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curtayalex
2018-07-07 11:23
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matt077
2018-07-07 12:46
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will
2018-07-11 03:33
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thy
2018-07-11 19:20
Thank you Jase for your reply! It seems Andorra may be great residency option to consider in the future. There are also no cfc nor ?effective place of management? rules in Andorra, right?
jase
2018-07-12 20:03
I can't comment with 100% certainty as the tax laws are moving, but I doubt anyone is checking even if there are.
philhech7
2018-07-13 13:49
I'm a German, non-US resident who owns a Wyoming LLC that was founded in March 2018. It's registered as a pass-through entity. I just learned about FBAR and I am not sure if I already missed the April 30 deadline (I own some stock worth more than $10,000 outside US accounts). Is it already too late or do I have to file for the first time next year (as with form 5472)? I would appreciate if you can let me know what to do here.
mikeseo
2018-07-13 14:38
I believe the FBAR is just for US citizens
mikeseo
2018-07-13 14:38
probably US residents as well
mikeseo
2018-07-13 14:40
and if you were a US citizen/resident starting in 2018, than you file the fbar for your foreign accounts that you had in 2018 on April 2019.
philhech7
2018-07-14 12:37
thank you
julienduteurtre
2018-07-15 19:27
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kuka
2018-07-19 19:57
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vinodgn0088
2018-07-20 15:31
By default an Estonian company is considered tax resident in Estonia unless the company is tax resident of another country where it operates from a PE. Lets consider that a Estonian company is doing internet based business and two directors are actively involved in management of the company. Other than management ( actions on RIK, EMTA etc) one director manage sales and other director provide technical support to clients. Imagine that one director is tax resident in Portugal ( CFC rules won't apply as holding shares of another EU company) and other director is tax resident in India. Both directors hold e-residency cards and any action on RIK, Bank and EMTA are signed using e-residency card. So the so called directors meeting is not happening anywhere as its all digital and online ( i.e, difficult to decide where is the Place of effective management of the company is.) . In this situation, what are the chances that either Portugal or India can claim that Estonian company is tax resident in their country not Estonia.
colbybridges
2018-07-20 17:13
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bigworld
2018-07-20 17:52
In my opinion, the tasks they are carrying out are business, not management. Management is normally considered the big strategic decisions; I.e. the meeting of the board of directors. If they are attending the meeting remotely from Portugal and India, places of effective management are Portugal and India.
julienduteurtre
2018-07-20 21:36
@bigworld Right but if they are not making millions, it is very unlikely that any of those countries (India or Portugal) ask for anything, have you ever seen any case like this ?
bigworld
2018-07-20 22:19
@julienduteurtre agree, I can't see how any of these countries could present a case to Estonia with no permanent place of business in their countries. I.e. an open company office with a big sign.
Also, where vital interests are matter. For example, if company business is in South America, it is difficult to warrant that the company has permanent stablishment in India.
But having said that, what I said it's the way it works.
vinodgn0088
2018-07-21 02:11
@julienduteurtre and @bigworld thanks for your input. For this company, management tasks are limited. Like, submission of annual return, change of shares, change of registered address etc requires digital signatures of directors ( If M&AA says that all directors must approve it.). There won't be any big offices with sign boards either in India or Portugal
james
2018-07-24 09:26
has joined #taxation-personal
arthur.capard
2018-08-01 12:40
has joined #taxation-personal
rj22
2018-08-06 07:26
has joined #taxation-personal
monargent
2018-08-07 19:34
has joined #taxation-personal
monargent
2018-08-07 19:53
Hi everyone. Finally signed up to fs (after being a long time reader of Simon's excellent blog content). I wonder if any regulars here are tax resident in Portugal and on the NHR scheme? Wondering how you deal with BEPS/PE risks when setting up a foregin business (e.g. in Estonia) and using that to exclusively bill non-Portuguese residents for contracting work (in my case programming/IT services)? I can arrange for effective management (e.g. board meetings, contract signing etc.) to be done by Estonian directors but I'm worried this is not enough to escape BEPS/PE if it is actually me doing most of the day to day work (remotely in Portugal) for clients.
monargent
2018-08-07 19:58
My ideal setup would be to have a UK LLP as the beneficial owner of the Estonian company (so estonian company is only liable to 14% tax on profits paid to the LLP) and then to draw those profits down from my LLP to Portugal (using the NHR foreign source income provision so that no further tax is due in PT - since tax was already paid at source by the Estonian company). My only concern is that the PT taxman might deem the Estonian company has a PE in Portugal and thus the income derived from the company is not foreign source (potentially opening me up to a hefty tax bill).
monargent
2018-08-07 21:14
In summary: I'd love to know how what impact BEPS/Permanent Establishment legislation has wrt NHR and foreign source income (and how people in similar setups are dealing with this)?
julienduteurtre
2018-08-08 21:06
@monargent Why you don't just set up an LLC in Wyoming (Non-CRS) ?
monargent
2018-08-08 21:20
unclear what advantage a wyoming LLC would have over a UK LLC? Would a wyoming LLC meet NHR criteria that profits *could* be taxed at source (even if in reality they are not for non-tax resident partners)?
monargent
2018-08-08 21:20
will go read up on it (my knowledge of non-EU jurisdictions and tax regimes is limited)
monargent
2018-08-08 21:22
the interesting thing with UK LLCs is that they are tax transparent but also a body corporate at the same time (which would allow an effective CIT rate of 14% for wholly owned Estonian subsidiary)
monargent
2018-08-08 21:32
thanks for the recommendation Julien but I've just scanned https://www.strictlybusinesslawblog.com/2011/09/05/should-new-business-owners-set-up-their-business-as-a-wyoming-llc/ and can't immediately see any benefit over a UK LLC (for my particular situation)
julienduteurtre
2018-08-08 21:37
I missed the part that you want to live in Portugal..
Well as mentioned before Portugal has CFC rules so wherever you set up your company, if there is no substance in the country where it is incorporated (Offices, employees..) then your company will likely be taxed as a PT company.
monargent
2018-08-08 21:38
CFC reules dont apply for EU comapnies
monargent
2018-08-08 21:38
(or non EU if CIT is no less than 60% of what PT corp tax is)
monargent
2018-08-08 21:38
*rules
monargent
2018-08-08 21:38
effective management can also be gotten around
monargent
2018-08-08 21:39
PE is harder though
monargent
2018-08-08 21:39
and this is whats causing me issues :disappointed:
julienduteurtre
2018-08-08 22:16
To me all those countries with CFC are headaches, if they really want to prove that your company is tax resident of their country it won't takes much efforts.
And at the end of the day in most case the cost of having PE and Effective management done properly doesn't worth the efforts for small/med business.
julienduteurtre
2018-08-08 22:17
Are you really sure you want to live in PT :joy: ?
monargent
2018-08-08 22:28
alas these new PE rules are OECD wide
monargent
2018-08-08 22:28
global effort to clamp down on aggressive tax avoidance
monargent
2018-08-08 22:28
and yes, I want to live in PT :slightly_smiling_face: it's paradise compared to most other western EU countries (imho)
monargent
2018-08-09 00:29
the problem with NHR is that it's fantastic for passive income (pensions, dividends etc.)
monargent
2018-08-09 00:30
but not great for freelancers/contractors running active businesses (with majority of day to day work being done in Portugal)
otkeedca
2018-08-09 07:16
@monargent what is the strategy to get around "place of effective management" rules? It seems like this is the most difficult rule to get around
monargent
2018-08-09 14:41
@otkeedca it depends on your situation/business i guess as to how "easy" or not it is. But essentially: make sure majority of managers/directors are tax resident where the company is (or at least not tax resident where you are); hold all AGMs, board meetings etc. in the country where the company is registered; make sure majority of contracts are signed where the company is is based; have a record of some flights you take to head office (e.g. to attend management meetings)
monargent
2018-08-09 14:45
Permanent establishment is harder since the onus is on you to prove that the work you do for the company does not constitute a permanent establishment in the country where you are doing the work. It used to be easy to get around this by saying your work for the company was of a preparatory or auxiliary nature (and making sure that sales contracts etc. were not concluded in the country and that you had no local clients or offices). However, new PE rules are much stricter - even working from home for remote clients can trigger it.
monargent
2018-08-09 14:48
I guess the question is: do you decide the taxman will simply not be interested in applying PE to you if you are a freelancer or SME and are discreet (since it is resource intensive for them to prove you have a PE). The problem with this is you will always have the potential risk of a PE investigation hanging over your head.
julienduteurtre
2018-08-09 17:35
When I read this, the last thing I want would be to live in a country with such rules, because as we all know it will only get tougher and stricter as Europe get increasingly broke. Plus as I say earlier the cost of faking or complying with "Place of effective management" & "Permanent establishment" won't worth it in most cases except if you are a large business owner :confused:
monargent
2018-08-09 19:52
Agree. Unfortunately this is not solely an EU issue. This is the G20 and all OECD countries.
monargent
2018-08-09 19:54
The best solution for freelancers like me that can work for remote clients is to move to a place with a territorial tax system
monargent
2018-08-09 19:54
alas that's not presently an option for myself
monargent
2018-08-09 19:54
NHR is not all bad though - if I can't find a nice hack, my max exposire is still onyl 20%
monargent
2018-08-09 19:57
*exposure
monargent
2018-08-09 19:57
(plus 3.5% social charges)
vinodgn0088
2018-08-10 02:23
@monargent, PT Social tax is 29.6% /34.75% . Isn't it ?
monargent
2018-08-10 03:23
@vinodgn0088 sorry, I confused myself. There's a 3.5% "solidarity" tax added to your income tax rate once you earn above the minimum wage. So effective rate (under NHR) becomes 23.5% (on earnings above ~?7K)
monargent
2018-08-10 03:24
social charges are as you say. However, thanks to NHR you only have to pay this on the minimum wage of ?7K (meaning your annual contribution to social charges is about ?2.3K)
monargent
2018-08-10 03:25
that's assuming your income is all foreign source.
monargent
2018-08-10 03:26
I think any domestic source income would attract the full 29.6%/34.75%
vinodgn0088
2018-08-10 03:49
@monargent, I think 3.5% solidarity tax is no more.
monargent
2018-08-10 05:48
interesting. Have they abolished it this year?
jd
2018-08-12 02:50
Hoping someone has experience with W-8BEN-E forms? My brokerage account is requiring me to fill out one for a St Vincent and the Grenadines entity (used for investing my own funds).
Under Chapter 4, really unsure which FATCA status this would sit under?
jd
2018-08-12 02:57
I believe it would fall under a Non-Financial Foreign Entity
wimva
2018-08-14 20:59
has joined #taxation-personal
itaiohayon
2018-08-16 20:15
has joined #taxation-personal
nikolay
2018-08-18 15:38
Recently Stripe Atlas allows incorporating a Delaware LLC and not only a C-Corp.
We are pretty interested in this as we run a dropshipping business (now actually started stocking in a warehouse so moving away from Dropshipping) and sell mainly to the USA, Canada, Australia etc.
We are currently operating through an offshore company with a payment processor that fails/rejects a lot of our payments from customers as simply banks see as an oversea payment and not a local one.
Having a US Delaware LLC would make us eligible for a US Stripe which means local USA payments to us will almost never fail.
For banking we plan on having the bank account provided by Stripe but also Tranferwise Borderless.
First question is if we will own any tax in the USA - we won?t have any employees there.
Second question is if it would be better to have a Seychelles LTD own the Delaware LLC or an EU Citizen own it directly.
michal.opoka
2018-08-19 20:33
I also have a question about US tax - if I don't have any dependent people in US, but rent an office or other things which could constitute permanent establishment under OECD rules like physical server etc.. would I be considered engaged in trade or business in United States by the IRS? @nikolay 1) I think you shouldn't according to this https://ustax.bz/non-us-entrepreneurs/ 2) depends if your country has CFC or place of effective managements laws
nikolay
2018-08-19 20:36
2) Doesnt
nikolay
2018-08-19 20:36
Thanks for the site
nikolay
2018-08-19 20:36
Will take a look
michal.opoka
2018-08-19 20:38
@nikolay Then offshore company owning the LLC should be better since you can keep the profits untaxed, but check if your country won't introduce CFC law since EU ATAD directive could require it
nikolay
2018-08-19 20:51
Wasnt aware of ATAD and will definitely check it
nikolay
2018-08-19 20:52
Stripe atlas didnt have an option at all to have another company be the owner when signing up but I guess during the official formation that might be an option
michal.opoka
2018-08-19 20:56
I think you should check with your local tax lawyer to be sure, as for LLC there are hundreds of companies which could form LLC for you, but make sure to choose one which will help you fill form 5472 required by the IRS
michal.opoka
2018-08-19 20:57
also Wyoming or New Mexico might be better then Delaware
nikolay
2018-08-19 20:58
Stripe atlas does delaware llc or c corp only
nikolay
2018-08-19 20:59
You get a bank account and access to stripe
nikolay
2018-08-19 21:00
Which are both benefits
michal.opoka
2018-08-19 21:00
Simon here at Freedom Surfer can form Wyoming LLC https://www.freedomsurfer.com/wyoming-llc/
michal.opoka
2018-08-19 21:02
from what I've read US banks generally require that you visit them personally in US, although there might be some exceptions
nikolay
2018-08-19 21:03
Yeah well stripe atlas does that from a distance
nikolay
2018-08-19 21:03
And you get us stripe so when you process payments from US customers they are considered domestic
nikolay
2018-08-19 21:03
So you get almost no declines
michal.opoka
2018-08-19 21:04
you should be able to open stripe account for any US LLC, but bank might be a problem, although you could use Transferwise Borderless
nikolay
2018-08-19 21:05
Transferwise seems a bit strange lately to be honest when you run a virtual office or address
nikolay
2018-08-19 21:06
Rather have a proper bank acc
nikolay
2018-08-19 21:06
Than rely solely on them
michal.opoka
2018-08-19 21:08
I think you could also ask a global bank like Citi if they could open account for your LLC and verify your identity in your home country instead of US
nikolay
2018-08-20 09:02
@michal.opoka any ideas how to avoid the CFC rules that would be applied by the ATAD for the offshore company which is a Seychelles one?
vinodgn0088
2018-08-20 10:43
@nikolay, Move to country without CFC or If you are a EU citizen, setup your business in Member states with low corp.tax
nikolay
2018-08-20 10:44
@vinodgn0088 Moving not a great option. I am indeed an EU Citizen - wouldn?t each country apply its own CFC rule meaning that e.g. in some countries the CFC rule may apply only to passive income companies or the so called shell companies?
vinodgn0088
2018-08-20 10:45
As far as I know, CFC rules don't apply to member state companies. However you need to make sure that "effective place of management" is happening in the country of Incorporation
nikolay
2018-08-20 10:45
Yeah that?s the tricky part
vinodgn0088
2018-08-20 10:45
i.e, if you are a one man business and operating the company from your residential country place of effective management rules might kickin
nikolay
2018-08-20 10:52
Shall see which regime does the country I reside in decided to put in place
nikolay
2018-08-20 10:52
They even don?t have a draft ready yet although they should implement it from the 1st of August.
nikolay
2018-08-20 10:53
Given the amount of offshore corporation politicians have in our country I believe they will chose the most favourable for them option and the one best for the national revenue agency
michal.opoka
2018-08-20 18:54
@vinodgn0088 CFC rules can apply to member state companies too, in Poland for example CFC kicks in unless company is doing 'real' business in another member country
michal.opoka
2018-08-20 18:55
@nikolay it's possible that your country will only create CFC rules for companies, not for individuals
nikolay
2018-08-20 18:56
What exactly you mean for companies?
nikolay
2018-08-20 18:56
Local companies that own shares in companies incorporated in low tax zones?
michal.opoka
2018-08-20 18:57
If company which is tax resident in your country will control foreign companies then CFC tax will have to be paid
michal.opoka
2018-08-20 18:57
EU Directive only requires CFC rule for companies, but some countries like Poland implement it also for individuals
nikolay
2018-08-20 18:58
I see then if they do not apply for individuals controlling foreign companies I?d be fine.
nikolay
2018-08-20 18:58
But they will still have it implemented in the eyes of ATAD.
nikolay
2018-08-20 18:59
We will have to wait and see.
michal.opoka
2018-08-20 18:59
yeah, it depends on your country
michal.opoka
2018-08-20 19:01
@vinodgn0088 place of effective management rules can be avoided in some cases, some double taxation avoidance treaties have tie-breaker residency rules which favors place of incorporation, not place of effective management
michal.opoka
2018-08-20 19:03
Polish-US double taxation avoidance treaty has this for example so if Polish person creates US corporation it will be US tax resident even if place of effective management is in Poland
nikolay
2018-08-20 20:20
That?s nice because you can run it tax-free in the USA depending on your business.
nikolay
2018-08-20 20:20
As long as it is a LLC not a C-corp that is.
vinodgn0088
2018-08-21 01:46
@mikeseo, Do you have URL of that DTA file?
mikeseo
2018-08-21 04:26
brother @michal.opoka
vinodgn0088
2018-08-21 04:51
@mikeseo Ah my mistake. :slightly_smiling_face:
vinodgn0088
2018-08-21 04:51
@michal.opoka Do you have URL of that DTA file?
michal.opoka
2018-08-21 07:56
michal.opoka
2018-08-21 07:57
(ii) The term "united States company" means a corporation,
, or any unincorporated entity treated as a United States corporation
for purposes of United States tax, which is created
or organized under the laws of the United States or any state
thereof or the District of Columbia.
michal.opoka
2018-08-21 07:57
(h) The term "resident of the United states" means:
(i) A United States company, and
(ii) Any person (except a company or any entity treated
as a corporation for United States tax purposes) resident in
the United States for purposes of its tax, but in the case of a
partnership, trustee or administrator only to the extent that
the income derived by such person in that capacity is subject
to United States tax as the income of a resident.
michal.opoka
2018-08-21 07:59
In case of Poland this is not the only one, it's similar in DTA with Estonia, Latvia, Lithuania and few other countries, although some agreements would be wrecked by MLI convention like the one with Canada
vinodgn0088
2018-08-21 09:45
@michal.opoka, But it won't work if the USA company is creating a permanent establishment in Poland. Just think you have a USA LLC and you run it from home in Poland and your clients are outside of Poland. If you do work from Poland soil (your home) you are creating a permanent establishment of your USA LLC. Article 6 of the DTA file is sufficient for Poland to claim their taxes.
michal.opoka
2018-08-21 09:51
@vinodgn0088 LLC can only create PE in Poland if it's taxed as C-Corp in US (which is bad idea anyway), but assuming it is then it depends on what company is actually doing
michal.opoka
2018-08-21 09:56
@vinodgn0088 If it's not taxed as C-Corp then it cannot create PE because tax transparent entities are not subject to tax themselves, but Polish will have to pay taxes for LLC
michal.opoka
2018-08-21 10:03
@vinodgn0088 This incorporation residency rule could be useful in some other cases like having Estonian holding company assuming it wouldn't be CFC and wouldn't do business in Poland
michal.opoka
2018-08-21 10:42
@vinodgn0088 Personally I'm thinking about something else - creating tax transparent LLC and renting office in US. However LLC wouldn't have any dependent agents on the ground in US so IRS shouldn't consider it to be engaged in trade or business in US according to this https://ustax.bz/non-us-entrepreneurs/ LLC would buy services from another Polish company and sell them to US clients - this should count as doing business in United States according to Polish tax authorities and since office is permanent place of business then LLC would count as owner's PE in US even though US doesn't tax it. If profits are from foreign PE then Polish individuals can effectively get them without Polish tax under internal Polish law
vinodgn0088
2018-08-21 11:08
@michal.opoka, So you are saying that if you have a tax transparent USA LLC with Estonian company as holding 100% shares you don't owe anything to Polish tax department? I think you will have hard hard time explaining this to polish tax authorities if you don't have substance in Estonia. Regarding your actual plan: Why you need to rent office in USA if you are going to stay in Poland. If you plan to hire someone in USA and manage your goods/stocks, then this will not create a PE in USA as long as the staff don't have decision making rights. The main head behind the business (the decision maker) stay in Poland; so Polish tax authorities have their claim again.
michal.opoka
2018-08-21 11:46
@vinodgn0088 I'm saying that it depends on what company is actually doing - if it conducts business in Poland which would fall under PE then yes it would be taxed in Poland, but if Estonian company would only get passive income - dividends, rents or royalties then it's another story (and there are other issues like CFC and anti avoidance rules which have to be taken into consideration). As for actual plan - there are cases in which people on the ground are not required for triggering PE, for example having server (understood as physical device - not just web hosting or VPS) in foreign country can trigger PE on it's own. In my case the office would be for marketing and mailing, it could also act as a place for meeting with a client so there are legitimate business reasons for renting it.
wimva
2018-08-24 15:46
All this CFC regulation s making it tricky, so I'll just ask for advice here...
I want to set up shop in Belgium, which will have CFC rules starting Jan, 1st. Effective management etc will occur here too.
Georgia seemed like an interesting choice, as it has territorial taxation. This would cut my tax rate to 0%, as I don't intend to do business there. Which also shows a lack of ties...
Preferable, I'd even defer paying out dividends/salary from the corp, as that would push my income taxes sky high. Not a fan and I don't need it now.
Double checking with a knowledgeable tax accountant (recommendations please?) will be for a later stage, but would this hold?
I'm afraid the lack of ties might kill it off, as I don't see the gov accepting "ease of accounting" as a solid reason to go abroad.
michal.opoka
2018-08-25 01:03
@wimva Most likely Belgium has Place of Effective Management rules so your Georgian company will be tax resident in Belgium and subject to Belgian CIT
szekessy
2018-08-28 18:20
has joined #taxation-personal
augustas
2018-08-31 19:52
Let's say country X has CFC rules for taxation.
Anybody knows if CFC rules would apply for US C-Corp shareholder who has 100% shares and is resident of country X? Shareholder is non-US person, and non-US resident.
Or perhaps CFC rules can only be applied to US LLC?
michal.opoka
2018-08-31 22:54
Depends on country, but it's very likely. They shouldn't apply to LLC if it's tax transparent
nikolay
2018-09-01 06:26
@michal.opoka so no CFC rules kick in if they should be applied to a Foreign Owned Single Member US LLC which is indeed considered tax transparent for IRS purposes.
bigworld
2018-09-02 08:19
Check exclusion rules for CFC in your country of residence, but for sure owning 100% of the shares triggers the process for evaluation.
trevorjames
2018-09-02 17:46
I am a Canadian non-resident who owns a Hong Kong company with my wife. We never spend any time in Hong Kong and business takes place outside of Hong Kong. I am considering just going the safe route and paying Hong Kong corporate tax along with personal tax as well in Hong Kong since the rates are reasonable. Will doing both of these solidify my position with Canada as a non-resident and ensure that I?m in the good books of both Hong Kong gov, my banks in Hong Kong, and the Canadian gov? Anyone know?
trevorjames
2018-09-02 17:47
Also, if i pay myself from my HK corporate bank into my HK personal bank, I could invest in Hong Kong stocks and world stocks from my HK personal account? I hear the capital gains taxes and taxes on investment in stocks in HK is good?
michal.opoka
2018-09-03 18:11
@nikolay they shouldn't kick in since you have to pay tax for tax transparent LLC anyway, but you should always double check with local tax advisor
james
2018-09-04 08:21
Hi all, is anyone here tax resident and living in Thailand and successfully using this loophole to their advantage? "Residents who derive income from outside Thailand will be subject to tax only where the income is remitted into Thailand in the year in which it is derived." ie: remitting income from their UK LLP or LLC or other.. I'm curious to see how it can work in practice. Source: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=2ahUKEwiCnqPx9KDdAhXKpY8KHdAFAZUQFjABegQICRAC&url=https%3A%2F%2Fwww.pwc.com%2Fth%2Fen%2Fpublications%2Fassets%2Fthai-tax-2017-18-booklet-en.pdf&usg=AOvVaw3y33-OVbjaxl2S6rWxRNRj
sanderkocken
2018-09-04 11:52
@james I am a tax resident in Thailand and also have a LLP, which I currently don't use. A little while ago I asked a similar question here and received more clarity on this subject from fellow slack members. First, I think you shouldn't consider this law a loophole. The law mostly applies to passive income only and there is a lot of incorrect information circulating in places like ThaiVisa or nomad groups. There is a difference between the law and what people tell you is possible, but are actually just getting away with. Although Thailand doesn't have CFC rules, effective place of management rules apply, especially if you work online. Your income would be considered locally sourced, not foreign sourced if you conduct the work in Thailand. This is because it's not the location of your client or customer that determines this, but which country's resources you use to conduct your work. There are ways to work around this if your other shareholders are non-Thai resident, but it remains a tricky situation. Also take into account your situation in Thailand. Are you having a work permit through a company like IGLU or are you married or having a Thailand elite visa? Your immigration status does indirectly affect this too.
sanderkocken
2018-09-04 12:10
In my personal case, I use a local company who hires me and pays me my invoices after local taxation. This is acceptable for lower amounts, as personal taxes in Thailand are quite generous. But, having lived here for nearly 5 years, I also realized that Thailand is not really the optimal country to establish tax residency and to store your assets if you're not willing to open a local company. I have friends with local companies operating under a BOI license. They all optimized their taxes very effectively through offshore companies or benefit from tax incentives by the Thai government. It is a very bureaucratic process, that entails many procedures and requirements and therefore an unattractive option for any nomad style operations. In your case, I think you should either make sure your effective management takes place abroad, alternatively pay the taxes in Thailand, or pick another country as tax residency and turn Thailand into a place you just spend time less than 6 months a year.
michael
2018-09-04 14:03
@sanderkocken solid advice.
michael
2018-09-04 14:07
It is possible to run the risk of living in the "grey" area of the tax laws in Thailand... however do hold caution that if they do pick up on your income and tax situation, your entry to Thailand can be denied.
My view is to either get BOI status, or setup a proper entity that legally entitles you to work in Thailand, or as Sander has mentioned pick another country as tax residency.
sanderkocken
2018-09-04 17:31
If you are keen to hire staff in Thailand and operate a business in one of the prescribed industries or fields the BOI structure is actually quite interesting. It would let you own 100%, compared to the 49% with a regular Thai company structure. For most industries they require some minimum investment, but these are still moderate depending on the industry. For businesses focussing on digital innovation, they provide incentives with up to 8 years of CIT exemption.
In general, doing business in Thailand is something that requires the right preparation, guidance and again, might not be a fit for the average lifestyle business. From what I heard the BOI is actually very proactive to help, so if you're keen to learn more, you can schedule a meeting with them and they will be happy to consult you.
As @michael illustrated, many nomads operate in a grey zone. If you do some work online on a tourist visa, marriage visa or Thailand Elite during a short term stay you would probably be fine. Long term tax residency without the right permits is a totally different game. Theres a lot of noise to be found online and everyone claims to be an expert. In my opinion you better be on the safe side.
james
2018-09-05 04:31
Hi @sanderkocken, many thanks for your detailed response about this. Yes I agree there is a lot of confusing and I assume incorrect information about this on the web hence my enquiry looking for someone who is doing this in practice. I have yet to talk to a Thai accountant about this but your explanation that online work conducted from Thailand (such as it is in my case) would be considered locally sourced and would therefore be assessable in Thailand makes perfect sense to me, those who do otherwise are probably getting away with it as you say. However I have heard very mixed reviews about how taxes are assessed in Thailand (ie: asking the neighbour what car you drive and what brands you wear to come up with figures). I?m a UK tax resident and UK sole trader and also have a Thai LLC so I am investigating moving my tax residency to Thailand or alternative location in Asia. I think you are right in saying Thailand doesn't seem quite the optimal place to establish one's tax residency, that's why I haven't taken the plunge yet.
james
2018-09-05 04:40
I'll investigate the BOI structure thanks, for now we're just operating as a classic LLC. Definitely don't want to live long term in the Thai grey areas, I agree.
osiris
2018-09-05 19:02
has joined #taxation-personal
michael
2018-09-07 03:20
good luck @james
tcdemomento
2018-09-08 10:13
has joined #taxation-personal
hullmat1
2018-09-10 07:03
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dsolutions
2018-09-16 15:42
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grante.francois
2018-09-20 04:39
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henrique
2018-09-21 02:43
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greenard23
2018-09-21 06:11
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greenard23
2018-09-21 06:27
@sanderkocken @james This is super timely for me. Sander your definitely right about the info out there not being correct, literally everyone thinks it's just the money remitted, I actually did until yesterday, although gambling and prostitution are also illegal here and is rife, so what they actually enforce remains to be seen. I have been all over the place for the last few years but for 2017, 2018 I will qualify as being a Thai tax resident, behind a year I know :disappointed:. It's quite hard work trying to explain it to the Thai tax office to get the TIN number... I just work for a company in Singapore and my cash goes straight to my Singapore account I then take what I need here. Not even sure where to start to guess getting my TIN number and go from there, although I have only been here 111 days this year so it's proving difficult to get... I'm trying to go down Simons 10k in a local bank account route now, to justify having one for 2018. Guess step two will be to seek the help of a tax lawyer, anyone have any recommendations? Am I correct in thinking that if you remit the cash a year after it is earned you pay no tax? Or is this another myth?
greenard23
2018-09-21 06:41
can you not apply for the NHR scheme?
sanderkocken
2018-09-21 07:00
@greenard23 As you already noted, there is a big difference in what is the law and what is actually enforced in Thailand. The reason the authorities keep a blind eye towards gambling and prostitution is that their own stakes are too significant. We can?t say the same about your tax situation :wink:. Nevertheless, I do think you shouldn?t worry too much about your previous years, if you did pay your tax in another country. The remittance system is in my understanding only for passive income. Governments install these remittance or exemption rules, assuming the income is already taxed abroad (while often this isn?t the case). If you work from Thailand, your income is not foreign sourced, but locally sourced in Thailand. (Especially when Thailand becomes your PE or effective place of management). For as far as I know the revenue department doesn?t directly share data with immigration, yet. So assuming you are on a tourist visa, and never have your taxes withheld by a thai employer, you?re should not be on any radar. I do think you should get a Tax ID though, and this is incredibly easy. Unlike the immigration department, the revenue department is extremely helpful and is happy to provide you a TIN. Some offices might frown upon it a bit, but with the right justification you should be fine. My personal advice is to tell them you spend time here with a Thai girlfriend, will reach the 183 day limit this year and receive local rental or passive income from abroad. After you received your ID you can easily file your taxes online.
sanderkocken
2018-09-21 07:12
In my own opinion and experience, I think Thailand is a great nomad destination. If you?re here, working online on a tourist visa or running your company remotely, and don?t reach the 183 days per year you?re all fine. Immigration doesn?t care. If you?re actually planning to spend a good chunk of the year here, and want to pay your taxes here, you really should try to figure out your immigration, labor and company structure first. Because in that case, only getting a TIN, won?t make things legal. (that?s me assuming you work or running a business!)
greenard23
2018-09-21 07:13
Hi @sanderkocken, yes, I'm on perpetual tourist visas. I don't work for a Thai company in any capacity or have any clients here, actually, I just contract to a Singapore based agency and have a Singapore bank account. For previous years I have'nt actually paid tax as I have been vagabonding around the world/Thailand has made it quite hard for me to submit when trying to explain I have no work permit, I've been misinformed online ( not a viable reason I know). I dare say what will happen is when I transfer my savings from Singapore home. here or other ill get hit with tax then. Anyways I have to start somewhere.... so my plan was to just get a TIN number so and submit my tax return in March 2018, the issue is the revenue woman seems to think I cant apply for a 2018 one as I have only been here 111 days, she is suggesting 2017, which isn't massively suitable as then ill have to do 2017 return and get hit with all kinds of fines... what to do??????
greenard23
2018-09-21 07:14
Yeah I agree Thailand is cool, I think what I may do moving forward is split the year between here and Europe, and be a tax resident in one of the countries, I'll deal with that issue next... Just need to get this first set of problems outa the way.
greenard23
2018-09-21 07:17
also, @sanderkocken do you have any idea how you don't get taxed if you remit a year later works?
sanderkocken
2018-09-21 07:18
Hmm, What if you stay here for 2.5 more months this year? You would have reached the amount of days and can still apply for a TIN in time for the report in March 2019.
sanderkocken
2018-09-21 07:23
I think there?s is a lot of vague information about that remittance system. I think the issue with it is that many people think they can use it, and never get caught using it incorrectly due to the lack of persistence from the thai government and assume it?s all fine. In my beliefs, it doesn?t apply to labor or contracting income conducted in Thailand, which definitely would be considered local income
sanderkocken
2018-09-21 07:24
I talked to a few local accounts and they couldn?t provide a clear stance on it either. But I do know a few people who run a properly structured foreign company (that has a PE abroad) that use the remittance system for their dividends.
greenard23
2018-09-21 07:24
Yeah that would be the perfect option, and far less confusing to the revenue woman, who isn't actually trying to chase me down for 2017, rather trying to find a solution for me, but my Singapore bank has sent me this letter about CRA requesting a TIN number of sorts by end Oct, to ensure I am not a Singaporean resident. I also have a property in the Uk and put through the small amount I get paid by UK companies through my self-employment there. Do I
maybe send my UTR number for now then the Thai.... Or alternatively, Simon mentioned a workaround depositing 10k into a Thai bank... "To do so, simply visit your area?s local revenue agency office and file form L.P. 10.1. In rare cases, it has been reported that the form was refused due to the type of visa held (for example, a tourist visa). In such cases, a workaround is to deposit a small sum (10000 THB+) of money in a term deposit with a Thai bank and then apply for a tax ID via form L.P. 10.4 instead (withholding tax)."
greenard23
2018-09-21 07:27
Yes, I agree it's all very vague.... I'm just a one-man band contracting freelance, based in Thai for 5-8 months a year trying to find the path of least resistance, keep ending back at the despair level.
sanderkocken
2018-09-21 07:27
Think that?s worth a try. Not sure if it?s easy to open a term deposit though.
greenard23
2018-09-21 07:27
I'm not too sure what a term deposit is tbh....
greenard23
2018-09-21 07:30
As we stand the revenue lady just wants to see a freelance agreement that I contract to a Singapore agency, some kind of proof I have sent money here monthly to live on ( not holiday money), my tenancy agreement, they will then issue me a TIN number. I wonder once I get that will I just be able to keep sit still and submit my 2018 return, or will I then get some kind of letter asking for 2017's return, penalties etc...
sanderkocken
2018-09-21 07:30
I think he meant a saving account that locks your money for a certain term for a higher interest rates. The revenue departments website states:
sanderkocken
2018-09-21 07:31
4. income in the nature of dividends, interest on deposits with banks in Thailand, shares of profits or other benefits from a juristic company, juristic partnership, or mutual fund, payments received as a result of the reduction of capital, a bonus, an increased capital holdings, gains from amalgamation, acquisition or dissolution of juristic companies or partnerships, and gains from transferring of shares or partnership holdings;
sanderkocken
2018-09-21 07:31
So I guess that Simon meant that if you deposit that money, you would be liable to pay tax over your interest rates in Thailand, and thus should get a TIN provided
greenard23
2018-09-21 07:32
okay well if we talking 10k baht that is no big deal...
roman
2018-09-21 07:32
I can?t get any clear answers online. Some sources make it sound like I?d be still liable for taxes in Canada. Do you have any concrete information on this? Thank you. @greenard23
greenard23
2018-09-21 07:33
ahhhh okay that makes sense...... if you live here you know that if I approach that same lady with new docs, she will be confused as hell lol, man i laugh not to cry
greenard23
2018-09-21 07:36
@sanderkocken Once I overcome this TIN situation, do you know any good accountant that can advise me on how best to move my funds across, will help submitting my 2019 return, maybe have to help with a backdated 2018 one.
sanderkocken
2018-09-21 07:39
When applying for a TIN it might help to bring a local with you that?s easygoing. Almost all of my issues with immigration, labor department and revenue department in the past were always resolved by a lady from my previous workplace. She did all the communication for me, exchanged cute Line stickers with the staff and brought some thai candy?s for them every time we needed help. It?s kind of the thai way of doing things haha, connections are everything here.
greenard23
2018-09-21 07:44
lol, yeah you're not wrong I took my missus but were still hitting a brick wall, she just can't get her head around me not being here long enough in 2018. Keep reverting back to 2017, :disappointed: , why is it your doing things via LLC and a thai company, guess unlike me your have a more settled life here?
greenard23
2018-09-21 07:45
My plan is split the year between here and EU, maybe 7 months here, 5 EU then I only have to submit 7 months of income. Still trying to figure that part out...
sanderkocken
2018-09-21 07:50
I can?t really recommend a good accountant. Until last year, my taxes were withheld by the outsourcing company that contracted me, and I filed my own report last march. If you start looking for an accountant, I think it?s important to seek for one that?s foreigner orientated.
sanderkocken
2018-09-21 07:51
You might better send me a direct message, not sure if it things are getting too lengthy here..
greenard23
2018-09-21 07:55
Was just thinking the same ill pm, before people get bored :slightly_smiling_face:
greenard23
2018-09-22 01:27
I don't sorry, still in the research stage.
henrique
2018-09-22 01:36
Hey , has anyone here formed a UK company (LP or LLP) or Canada LP? I?m trying to wrap my head around taxes. I currently live in Brazil, which taxes income from anywhere in the world. Does the fact that these entities are pass-through mean that I?d immediately need to pay income tax in Brazil for the profits coming from the business? And that it wouldn?t be possible to retain the profits in the business at the 0% UK tax rate?
asarun72
2018-09-22 01:41
Since you live in Brazil you will eventually get taxed due to CFC laws . Your best best would be to establish tax residency in countries like panama , Paraguay , costs rica
asarun72
2018-09-22 01:44
Check if Brazil has CFC laws. If Brazil is signatory to CRS , your tax authorities will know of your foreign income.
sylvain156
2018-09-22 01:45
@greenard23 just to be sure, you understand in Thailand you don't have to pay tax on your income from overseas, only from income you bring back to Thailand right? You should bring back minimum 10k? to pay tax in Thailand. Last year I bring around 10k? and paid only around 100? tax. If you bring 10k thb you'll not pay tax and don't have tax receipt I guess.
sylvain156
2018-09-22 01:49
Last year I made my tax id even if I stayed only 2 months in Thailand. I can get you in touch with the expensive lawyer who's able to do that. I think it was around 1 or 2k?. I don't trust to this lawyer but if you wanna do only this task he can do it.
asarun72
2018-09-22 01:51
@sylvain156 did you get tax residency in Thailand ? And Thailand doesn?t tax foreign income unless its remitted backs to Thailand ?
sylvain156
2018-09-22 01:58
Yes and yes @asarun72
asarun72
2018-09-22 01:58
That?s great
sylvain156
2018-09-22 01:59
Yeah that's perfect
asarun72
2018-09-22 02:01
Have you set up any offshore company in places like bvi, Hk?
greenard23
2018-09-22 02:28
@sylvain156 Hi mate, Tax ID is not so hard to get so I will avoid the expensive lawyer just for these purposes, but thanks so much for the offer. The 10,000 baht was just a bank deposit workaround to get the Thai tax ID before 180 days stay. Are you filling annual tax returns in Thailand? I have been informed it's not just the cash you bring into Thailand ( I thought this, I also thought you could delay a year and pay no tax), it's the salary you have got while here. For example, I stay here 8 months, and travel for 4, I'm liable to declare the whole 8 months salary, not just the let's say as an example the 800k I lived off for those 8 months. So let's pretend the actual salary was 2 million baht, I only remitted 800k, the tax is due on the 2 million, not just the 800k. I'd love to hear from anyone who has different info and has successfully made annual returns with no hassle.
greenard23
2018-09-22 02:30
The reason from my understanding it's due on the full amount is that you have conducted that work from here - used the bts to get to a coworking, internet the roads etc... essentially the infrastructure here has 'facilitated' this. I'm not expert BTW, just been researching a lot.
henrique
2018-09-22 02:33
I spoke to a lawyer here in Brazil and CFC laws are a bit different here. They apply mostly to foreign companies owned by Brazilian companies. Now for individuals who own companies abroad, all that is needed for the company not to be taxed would be to have ?substance?. That?s for the corporate level. I?d be taxed on the personal income level if there was any sort of profit distribution. What I don?t understand is whether the profits from the UK company would remain at the corporate level or would they automatically be classified as income at my personal level (and therefore be taxed)? I hope that makes sense!
koshis
2018-09-22 03:15
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redareda9
2018-09-23 00:00
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sylvain156
2018-09-23 01:01
ok perfect @greenard23 if you can manage a tax ID for a regular price. Yes I fill the annual tax returns in thailand (my lawyer do it for me actually, not the expensive one, a local lawyer, only 5k thb I think).
For the income which is taxed (>>>> I have been informed it's not just the cash you bring into Thailand <<<<<) I don't agree, for me it's only the money that you bring back to thailand. I search for long time, also with the french expensive lawyer who use to do this kind of thing. Please check this offical link : http://www.rd.go.th/publish/6045.0.html
And especially : >>>>>>> A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand. <<<<<<
It's very clear for me. Portion not brought into thailand is not taxable.
That's why I brought 10k? in thailand each year, and pay 100? of tax on this portion.
sylvain156
2018-09-23 01:02
actually I already did it (paid my tax) for the year 2017, it worked well, I've the proof of payement etc.
sylvain156
2018-09-23 01:03
who told you you've to pay tax on your full income ?
sanderkocken
2018-09-23 02:24
@sylvain156 you pay tax on your full income if that income is fully derived from Thailand. If you're a self employed nomad, don't receive your income as dividends from a company with a PE abroad, and do the work remotely from Thailand (and therefore use Thailand resources) it's considered locally sourced, not foreign sourced. It's not determined by where your clients or employer are, but where you do the work. The remittance system only works well for passive income and might work well for you if you're in that boat. Thing is, how do you know it "worked well"? Most likely, Thailand doesn't even know about the remaining money in your foreign account. Based on my findings and advice from others in this group, the remittance system can be used, if properly structured and for the right kind of income. But for someone operating as a self-employed from Thailand serving clients abroad, it's a very grey thing to do.
greenard23
2018-09-23 04:01
@sylvain156 can you pm me details of your lawyer as I can get the tax ID I just need someone to help with my returns, in case there is info I don't know, 5k seems reasonable. As Sander mentioned it's a very grey area but were probably of the 5% who actually make an effort most just don't bother with it altogether. My question to the group is if you have enough to live on, and don't feel the need to remit the money you have sat on for a year for it to be tax free in Thailand, what happens to that money. Let's say you move to Spain at later date and try and transfer a lump sum, would the Spanish authorities then tax you on this? Would it almost be better to wait a year transfer it to Thailand so it goes through their system then move over to Spain?
sylvain156
2018-09-23 04:20
Oups I forget to tell you @greenard23 the local lawyer is in Chiangmai, not bkk. I have my apartment and pay my tax in the Chiangmai office. You need bkk or CM?
sylvain156
2018-09-23 04:36
@greenard23 if i understand well your question, the answer is no, the money which is not bring into thailand is still not taxable by spain or other. The important thing is the money was earn while you were a thai tax resident.
For my case, I bring 10k? in thailand, pay tax on it, and earn 100k? in hong kong (my company), which stay in HK or go to singapore. Of course the 100k are not taxed and I can bring them back to france later and it will be still not taxed. But I may prove I was a thai tax resident.
greenard23
2018-09-23 04:42
Thanks @sylvain156 I'll find a locally based lawyer, unfortunately, I don't have a company set up, so I don't receive payment in the form of dividends so may be a slightly different scenario to your own. Do you transfer that all at once the 10k? Thanks for the additional info as well...
sylvain156
2018-09-23 04:43
oh ok yeah without company i don't know how it works
sylvain156
2018-09-23 04:45
yes i transfer in one time the 10k, with transferwise it's very cheap (i speak about the conversion rate, not about the fixed fees which are insignificant)
ggiampieri
2018-09-23 08:49
@sylvain156 if you dont mind answering.. Do you have work visa or just tourist 30 days/6months multientry?
sylvain156
2018-09-23 14:13
tourist visa because i spend only 3 months/year in thailand
sylvain156
2018-09-23 14:13
but the best solution if you spend more is the ELITE VISA 5 years
sylvain156
2018-09-23 14:13
but it's 13k?
sylvain156
2018-09-23 14:14
the work permit isn't usefull actually. I just say to everyone "i'm a business owner, i manage the business, don't work on it"
roman
2018-09-23 14:33
But ?managing? is still work :joy:
koshis
2018-09-26 16:31
Just caught up on the thread. Lots of good info :muscle:
smuft84
2018-10-04 15:03
question : if i remit money on my 120th day in bangkok and then stay for 180 days in a year will that remitted money on the 120th day be taxable? What if it is not in the same calendar year?
sanderkocken
2018-10-06 09:15
Question: Let?s say you are born in country A, lived worked and paid tax in country B for 3 years. You want to remain an address (sub-rental contract to create substance) in country B, and decide to live a more perpetual lifestyle throughout the year. You never reach the 183 day limit in any country (including country B). You want to keep paying your taxes in country B. Is this legal, and would country A consider this an issue? Thanks for clarification.
danz
2018-10-06 09:19
I guess the answer is, it depends on the country.
cliqueapp
2018-10-07 12:11
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cliqueapp
2018-10-07 13:15
Hi all :slightly_smiling_face: I've had a read through the discussion, some great info and good spirit in working together. I have a few questions bordering the CFC / Residency laws, at least to give me a better understanding....... Anyway, I may be moving from my country (Australia) to my wife's country (Israel). We are legally married in Aust but not in Israel (I'm not Jewish).
If I am going to move I want to minimise my tax obligations. I have two possibilities in my mind:
1) to take up residency in Panama and incorporate a Panamanian company for some freelance work I do. At the same time set up an IBC in another jurisdiction to trade stocks/forex etc with my own funds. I would plan to spend a few months each year in Panama, up to 6 months in Israel & the rest travelling to conferences and holidaying back in Australia. As Panama has no CFC laws, for the time I spend outside of Panama, would trading profits be considered foreign sourced income so there would be no tax paid? I would pay Panama tax on the freelance work.
2) Take up residency in Israel. Same set up - a freelance company and a trading company. Israel has a 10 year tax free rule for the companies of new immigrants if income is foreign sourced (not sure if this applies to non jewish immigrants though). They also have no capital gains tax for existing assets afaik. So the question again is are trading profits considered foreign sourced income if the trading is conducted in country? Or is there any other set up for a trading company to enjoy minimal taxes? Maybe the option to set up an office in a jurisdiction such as Labuan?
koshis
2018-10-07 13:52
As a fellow Australian I thought I'd jump in here...
Firstly make sure you cut ties with Australia properly otherwise they will still claim you as a tax resident and tax you. The countries mentioned I don't believe have DTA's (definitely no for panama) so that means no simple way to determine residency and that Australia can still claim you. So by cutting ties make sure you do these things... done have a permanent home available to you in Australia, that is the most important one. When you come back to visit Australia stay at a hotel not even with family as in some cases this has resulted in people being deemed to have a permanent home available to them. Remove yourself from the electoral roll, cancel your Medicare, do all the things necessary to make sure it appears that you are leaving permanently.
Secondly make sure you have a permanent home available to you in the new country. Create a centre of vital interests in the new country, gym memberships, regular doctor, join a social club, rsl/rotary equivalent, whatever.
Whether you should go for panama or Israel is up to you, but it sounds like you will be spending more time in Israel. If that is the case I would say use that as your residency. The fact that your partner is Jewish I presume gives you connections there and will look more like you have planted roots there, and you have a legitimate story. Plus if you are going to be spending most time there, it would make sense to have the permanent house there. Lease with 6-12months minimum. (You can not be a nomad with no fixed place and get out of Au taxes, they will take the view that you are attempting a tax holiday).
About trading company. Check if Israel has CFC rules, (panama does not I believe). If no, then i don't believe you could create minimum substance where you chose to incorporate.
However check the tax laws carefully, if you are performing the trading whilst in Israel and whilst being a tax resident there, they may have some specific rules about that which states something like work performed from there is considered to be local sources income. Also sometimes a foreign company can be regarded as being resident in countries by things such as having management and control exercised there.
If that's the case ensure board meeting are documented and actually held where the offshore trading company us located or atleast outside of personal tax residency country (israel).
I think having substance for the offshore company and ensuring management and control of the offshore company are done from that jurisdiction is good practice in any event.
Labuan sounds like a good idea to me, for a few reasons, easy and economical to setup substance, easy place to get to (relatively), in order to conduct a couple of board meetings a year. Plus you can pay a small tax on your earnings which will make it easier for you to prove source of wealth for bank accounts etc in future.
But there might be better options/ jurisdictions.
Last thing on Australia, do not come back too frequently, do not make it your 'habitual abode'.
I think I read somewhere, that sixteen days per year was the non disclosed rule. You might need to do some digging on that.
cliqueapp
2018-10-07 14:14
@koshis thanks for the reply :slightly_smiling_face: Yeah, I saw a tax lawyer and that was something he reiterated - cut all ties and document your new 'center of life' otherwise you leave yourself open... I have no issue with spending time in Panama in order to satisfy requirements, and I can justify travelling to israel anyway for any number of industry related conferences. Similarly, I can live in Israel too, they also have a law where you can choose to not have your company as a tax resident for a year upon taking up residency, sort of a 'see if I like it' approach which you need to make a final decision on later.
Mostly, if Im going to make a move I'd like to minimise cap gains & personal tax; the issue of trading profits as foreign sourced income or not seems murky.
Hong Kong (under the 'other profits' section) says this - "Taxable if the stock exchange where the shares or securities in question are traded is located in Hong Kong. Where the purchase and sale took place over-the-counter, taxable where the contracts of purchase and sale are effected in Hong Kong"
So, assuming foreign source laws are similarly derived the world over, not trading on a HK exchange (or panamanian or israeli) is easy, however would trading in HK means all buy and sell contracts be considered 'effected' in HK?
koshis
2018-10-07 14:19
I think in that HK example you would be fine, as you say not using HK exchanges, in that case no contract would have been effected in HK
koshis
2018-10-07 14:24
I also agree on trading activity and trading profits/ income, seeming to be a grey area. One way to do might be to pay yourself a salary from the trading company so you are the employee who handles the trades on behalf of the company and gets remunerated for that task. Creating some separation. Would be keen to hear what others have to say also.
burrup.lambert
2018-10-07 15:32
For Australia the professional advice I received was when returning, as a general rule, return no more than 4 times, 4 weeks a year, I.e. 4 one week trips MAX. And when you leave Australia for the first time permanently try not return for 2 years. That is not to say that you can't return within a 2 year period. All this is based off previous taxation rulings that have become the norm to reference.
danz
2018-10-07 15:37
@cliqueapp I would take up the residency in Israel. I think it also applies for non jewish immigrants as far as I know, it?s for everyone who gets residency and you will be able to get it because your wife is Jewish.
cliqueapp
2018-10-07 16:13
@danz yes id probably prefer that. just need to find out the rulings around what is deemed foreign source income for both & subsequent cap gains tax rulings. if that isnt favourable either need to find a different option or take panama with the lower corporate tax rates.
me1892
2018-10-08 00:53
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mirceabujanca
2018-10-09 03:24
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ivan.lakatos
2018-10-09 04:15
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greenard23
2018-10-09 09:57
Is Australia not the 183-day rule per year? I know the Uk is now 90. I didn't realise any countries apart from the USA could claim you once you have given notice to leave.
koshis
2018-10-09 09:59
183 days is only one of the criteria that needs to be met for Australia
greenard23
2018-10-09 10:05
Seems like a bit of a grey area, just like the UK, thankfully by accident I left for 2 years in a row when I did, and have a gym membership, tenancy etc.. here in Asia. I go home for longer than a week at a time though.
greenard23
2018-10-09 10:06
Guess there will come a time when all countries just tax like America.
greenard23
2018-10-09 10:08
I got offered to be a partner in a UK Ltd, but I'm thinking this may push me over the line residency wise, as I have a house there I rent out, so I have not been keen on the idea, does anyone have any good recommendations for international tax lawyers? I could do with a consultation.
burrup.lambert
2018-10-09 10:38
Australia has 4 residency tests that you have to pass or fail (depending on how you view it). 183 days is one of them and quite straight forward, so is the superannuation one. The other 2 though are very ambiguous and the definition of some of the terms actually isn't defined in the tax law. Making it quite convenient for the ATO to decide whatever and however they want :upside_down_face:.
bryanlum888
2018-10-10 00:04
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max
2018-10-10 07:38
When did UK change the 183 day rule to 90?
sergiy.shlykov
2018-10-11 08:55
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tatelev
2018-10-17 10:36
hi, anybody filed this year the Form 5472 for his/her LLC that I can ask a couple of questions?
me1892
2018-10-18 03:48
Anyone have any idea what the implication of this blacklist is?
burrup.lambert
2018-10-18 09:27
From what I gathered its not an official blacklist, more of them just having a whinge.
umgelurgel
2018-10-21 08:16
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greenard23
2018-10-22 12:51
Hi all, Hopefully, I am based in Thailand (have the TIN). As a bit of a surprise one the companies ( Uk based) I contract to white label is going bust and the clients have asked to work with me directly (one is from the USA one Candian). I'm not too sure how to bill them as I don't have a company set up, and unsure how big I will get, so I was thinking of just sending PayPal invoices for now, as I seem to have a business account which I can rebrand under the new website name I will have by the end of the week. Does this sound plausible? I'm concerned if I rushed a UK LLC or Ltd to invoice I would potentially make myself a UK tax resident owing to bigger ties. Please note 80% of my income is currently sourced contracting for a company based in Singapore. So I don't want to make my life hard for the sake of 2 new clients.. Any advice would be appreciated.
wimva
2018-10-22 16:40
@michal.opoka I'm afraid so too. At least that's what I gathered in my absence of this group. A friend of mine thought this might work if the foreign company was imbedded in a private foundation. That was yesterday, so didn't really check yet.
Seems I'll be stuck with the tax laws (that will become) in effect until I move and I choose not to move before I can afford not to work a job. Slight Catch 22.
roman
2018-10-22 23:22
You can do Igloo route. It?s $$ but can also get the benefit of legal residency.
koshis
2018-10-25 12:21
Hi @sanderkocken
Was just going through posts on Thailand as I'm considering getting a Thailand elite Visa and being tax resident there. In your post you mention Thailand having effective place of management rules (as opposed to CFC rules), do you know where you have seen this? I was going through the Deloitte/ PwC guides etc and couldnt find anything on this, I have a feeling I've seen it before but I've looked at so many jurisdictions I can't remember for sure...
The PWC Thai tax 17/18 booklet states:
CORPORATE INCOME TAX
Resident status
Company residence is determined by the place of incorporation. A
company incorporated under the laws of Thailand is a resident company.
Place of management and control is not statutorily defined. Thailand taxes
its residents on a worldwide income basis.
sanderkocken
2018-10-25 13:18
Hmm, I checked and I actually can't find it either.. a while back, around May, I asked a couple of questions in this group on my tax situation. Back then, a few people have me a heads-up on that effective place of management rule.
koshis
2018-10-25 13:35
@sanderkocken ok cool! I've got RSM in Thailand helping me with some queries so may pose the question to them
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2018-11-03 20:10
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kiwiz
2018-11-05 03:01
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ren
2018-11-05 12:51
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ren
2018-11-07 07:21
In Europe, are there any countries besides Estonia offering tax deferred personal investment accounts to their tax residents?
aphelan1
2018-11-16 00:08
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max
2018-11-18 21:56
Looking for some advice on the UK Residency test rules: 183 days, workdays, ties etc. I have several limited companies and an offshore residence in Panama. I do not have any family ties with the UK, no properties here, I have private international insurance and was not planning on spending more than 90 days in the tax year, but things look differently now. I travel a lot and I ended up with a spreadsheet counting days in and out. Went to visit several tax advisors and accountants but they were either not knowledgeable or sketchy selling me some package. Anyone who got themselves in a similar scenario or would like to exchange ideas?
michael
2018-11-19 01:06
What are you looking to do? Are you a UK citizen?
max
2018-11-19 01:38
The first option is not becoming a UK resident in the first place, and is easy to accomplish if I can manage flying in and out once every week or two. I have meetings which are more effective if I am present.
max
2018-11-19 01:39
I have no ties to UK other than my limited company
michael
2018-11-20 04:02
So you just have to go to the UK for business? Just spend less than 90 days per tax year. And you're not a UK citizen right?
michael
2018-11-20 06:16
@max
22525
2018-11-20 14:51
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22525
2018-11-20 15:45
Hi :wave:! Does anyone have a definite answer whether or not the funds which are deposited from UK Stripe account into UK Transferwise LLP business account are considered UK-sourced income, even tho the trade is performed outside of the UK and partners are non-residents? In other words does remitting foreign-source funds from UK-based merchant account (Stripe) into UK-based bank account makes these funds UK-sourced income? :nerd_face:
greenard23
2018-11-20 23:44
Can you have an Ltd or LLP, in the UK and still not be classed as a resident?
greenard23
2018-11-21 00:03
Good question never thought if this, I have some funds from Canada hitting my UK personal account via Stripe which I will then redirect to my country of residences bank. I would like to say neither scenario is UK sourced. I was even considering using Payoneer, just to avoid anything going via the UK. Look forward to the comments...
max
2018-11-21 12:19
@michael I have a UK Business, I am not a UK citizen and in previous years I would only come to UK on business visits (for a day or two up to a couple of weeks). This tax year I already have stayed over a 130 days.
max
2018-11-21 12:20
@greenard23 being a share holder of a company does not render you a tax resident in the jurisdiction where ir is established
rp_vpnet
2018-11-22 10:07
PAYG tax withholding, does anyone have experience dealing with b2b invoicing with Australian customers if work performed outside of Australia. No permanent presence in Australia. I invoice through US LLC with tax residence in Malaysia
greenard23
2018-11-22 10:24
If you have been a perpetual traveller for a few years and accumulated some savings in an offshore account. When you then move to a country say in the EU and want to use these savings, what is the tax situation? Can they tax on past earnings, that haven't been taxed before whilst travelling?
greenard23
2018-11-22 10:31
Thanks @max I thought maybe it creates a big tie owning a company there. Good to know...
danz
2018-11-22 16:09
No, you shouldn?t have to pay tax on it. But make sure your story seems right, if they ask about where you been staying the last couple years. The more you can prove things, the better I guess.
greenard23
2018-11-25 04:32
Thanks, @danz probably best off moving it over year on year than all at once, stop them pestering me.
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2018-11-25 09:31
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daniel
2018-11-28 16:21
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daniel
2018-11-30 01:59
Anyone here have experience setting up a Wyoming LLC and receiving income from a US company? (for work done outside of the US)
Any tax issues faced? also which W-8** form did you need to fill out?
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2018-11-30 02:39
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johncitizen
2018-11-30 04:08
@daniel I do
johncitizen
2018-11-30 04:09
If you?re an Australian resident for tax purposes you must declare and pay tax on the profit as personal income. A simple single member LLC is a pass through entity, so it?s not easy to avoid in afraid.
daniel
2018-11-30 04:10
Okay. But did you have to fill out and send over an IRS form W-8BEN to the company you did work for?
daniel
2018-11-30 04:10
I hear that now there are a couple of other requirements for such LLCs
johncitizen
2018-11-30 04:45
Yeah usually I?m filling out W8BEN?s for everything
daniel
2018-11-30 05:29
have you needed to file form 5472? seems like a new requirement starting 2017
simon
2018-11-30 05:36
@daniel Form 5472 is not a tax return, it?s purpose is simply to identify who owns US companies and prevent them from being used for tax avoidance.
daniel
2018-11-30 13:00
Is it not a requirement to file it?
simon
2018-11-30 13:24
Yes it is. It basically says ?Daniel owns this LLC, he is a tax resident of X country, he loaned X$ to the LLC, was reimbursed X$ etc.?
daniel
2018-11-30 13:38
Okay cool thanks.
daniel
2018-11-30 21:36
@simon, given the above, is a Wyoming LLC still easier to handle than a UK LTD?
johncitizen
2018-12-01 01:58
Uk LTD seems a little trickier.
jase
2018-12-01 08:20
LTD or LLP?
johncitizen
2018-12-01 08:39
Honestly the Wyoming LLC is breezy. I?m having to do a petal income tax return for the UK LLP
johncitizen
2018-12-01 08:39
*personal
johncitizen
2018-12-01 08:42
Because I don?t have a national health insurance number it has to be a paper tax return.
johncitizen
2018-12-01 08:42
I?ve covered my address but you need to get a hold of this paper
simon
2018-12-01 08:47
@daniel UK LTD is a lot harder to handle, at least if it is a UK tax resident.
simon
2018-12-01 08:48
Although compared with most other countries, the UK is relatively easy.
jase
2018-12-01 08:58
The worst @johncitizen
greenard23
2018-12-02 11:44
Anyone have any experience with living in Europe and making taxes somewhat reasonable as I transition from sole trader to Ltd. I've been living in Asia for a few years and researching some scenarios, Uk Ltd living in Spain/Portugal, Romania/Estonia Ltd living in Spain/Portugal. tne general pattern is I wanna live in Spain or Portugal.
vinodgn0088
2018-12-02 23:44
@greenard23, with a Ltd you will have issues. Go for a UK LLP and live in Portugal under NHR scheme.
greenard23
2018-12-03 00:14
Hi @vinodgn0088 thanks for replying, LLP would probably be cheaper as well, would issues would there be? PE of the business?
asarun72
2018-12-03 00:48
@greenard23 go with WY LLC. Get a personal tax number with IRS. It?s called ITIN. Your Llc will have a tax number will called EIN. You may have to file 5472 but you may not owe any taxes but you may will depends on your tax residency
asarun72
2018-12-03 00:49
Say if you live in uae , Singapore , Hk you will pay no tax
asarun72
2018-12-03 00:49
The itin will help you opening a company bank account in USA than without it
greenard23
2018-12-03 00:57
@asarun72 cheers for the reply, I'm trying to move back to EU efficiently so don't think that will work for me. I'm in the above predicament less the LLC already.
asarun72
2018-12-03 00:59
You could instead chose to pay tax in USA and claim double tax treaty on that case
asarun72
2018-12-03 00:59
It?s only 21% in USA
asarun72
2018-12-03 01:00
You will end up reporting that on your country of residency but your tax liability will be minimal to nothing
asarun72
2018-12-03 01:01
And remember USA is not a signatory to CRS
asarun72
2018-12-03 01:01
USA is the biggest tax heaven in the world for non residents
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2018-12-03 06:45
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bigworld
2018-12-03 10:48
They are not part of CRS, but almost everyone else is part of FATCA... beware
vinodgn0088
2018-12-03 11:13
@greenard23, If you don't have Portuguese clients, Portuguese suppliers, no Portuguese staff (under payroll), and work from your home; You don't need to register a PE. The profit of UK LLP will be treated as your personal income and you need to pay Portugal taxes on it. If you are an IT professional and is under NHR you can pay flat 20% tax. Minimum social security payment needs to be paid (More can be paid if you like to do so) as the UK LLP income is deemed as a self-employed income.
greenard23
2018-12-03 11:27
Yeah I work in online marketing/web design, the angle I was trying to go at was paying myself in dividends that seem to be exempt from tax under the NHR if I have a pe, but all very grey. I believe Uk is 7.5% tax on the first 32k in dividends then pay myself a low wage...
greenard23
2018-12-03 11:29
Guess if I choose Spain I have 24% plus self-employment fee.
vinodgn0088
2018-12-03 11:43
@greenard23,
vinodgn0088
2018-12-03 11:45
UK LLP is tax transparent entity. UK-PT DTAA agrees this too. UK LLP don't have so called corporate tax or dividend things. If your plan is to register a UK LTD or something similar and get dividend make sure that the company is managed overseas. This is very difficult if you are an one man show.
greenard23
2018-12-03 13:00
Yep, that is my angle, Ltd and somehow show PE in said country, as I will not have staff, clients, an office. and will be away for months at a time from the country of residence. Doesn't seem to be clear-cut online. If you get taxed on dividends in the country the company is based (ex Uk) at a lower rate if your country of residence ( Spain or Portugal) let it slide or adjust so it conforms with the dividend tax rate there. Like UK, the first 32k seems to be at 7.5%, first 2k tax-free, which differs vs Spain and Portugal.
nnmatveev
2018-12-03 17:46
Hi all! Taxation in UAE looks promising from the first point of view but I see very rarely when somebody advice incorporate there (for online business). Could somebody explain me why?
danz
2018-12-03 20:56
@nnmatveev It is pretty easy to incorporate there. I would say finding banking for UAE offshore companies is a bit of a problem nowdays, banking cost end up more expensive than the company itself if you do a few transactions.
me1892
2018-12-03 21:05
Is it possible to incorporate a UAE offshore and then use a UK LLP (using the UAE company and yourself personally as partners) just for banking/payment processing purposes? Anyone doing this?
danz
2018-12-04 00:17
What is the benefit of that? You can just use the UK LLP then and have that company do all.
nnmatveev
2018-12-04 19:14
Got it, thanks.
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2018-12-05 08:45
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danz
2019-01-14 15:47
Does anyone have recommendations for a UK based accountant?
nnmatveev
2019-01-14 16:32
Hi! I am going to open a UK LLP with Estonian OU (owned by me) as the second designated member. I don?t have plans to use this Estonian company actively and at the moment it is only intended to play the role of the partnership member.
I have several questions regarding this.
1) Could I distribute 0% (or something around it) amount of profits from LLP to this company? Will I have any issues with HRMC in this case?
2) Could this Estonian OU company use profits received from the partnership to pay for services (software development) which are required for LLP? I am considering this as a way to withdraw undistributed profits from Estonian company. Does it look like the tax avoidance?
3) What is the minimum (reasonable) monthly salary for a board director of the Estonian OU company with small income?
4) Could you advise any UK LLP formation agent and a local business address service?
danz
2019-01-14 16:33
Simon can offer the formation
simon
2019-01-15 09:24
@nnmatveev 1) You can distribute 0% of the profits to a partner. The only requirement is that all profits be distributed.
2) Would these software development services be performed by you or by an unrelated service provider?
3) There is no requirement to pay any board member salary, regular salary or dividends. From a tax perspective, it makes a lot more sense to work for free and draw income from the LLP instead.
4) https://www.freedomsurfer.com/register/
nnmatveev
2019-01-15 09:34
@simonThank you! 2) By unrelated service provider, 1) & 3) How revenue agencies (both UK and Estonian) consider such actions? While it is technically possible they can consider it suspicious (my guess). Or is it a normal practice?
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2019-01-16 02:15
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2019-01-16 13:33
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simon
2019-01-16 16:02
@nnmatveev As long as they are legitimate business expenses, I see no problem here.
ivan.lakatos
2019-01-18 05:12
Hey guys. I'm a freelancer based in Beijing and my bank in Switzerland (i'm a Swiss citizen) is asking me for my Tax Identification Number in China. This is really out of the blue and i'm wondering why they would need it ? Does anyone here on slack live in China and knows how to get the Tax ID number ? I made some research and asked my previous company i've used to work full time for and they told me that my passport number serves as my Tax ID number. Does anyone have experience with this ?
ivan.lakatos
2019-01-18 05:13
Maybe I should move this message in Banking instead ?
simon
2019-01-18 10:02
simon
2019-01-18 10:02
According to this guide, you need to file a return or make a tax payment to be eligible to apply for a Chinese tax ID.
ivan.lakatos
2019-01-18 10:51
Thanks a lot for the link @simon
greenard23
2019-01-20 08:07
Not just you @ivan.lakatos my Singapore bank also asked for one. Your passport will not be enough, as I'm sure is outlined in the link Simon has provided.
ivan.lakatos
2019-01-20 08:11
Although, it says also in the link that "In some areas, passport numbers are also recognized as TIN for foreign individuals". Which is exactly what the previous company I've worked for has stated as well.
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2019-01-22 14:38
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imatfaal
2019-02-19 09:25
So I am moving to Tunisia soon and trying to work out my tax situation:
My company is a UK LLP owned by 2 x US LLC holding companies. I do consultancy work online.
Tunisia taxes worldwide income for residents and Tunisia-sourced income for non-residents. Tax rate goes up to 35% and corporate tax is also pretty high. My question is:
Regardless of whether I end up a Tunisia resident or not (comes down to whether I am there 183+ days per calendar year): As UK and Tunisia have a DTT, would my company be able to claim tax relief in Tunisia based on having filed tax returns in the UK (even if the tax rate I pay in the UK is 0%)? Or does this generally not fly?
simon
2019-02-19 12:16
@imatfaal This will not work as LLPs are transparent for tax purposes, they never pay any taxes on their profits (the partners pay wherever they live / are based). If you are a tax resident of Tunesia, your profits will likely be taxed there as personal income (not corporate).
vinodgn0088
2019-02-19 12:44
@simon, I want to setup a UK LLP with myself as first partner and a UK LTD owned by me as second partner. Don't have any UK clients and I am not UK resident as well. In this situation can I pay all profits to myself (paying personal tax in country of residence) and my UK LTD won't receive any profits. Does this kind of setup work? Do I need to draft a partnership agreement and get it legalized to avoid questions from tax man (like, Why UK LTD don't receive any profit from LLP?)
bigworld
2019-02-19 14:29
I think this won't work because the UK LTD is tax resident in the UK (unless it is tax resident somewhere else)
simon
2019-02-19 14:52
@vinodgn0088 @bigworld This strategy works as long as the LLP is managed from outside of the UK and no profit is attributed to the LTD.
vinodgn0088
2019-02-19 15:35
Simon, I know that once you used the same setup I mentioned and you switch UK LTD with Estonian OU. What was the reason for this switch? Also, when you had the similar setup did you created any partnership agreement mentioning profit shares of the partners. I know when you own everything the so called partnership agreement is just a joke. But still, is there any chance that without a an agreement, I might land into trouble; especially if I move personal tax residency to a strict country like Spain or Germany.
simon
2019-02-19 15:45
I switched to the Estonian OU as there was no point maintaining the LTD just for that role.
simon
2019-02-19 15:45
As long as you register the LTD as non-entitled to LLP profits (with HMRC), you will be fine.
vinodgn0088
2019-02-20 01:16
Thanks @simon
philhech7
2019-02-20 05:13
We run a UAE offshore IBC. Since most clients are Europeans, we are looking for a EU merchant account since I was told that EU banks will often decline payments to offshore merchant accounts. But you only get a EU merchant account with a EU company. So we are looking into setting up a UK LLP just for getting the merchant account. Question: Will we still be VAT-free if we keep using the UAE company for the day to day? We sell digital products only with manual consultations, so that was a way to keep us VAT free.
simon
2019-02-20 05:54
@philhech7 As long as the LLP is managed from outside of the UK, the UK VAT registration threshold will not apply.
simon
2019-02-20 06:02
EU VAT will not apply either as the place of supply remains the UAE.
philhech7
2019-02-20 08:59
Great, thanks so much! So it is not even relevant that we have the UAE IBC and we don't need some kind of "payment processing subsidiary contract" between the two as the UK LLP would be tax-free and not liable for any VAT (since it is managed from outside UK)?
simon
2019-02-20 09:10
Correct
philhech7
2019-02-20 11:46
Okay great thank you, I'll follow up with you via email for setting it up.
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2019-02-26 02:41
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riccardo.longobardi
2019-02-26 03:11
Hello All!
riccardo.longobardi
2019-02-26 03:12
we just opened with my partner a LLP in uk - currently I am living in TH and he is living in IT, does it make sense to create an offshore company for tax purposes or does it make sense to have me as director so taxes will be counted in TH law? or how does it work, thanks
vinodgn0088
2019-02-26 04:20
@riccardo.longobardi,Both of you can discuss together and draft a partnership agreement on what % of profits will be given to your friend. This way you can attribute more taxes in Thailand. Opening offshore company is no longer an option as getting bank account EMIs etc is very difficult.
riccardo.longobardi
2019-02-26 04:58
ok thanks - so as of now we are 50-50 and I will be the one that benefit the most in terms of taxes living here and he will under IT regulation correct?
vinodgn0088
2019-02-26 06:15
@riccardo.longobardi, I don't know whats your work. If you work while living in Thailand there are two legal concerns 1) Do you have a freelance or self employment permit?, Most of the nomad don't have it and still work. To be frank its not legal and Thais don't enforce it strictly is different matter. 2) If you work for LLP from Thailand, this is not a foreign income, as you are carrying out your work in Thailand. Technically this income should be taxed as per Thai local income tax rules. Again, nomads don't understand this thing and just treat it as foreign income. If you are living in Thailand for long term, do it in a legal manner.
riccardo.longobardi
2019-02-26 08:03
I am currently employed in TH for an international company - opening LLP in UK and operating in Europe market will be my side business.
vinodgn0088
2019-02-26 10:17
@riccardo.longobardi, In that case ask a local accountant about possibility of including your income from LLP as "Income from sources other than salary" on the income tax return
riccardo.longobardi
2019-02-26 10:52
ok thanks! I will check with the legal department
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sylvain156
2019-03-11 05:20
Hi guys! I've an offshore company in HK, i didn't do accountability, i'm going to do it soon. But I realized one of my customer (french) paid me with his paypal account, which is to his HK company. Will I lose my "offshore status" because of this ?
Thanks !
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2019-03-13 05:06
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immanuel.debeer
2019-03-13 05:23
If your customer is in France, I don't think it matters if they used HK account to pay you. Have you applied for 0% tax exemption? I've enquired about this with my HK accounting firm but they want a rather high fee to submit the application.
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2019-03-13 22:25
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greenard23
2019-03-18 07:02
Has anyone carried out a Thai tax return ( I'm a digital nomad)? I was wondering what supporting documentation you needed if any, as I'm getting mixed messages from the local tax office (not very clued up) and accountants alike. 1) Advisor said the PND 91 form will be enough, with no supporting documentation, as the authorities half assume the income was earned in the previous year. 2) dif advisor said I need to show the yearly salary and a withholding tax form from the country the earnings derive from. As I'm freelance this is pretty varied but mostly Singapore ( no tax paid there at source as not a resident). Should I have to go down the second opinion route I would look to prove that all monies transferred were from the previous financial year. How would this be done, just show your starting balance in 2018? As I don't have a separate savings account ( in hindsight I should have set one up to have some kind of 3-way flow of cash). Thanks all.
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me1
2019-03-22 18:24
Has anyone filed taxes in the US as a non resident while having to report a substantial number of stock and similar trades (I'm using wealthfront)?
me1
2019-03-22 18:26
I'm looking for 1. A confirmation that I won't have to spend a week looking up every detail of every transaction and filling out PDFs by hand. 2. Any idea if there's a company that will do this for me 3. How much should I expect such a thing to cost?
me1
2019-03-22 18:27
I'm already 13 transactions in, but it's not too late to shut down the wealthfront activity if it will simplify my tax reporting and avoid a huge cost (money or time)
simon
2019-03-23 00:28
@me1 As per the IRS ECI guide:
?If your only U.S. business activity is trading in stocks, securities, or commodities (including hedging transactions) through a U.S. resident broker or other agent, you are NOT engaged in a trade or business in the United States.?
No US income tax return has to be filed if no ECI was generated.
me1
2019-03-23 05:06
@simon wow ok, that's helpful. That means I'll be only 3 weeks of transactions to report, which might be a lot more manageable. How does cost basis tracking work out though if I'm switching from resident to non resident and eventually back to resident? Seems like that will get messy.
me1
2019-03-24 05:18
I guess it would be ideal to sell everything while non resident and then buy it again right after becoming resident again
simon
2019-03-24 05:48
If you bought 100 shares at 30$ each and sell them for 100$ each, while residing in the US, you will be taxed on the whole 7000$ gain.
When you bought them or how much they were worth when you arrived in the US doesn?t matter.
The only way around that is to sell them before moving to the US. Obviously, that?s only a good option if the country you live in at that time has lower tax rates.
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2019-03-27 14:29
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contact008
2019-03-27 16:11
Hi, I have a similar situation to that of Gman regarding living in Spain that was discussed on Dec. 2nd 2018, but I can't see if he found a resolution.
I am British citizen, currently living in Austria and working as a Sole Trader in the gaming industry, supplying Sports Data consultancy services to my one Gibraltar-based client.
However, I am considering moving to Spain, whose tax system for Sole Traders (autonomos) is just as regressive as the Austrian's, so I am considering a UK/Irish LLP (preferably Irish with Brexit in mind), along with an Estonian OU holding company set up, to help minimise some of the burden.
As I understand it, I would transfer the UK/Irish LLP profits to the Estonian OU, which would sit there fully until I decided to take a dividend, which would then be subject to 20% Corporation tax in Estonia, leaving the remaining dividend amount subject to personal Spanish income tax? I have a couple of questions; won't the Spanish authorities look to tax the company as if it was Spanish resident due to me conducting the business (PE) there? Also, would I not have to include my LLP/OU activity and assets on the Modelo 720 Overseas Asset Declaration form? Thx
vinodgn0088
2019-03-28 05:20
@contact008, Spanish tax department will consider your setup as a way to dodge taxes. Better you talk to a decent Spanish accountant first.
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2019-03-28 08:04
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contact008
2019-03-28 09:59
Thx Nomad. What is the difference then between my situation and the one Simon highlights in his blog? "UK LLP + Holding company -
Steve is a tax resident of Belgium. He owns 40% of Got Cha LLP, a business involved in the import / export of tea products. Other than being UK-registered, Got Cha LLP has no UK connection nor any resident partners..."
simon
2019-03-28 10:05
For a situation like that to work, the OU has to be seen as being managed from outside of your country of residence and all its income must be passive in nature.
It will be deemed a CFC and depending on the rules in place in your country of residence, you may or may not have to include its income on your tax return.
contact008
2019-03-28 10:10
Hi Simon, thx for clearing that up. I'll shelve that idea then.
contact008
2019-03-28 10:13
Not sure how anyone finds the motivation to do any work or a grow any business with the following ridiculous tax system: ?0 ?12.450 19%
?12.450 ?20.200 24%
?20.200 ?35.200 30%
?35.200 ?60.000 37%
?60.000 & Above 45%
contact008
2019-03-28 11:59
Would doing 6 months in Spain and 6 months in Austria help my situation? I provide online consulting services to a company that isn't based in either of the two countries.
simon
2019-03-28 12:04
Income generated while in Spain will be taxed there while income generated in Austria will be taxed there. Unless you have specific reasons for choosing those two countries, you could move to lower tax countries. Switzerland and Andorra, for example.
contact008
2019-03-28 12:10
Thx, will look into both. Had considered Malta and Portugal but getting paid by a Gibraltar-based company was an issue due to there being no double-tax treaty.
vinodgn0088
2019-03-28 16:02
@contact008, Better setup a base in Andorra and spend more than 183 days there. Remaining days you can spend in Spain.
contact008
2019-03-28 16:03
That's what I am looking at now. Can't work out whether or not I need to invest ?400k in the country though? There seems to be different residency options
simon
2019-03-29 04:32
@jase wrote a detailed guide about relocating to Andorra: https://jaserodley.com/living-in-andorra/ @contact008
jase
2019-03-29 07:47
There's a residence specific-guide here that explains the different types of residence permits: https://andorraguides.com/residency/how-to-get-residence-permit/
contact008
2019-03-29 09:00
Great stuff, thx guys. Seems I need to set myself up as an Andorran company, which shouldn't be an issue, though receiving payments from Gibraltar may be a stumbling block. This seems to cause headaches for quite a few places. I didn't even know where Andorra was until it was suggested here. Thanks again.
jase
2019-03-29 09:51
JM, Andorra has a lot of ties with Gibraltar
jase
2019-03-29 09:51
Also, you can get a Transferwise account for your company
jase
2019-03-29 09:52
Actually, Marc from that article has one himself
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2019-04-02 07:22
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contact008
2019-04-02 14:29
@simon "For a situation like that to work, the OU has to be seen as being managed from outside of your country of residence and all its income must be passive in nature." I presume having a UK director for the Estonian OU in place (a family member) wouldn't help me either?
contact008
2019-04-02 14:30
I am pursuing the Andorran suggestion but it seems my connection to the gaming industry is a red flag for the banks, and without a bank, there is no residency
vinodgn0088
2019-04-02 14:54
@contact008, If you turnover is not in millions and your family member remains (in Estonia) executes the majority decisions and 100% bank operations then it might work. Having a local (Estonian) employee and office might help to achieve some extra substance. But if you make Estonian company controlled in Estonia, you need to suffer 20% distribution tax.
contact008
2019-04-02 15:00
Thx Nomad. It's something for me to consider when Andorra reject me, which I think they will. I don't even want to pay myself any money, just don't want to give 45% to the greedy Spanish government
contact008
2019-04-02 15:04
On a similar note, I already have a UK Ltd set up, 100% owned by myself. If I was to make a UK based family member a director of this UK Ltd company, would it help get around the PE issue? I am aware I'd have to pay 19% CT to the UK, and I think I read somewhere there was a tax on dividend distributions, but it's still better than getting into the Spanish net
wowkroskar
2019-04-03 13:47
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wowkroskar
2019-04-03 16:22
Hi guys
I'm new here. I have a question I living in UK but I am originally from the Czech Republic. looking for the best way to tax forex investment. someone can advise me? What options i have? Thank you
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2019-04-06 07:38
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julianmb
2019-04-23 11:45
Hello
me1892
2019-04-23 12:01
:wave:
julianmb
2019-04-24 04:03
@wowkroskar maybe try to register as a UK LLP
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2019-04-25 01:25
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rtiagm
2019-05-05 10:59
I see that CRS discloses account activity, does anyone if that activity is just for the year the reporting is done or since the account was opened?
ivo
2019-05-05 11:22
@rtiagm Unless they have changed smth since the initial signing, it does not report activity, only balance and income generated on the account through interest or dividend payments ect for every tax year. Accounts opened after 01.01.2016 will be treated as new accounts. For those the entire information should be exchanged from account opening (differences may apply depending on the jurisdiction).
stbrownlow
2019-05-06 18:22
If one is a US citizen employed full-time by a US company (but working remotely, abroad) does the company have any visibility regarding one's taxes being filed for FEIE?
franklin.tradinglife
2019-05-07 00:22
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andycostesfr
2019-05-07 05:45
Hi everyone ! We have a UK LLP with my business partner, we are both french, and soon we'll have our financial residency in Hong Kong. We recently saw a Business Tax Advisor in London. We made the mistake to tell him that we have a bit of sales in UK (below the VAT threshold). He told us that we have to make the HMRC tax return at the end of the year (20% on profit) and so, do bookkeeping of our activity.
As @simon has written on Freedom Surfer, ?Because an LLP is a tax neutral entity, this exemption also applies to foreign-sourced income generated through one. This means that, in practice, it is possible to run an LLP without having to pay any UK taxes, provided that there is no UK-sourced income and that all partners are non-residents.?
My questions are :
1. Is there any way we could not have to do this tax return (knowing that we have sold a bit in UK) ? (We stopped selling in UK to avoid to pay VAT).
-> If the answer is ?Yes if you provide proof that you are non-residents + provide that there is no UK-sourced income?, then
2. If anyway, we have to make this tax return. Do we have to do it only on UK-sourced-profit or on all our sales (of every country we sell to) ?
simon
2019-05-07 12:07
I think your accountant confused income from UK customers with UK sourced income (from work performed in the UK).
Selling to UK customers from abroad does not create a UK tax liability in and of itself (except for VAT, depending on your products / services).
So to answer 1 and 2, there is no income to report on a UK return if you do not reside / work in the UK and do not generate unrelated UK income (for example, from a rental property).
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jor.acker
2019-05-11 10:41
Yo guys, I'm from France and I play poker online, I've been moving around for 3 years not leaving in France but not staying anywhere more than a few months (also don't have any estate or revenu from france or whatever)
Last year I did a working holliday visa in hong kong to be able to change my official residency adress there, which I did I got a official certificate that I reside out of France, valid until 2023
I stayed only 1 month in Hong Kong and still move around now, mostly Thailand and Japan, and around Asia
Recently I received my tax declaration form from France and filled in my adress change to Hong Kong
My concern and question is, now is the french IRS going to communicate to the HK/China IRS that I officially changed to there and then the China IRS is going to ask me some accounts ?
I ask this also because i don't make that much and don't live in France so i'm not an interesting target for french IRS anyways so there's really little risk for me to just keep my adress officially in France, so not puting the adress change in the declaration website is a valid option (I can still change the declaration for 2 weeks)
ivan
2019-05-11 14:14
Guys, some questions here about VAT:
1. Selling digital services with an LLP to countries within the EEA means paying VAT in the customer's country?
2. Selling digital services with an LLP to countries outside the EEA means you don't owe VAT in UK nor anywhere else (unless the customer's country has some other sales tax)?
3. UK's VAT threshold is calculated on gross sales to EEA countries or accounts for all your gross sales?
danz
2019-05-11 14:21
@ivan Are you talking about an UK LLP? You can register for VAT in the UK. You don?t need to charge VAT to other countries in the EU on the invoices as you can shift the VAT, so you can put VAT Shifted in the invoice and have 0%. That?s if your selling to businesses, if your selling to persons, you need to charge VAT on the invoice. So that?s why the VAT registration might be necessary. 2. I believe correct. No need to charge VAT outside of the EU.
ivan
2019-05-11 14:25
Thanks @danz. Yes I was talking about an UK LLP. I'm in B2B but not all of my clients are incorporated so I'd need to be careful with that then.
That said, I almost never sell to Europe, I sell in the Americas mostly. So in that scenario I wouldn't owe a thing, right? Not even need to register?
danz
2019-05-11 14:29
You have the option to register for VAT in any of the countries in the EU you sell most to I believe, but just registering in the UK will be easier. If your just doing B2B mostly, you should be fine. We are the same situation basically, 99% is B2b, just a random invoice with 20% VAT. If your only selling to the US, that?s even easier then as you don?t need to deal with VAT.
ivan
2019-05-11 15:07
US, Canada and Latin America mostly.
ivan
2019-05-11 15:07
Thanks Danz.
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2019-05-15 10:09
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yura-by
2019-05-20 20:39
Hi! Does anybody here knows, if you are a tax-resident in Georgia, will they tax you for:
1. A freelance job you did over internet for a non-Georgian company while physically staying in Georgia? In other words, do they treat it as a locally sourced income or as a foreign income?
2. Selling cryptocurrencies for fiat money?
3. Do they ask some papers proving no debts to tax office upon leaving the country for people who stayed more than half-year?
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2019-05-21 00:40
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simon
2019-05-21 06:46
@yura-by 1. This will be treated as locally-sourced as the work was performed locally. 2. This will depend on a number of factors, see the attached scan. 3. I'd be surprised if they do, most countries do not.
yura-by
2019-05-21 14:41
@simon Thank you! So if I understand the table correctly, selling crypto is capital gains and it is not taxed if I bought and owned it for more than 2 years, otherwise it is taxed 20%. Right?
simon
2019-05-21 16:08
@yura-by Yes, as long as it was all private and not part of a business activity (in other words, the coins are yours and were held for your own benefit).
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2019-05-21 19:42
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yura-by
2019-05-22 01:37
@simon 1. Does crypto trading is also taxed even if no fiat involved and less than 2 years passed between trades? Eg., exchanging Bitcoin for Ethereum after holding Bitcoin for less than 2 years.
2. Is it legal to work for cryptocurrency while in Georgia? Will they tax it if I do not change it to fiat?
simon
2019-05-22 12:48
1. Yes, just as with any other financial instruments. 2. That would depend on the visa you hold I guess, and whether your trading is short term or long term. 3. Yes, you must report any qualifying capital gains as part of your income.
claudemir.andrade2
2019-05-22 19:17
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thy
2019-05-23 19:35
@yura-by Check the options of incorporation in Georgia. For example, LLC with ?virtual IT free zone? exemption is fully exempted from taxes in Georgia. There is also freelance incorporation possible - ENP (Entrepreneur Natural Person) who pays 1% tax for most cases (and up to 3% if earning over 166K EUR yearly).
yura-by
2019-05-23 21:26
Sounds good, thank you!
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imatfaal
2019-06-03 08:35
I am confused about my upcoming tax and residence situation. Please could someone help? Below are the key details:
1) I am currently a resident and paying tax in a very undeveloped country in Sub Saharan Africa. I have a residence visa here that runs until June 2020. Let's call this Country A.
2) I am actually leaving this country in August 2019 and moving to a much more developed country in North Africa. Let's call this Country B. My partner will be resident and working there. I do not intend to take up residence there (officially) as I will be flying in and out a lot working on consultancy projects globally.
3) I am setting up a new company in another undeveloped country in Sub Saharan Africa this month. I will not spend more than about 30 days a year in this country though. Let's call this Country C.
This seems like a classic digital nomad question: where exactly am I / should I be resident for tax purposes? I will probably spend the most time in Country B between August 2019 and June 2020, but I cannot spend more than 180 days there per year without falling foul of their visa laws.
I have 2 x EU passports but never spend more than 90 days in either of those European countries. I own no properties anywhere. My work is carried out wherever I happen to be at the time, using my laptop (which will end up being a mix of Country B, Country C and a load of other countries in Africa and the EU next year). It's B2B consultancy, paid into my UK LLP.
Any help would be much appreciated!
vinodgn0088
2019-06-03 12:15
Without knowing the country names it will be difficult to determine tax residency
ivan
2019-06-03 21:29
@imatfaal, you should review country's A tax residency law. Chances are you lose it automatically after spending more than one year there - for most developed countries you lose it only after getting a tax residency elsewhere. if you can lose it just by spending >1 year outside that country with no local ties and you spend less that 180 days within country B (you need to review that country tax residency law as well) you might be able to not pay income tax anywhere. Sales taxes are another story, though. You might owe those in the countries you sell.
otkeedca
2019-06-03 23:57
Hey folks, I'm hoping someone can help me clarify cap gains when resident in a territorial taxation country.
If I open a brokerage account for my US LLC, then I will be subject to withholding tax in the US as well as capital gains tax in my country of residence. Is this correct? Is there a structure to avoid this?
simon
2019-06-04 10:07
@otkeedca Dividends received from US companies are subject to a 30% withholding tax. Most other forms of investment income is not subject to US taxation. Using a US LLC makes no difference here.
mikeseo
2019-06-04 10:29
some of the high dividend shipping companies on the NYSE don't have dividend tax withholding like KNOP because they're incorporated offshore
bigworld
2019-06-04 10:34
@simon to avoid tax withholding, does the parent company need to be incorporated in a jurisdiction with a tax treaty with the US, or can be made it with a parent company in Panama?
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2019-06-04 17:28
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2019-06-05 07:09
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simon
2019-06-05 11:24
@bigworld Even with a tax treaty, you will likely pay withholding tax. Here's a list of countries and their treaty rates: http://taxsummaries.pwc.com/ID/United-States-Corporate-Withholding-taxes
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2019-06-05 12:38
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imatfaal
2019-06-06 07:57
@vinodgn0088 @ivan @simon Country A is Madagascar. Country B is Tunisia. Country C is Mozambique. Hope this helps with clarifying my situation!
vinodgn0088
2019-06-06 10:10
@imatfaal, My views are
1) If you are leaving Madagascar on Aug 2019 by canceling your residence visa then you tax liability to Madagascar ends there as you don't have a permanenet home or family there.
https://sataxguide.wordpress.com/madagascar-taxes-overview/
2) For Tunisia, you can escape from becoming a tax resident there if you don't have any Tunisian sourced income and don't spend more than
183 days in Tunisia per year. i.e, you need to create a tax residency in another country and make sure you have enough substance in another country like a rented/fixed home. Local business or salary from that country.
Else, Tunisia can claim you as a tax resident for the point "Center of vital and economic interests"
3) For Mozambique, If you plan to stay only 30 days in a year your personal tax residency in Mozambique is non-resident. Then your personal income from your Mozambique incorporated
business will be taxed by Mozambique at non-resident's rate and this can be reduced by using a DTAA agreement and by taking profit as dividends. A Mozambique incorporated
business is by default considered as tax resident in Mozambique. However you need to make sure to have enough substance in Mozambique; Otherwise country of your personal
residence might claim that the company is tax resident there as well.
Please note that this is 2019; Almost all banks have started asking for personal tax residency details because of CRS. So you can't be tax resident of nowhere.
imatfaal
2019-06-07 09:05
@vinodgn0088 Thanks for this. I get the feeling that I will try to avoid becoming Tunisia resident, mainly because I imagine the paperwork involved with getting a resident visa in Tunisia would be a major headache. However, I will be spending a fair chunk of time there, and paying tax on the work I do in-country as a non-resident (they do not tax income derived outside the country for non-residents)...
However, if the other 183 days of the year are spent jetting all over the place for work, then where am I a resident and therefore tax resident? My business only needs a web connection, no assets, no property, no employees. I will not be renting a property while in Tunisia. From the point of view of my UK LLP, I would owe tax on UK-sourced income (almost none), and stuff sourced outside the UK is of no interest to HMRC. Who am I supposed to pay and how?
vinodgn0088
2019-06-07 09:22
@imatfaal, If you plan to remain non-resident in Tunisa where you plan to establish tax residency? Your profit from UK LLP is taxable where you are personally tax resident. But this is not the case in some countries where a UK LLP is treated as a corporation and liable to corporate tax .Being a tax resident of nowhere is not recommended anymore. What you need to do is become a tax resident in a country with territorial taxation and get a personal tax residency certificate from there.
imatfaal
2019-06-07 09:55
@vinodgn0088 I guess one approach would be to become tax resident in the UK (where my LLP is registered anyway, and which has a double taxation convention with Tunisia for Corporation Tax and Income Tax)? However, I think I would struggle to establish my residency there given there's no way I would spend 183 days per tax year there...Also, would that not mean that all my profits from LLP would fall under UK tax, even if derived from work carried out outside the EU?
I can't think of a Plan B at this stage. Any suggestions on how to get residency in a country with territorial taxation when I don't intend to spend much of the year anywhere beyond Tunisia?
vinodgn0088
2019-06-07 10:08
@imatfaal, If you establish UK residency then your UK LLP's whole income will become liable to UK personal tax. A good option in Europe is Cyprus. Go for the non-dom route (90days stay in Cyprus required).
imatfaal
2019-06-07 11:00
@vinodgn0088 Thanks for that clarification. probably a no on becoming UK resident then. Afraid I cannot commit to 90 days stay in any country. Definitely not Cyprus where I have no ties and no business meetings to attend. Would Estonia's e-residency program work for me? I've only read a little about it.
It seems at the moment my issue is not avoiding Tunisian tax (in fact, getting residency and paying tax in Tunisia would be a good option). However, getting the residency in Tunisia in order to pay the tax as a self-employed person would be a massive hassle in terms of bureaucracy....
vinodgn0088
2019-06-07 11:30
@imatfaal, Estonia e-residency is just an ID allowing you to operate and manage an Estonian company. With an Estonian company getting a corporate bank account will be difficult if you don't reside and have substance in Estonia. Also, Estonian banks don't have USD support. Even though Estonia don't have corporate tax, you will suffer 20% distribution tax. Rechecked and Cyprus non-dom tax residency can be attained with just 60 days of stay. If living in Cyprus is a problem, then its better you find in which countries you can actually spend some time to get tax residency.
imatfaal
2019-06-07 12:08
@vinodgn0088 Ah OK. I think I have misunderstood what e-residency was (it does not confer tax residency status). Will have a think about what the plan is. Maybe Tunisia it is!
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2019-06-07 14:55
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2019-06-07 16:48
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2019-06-08 10:26
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stolzlos
2019-06-08 13:00
does anybody know if Saxo offers a feature to generate a report for an *annual realized P/L* including short term and long term trades information?
stolzlos
2019-06-08 13:01
US Brokers offer that but I have not been able to find that with my Saxo account.
max
2019-06-08 14:31
Hi guys, I wanted to get your opinion on the subject of combining residency in Portugal along with their NHR program and income sourced from an Estonian company. This article from Blevin Franks states https://www.blevinsfranks.com/news/article/non-habitual-resident-regime-NHR-Portugal-tax-advantages that ```Under NHR, most income from a foreign source is exempt from Portuguese taxation for ten consecutive years, as is income that is taxable in another country.
This means that British expatriates can potentially receive UK pension income, rental income, capital gains on real estate, interest, dividends and non-Portuguese employment income tax-free.
Importantly, this can apply even if the income is not actually taxed in the home country. UK dividends, for example, (but not gains on UK shares) escape Portuguese taxation under the NHR scheme because they are taxable in Britain under the UK/Portugal double tax treaty. In practice, however, 'disregarded income' rules can eliminate UK tax liability for non-residents. As a result, you could end up paying no tax ? in either country ? on the income.```
max
2019-06-08 14:40
Sounds like one could be drawing income from an Estonian company completely tax free and still maintain EU residency at the same time. That would be amazing
vinodgn0088
2019-06-08 16:09
@max, Wow easy way, Isn't it? Better search in Google about aggressive Portuguese tax department. If someone plan to run a foreign company while holding a Portuguese residence permit make sure to have lots of substance for their foreign corp including but not limited to real office in foreign country , two or more local directors (not nominees) etc.
max
2019-06-09 15:40
@vinodgn0088 not really finding anything in particularly on ?aggressive Portuguese tax department?, could you share perhaps a link?
max
2019-06-09 15:40
If the Estonian company made no money how would that affect me? I would simply be employed there so again I am not seeing the problem combining it with NHR
vinodgn0088
2019-06-10 01:20
@max, A Estonian company managed and controlled from Portuguese soil is considered as tax resident in Portugal by "place of effective management rules". Also, if you are working for a company tax resident in Portugal and the work is done from Portuguese soil you owe personal/salary tax to Portugal. The only work around is having a physical office in Estonia, having resident local directors (with decision powers) in Estonia and taking out profit as dividends.
me1892
2019-06-10 01:35
@vinodgn0088 Even if you had significant presence and nominee directors in Estonia you'd still run into Portugese CFC rules if you owned the majority of the shares wouldn't you?
vinodgn0088
2019-06-10 01:54
@me1892, You need real local directors, not nominees. These directors must have authority to take decisions and also must have access to corporate bank accounts. Also, Estonia is part of EU and 20% CIT is greater than 60% of Portugal's CIT. Because of these conditions, Portugal can't apply CFC rules.
me1892
2019-06-10 01:56
Ah, I see - fascinating. Thanks @vinodgn0088
max
2019-06-10 07:18
@me1892 @vinodgn0088 thanks or elaborating! Would this work I had no direct / indirect shares / ownership in the Estonian company? What if my sister owned the company? (wondering if there there any rules against that)
vinodgn0088
2019-06-10 07:33
@max, What is your citizenship? More specifically are you a EU citizen with right to work in any EU country? Are you trying to achieve 0% tax or how much you are willing to pay towards tax?
max
2019-06-10 07:34
@vinodgn0088 Yes I have EU passport and I am free to work in any EU country, but I work remotely, have clients in UK, US, Canada, Australia
vinodgn0088
2019-06-10 07:54
@max, If you want to live in Portugal full time, you best way is creating a UK LLP and taking out profit through it. You need to apply NHR and so that you can get 20% flat rate tax if you are an IT professional. Try to take profits as interim dividends in irregular periods. I spoke to an accountant and since the source of income is not Portuguese and you are trading using LLP you are not liable to social security taxes on these income. If you don't plan to live in Portugal more than 90days in 180 days I think its best to base somewhere else. Cyprus offers non-dom, you need to stay minimum 60 days there and don't spend more than 183 days anywhere else. For an EU passport holder with nomadic lifestyle Cyprus is best as for non-dom all you face is 12.5% tax and no further dividend tax on it ( just ask someone and reconfirm this)
max
2019-06-10 07:56
@vinodgn0088 cheers, I already have residence in Panama
vinodgn0088
2019-06-10 07:58
@max, If you want to come back to EU, paying zero tax is very difficult I guess.
max
2019-06-10 08:00
I find it cheaper to buy two vacation houses (condos) in separate EU states than becoming a resident in one
max
2019-06-10 08:00
Never spending 183 days in each
vinodgn0088
2019-06-10 08:01
@max, be careful. Having a permanent home is also considered for tax residency.
max
2019-06-10 08:02
Correct, fortunately the Portuguese make it rather difficult to become a resident. I acquired their NIF as non EU, and I will most likely have the places rented most of the time
vinodgn0088
2019-06-10 08:03
@max, yes renting is much better option.
martin
2019-06-10 22:03
Have you considered Malta?
ivo
2019-06-11 18:16
@yura-by @simon This is not correct exactly.
1. Whether it is taxable in Georgia or not depends on the place of delivery. If you work for a non-resident company as part of a greater project that is outside of Georgia, the income will be treated as foreign income. If you simply perform tasks for a non-resident company while the place of delivery is inside Georgia, you are taxed here.
2. private Crypto gains are not taxed in Georgia, regardless of the holding time (as well as all other capital gains that are of derivative nature or not traded on a Georgian exchange).
3. You can apply for tax certificate from the Revenue services, provided you have registered as work resident and stayed the 183 days. But nobody cares much about what you do as a foreigner, esp when it is done under your private name.
ivo
2019-06-11 18:26
@yura-by @simon 1. see previous reply. 2. There is no proper security framework in place, thus all operations are tolerated when done as a natural person. You should avoid doing it as a legal entity. 3. While technically correct, the only capital gains that you are required to report are those realised on Georgian assets. You do not need to report foreign capital gains. You may (and actually may want to) report them.
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2019-06-11 18:58
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2019-06-12 11:49
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2019-06-14 16:14
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2019-06-14 16:57
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2019-06-15 10:46
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2019-06-18 13:08
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stolzlos
2019-06-22 14:44
does anybody have experience here how to do taxes on cryptos when you are missing data because of exchanges that went down?
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2019-06-22 18:35
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chrisredhead
2019-06-27 09:15
I live in Portugal and the problem I have is paying IVA(VAT) on all income received when the income in non liable to VAT elsewhere. What are your thoughts on the income to be paid to a US LLC in Wyoming for example to avoid the 23% IVA and Portuguese company expense restrictions ? Then pay tax on personal income brought in to Portugal.
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2019-07-02 20:41
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2019-07-03 09:26
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vinodgn0088
2019-07-03 10:56
@chrisredhead, if you don't have any Portuguese clients/suppliers and don't have a dedicated office space in Portugal, then you can create a US LLC and bypass the PT company expense restrictions.
frankking789
2019-07-03 21:05
Does anyone have any experience with Hong Kong taxes?
I'm a Canadian citizen looking to set up a company in Estonia and use it to pay myself a salary while I live and work from HK. From what I understand HK has a 0% tax rate on income earned overseas. Since my pay will be coming from overseas (company established in Estonia), would I qualify for this?
I do affiliate marketing so I'm not selling any services or goods in HK. And if I don't qualify for this what would be considered "income earned overseas" in HK?
burrup.lambert
2019-07-04 00:53
I think @simon could definitely have something to say about this one.
simon
2019-07-04 08:09
@frankking789 Income earned overseas, in the context of HK, refers to income earned while physically outside of the SAR (or via a foreign permanent establishment). Will you be doing most of your work from HK? (for the Estonian company)
benjamin
2019-07-05 08:11
Hi guys, Long time.
Quick question on this scenario.
1. Estonian Company + Pay out all Profits as a salary.
2. Residence in Thailand + Travel outside of Thailand 1 week per month.
3. Getting paid in that 1 week as though I was working while on the Road (therefore "not working in Thailand")
Would that cover all bases and essentially be tax free?
Am I missing anything here? OR do you have a better recommendation for living in Thailand tax free while still working on my online business. Open to any structure that will allow me to live tax free in Thailand but still be working.
Any help appreciated :smile:
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2019-07-05 11:17
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vinodgn0088
2019-07-05 12:44
@benjamin, Not a nice idea. Much better setup would be a Georgia company in so called IT freezone along with a local staff.
vinodgn0088
2019-07-05 12:46
Then fly couple of time a year to Georgia to put some meeting in records. Take your profits as dividends. Much safe way. Very important thing is no office in Thailand, no Thai clients and don't even tell someone that you are working from Thailand home. Just act like you are boss and your Georgian worker is doing the works
ivan
2019-07-05 14:52
@benjamin. I agree with Nomad Dude. If you serve your company as an employee it will be obvious you work from Thailand. The problem is not where you're are when you get paid, but where you do the work from. Now if you got paid as a subcontractor who occasionally travels on-site and do the work and get paid it might make more sense.
mikeseo
2019-07-05 20:05
why tell Thailand you have an income?
benjamin
2019-07-07 21:10
Thanks for the responses :slightly_smiling_face:
@vinodgn0088 What is the main reason for suggesting Georgia? What is the tax liability be on the dividends?
@ivan I see your point, I do agree that if I'm an employee it will be harder to prove that I am not working from Thailand.
@mikeseo My only reason is that I want to pay a small amount of tax in Thailand to keep Australia off my back if they ever try to come after me. If I'm residing and paying tax somewhere else, I think it will be a safer bet for the future.
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2019-07-07 21:36
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mikeseo
2019-07-08 05:15
@benjamin https://iglu.net/how-freelancers-can-work-at-ease-in-thailand/ what if you ran a small portion of your money through them (because they take 30%) but you would get a legit visa and foreign tax residence for australia tax purposes?
mikeseo
2019-07-08 05:17
does AU want to make sure you're paying tax on all your money or just that you're a real tax resident of another country?
benjamin
2019-07-08 10:03
@mikeseo I've thought about using Iglu but I'm undecided on it so far. Iglu have a minimum of $2500/month you have to bill through them, Which when its all said and done will cost around $9000USD/year in tax, visas, etc...But it will be legit and come with a work permit etc.
The problem I see with that is your work permit technically only allows you to work for Iglu, so to be 100% within the law I'd have to run all money through Iglu and therefore pay 30%.
Although, risk is extremely low of anything ever happening to do with Tax in Thailand, I'd still love to play the game correctly - I'd hate to get stung 5 years down the track if they actually start enforcing the law.
AU just want me to be a tax resident somewhere and have a legit home, I've never heard of them going after someone once they become AU non tax resident if they have established ties somewhere else. The problem is for people who still have ties to AU or do the perpetual traveller thing.
ptuvang
2019-07-08 20:08
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salim
2019-07-08 20:08
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eov
2019-07-09 01:55
is Canada OECD compliant? I know they are a member and have agreements with many countries...but if they are not compliant they don't receive corresponding information from other countries.
frankking789
2019-07-09 10:03
@simon yes, in my case, I will be doing most of my work from HK. Also what does SAR stand for?
kuka
2019-07-09 10:17
Special Administrative Region
kuka
2019-07-09 10:18
If UK LLP partner (me) is to gain a temporary residence in other country (Canada in my case), at what point does the taxation event occur? Anyone has experience doing that?
ivan
2019-07-09 15:06
Is Iglu legal? Sounds like a business model that could be replicated in many countries. But I wonder if countries with more stric government would overlook on something like that.
ivan
2019-07-09 15:11
@kuka, It would depend on your current country income tax laws. It probably requires you to get a permanent residency elsewhere and cut all ties, after which you can ask the government to stop considering you a tax resident.
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2019-07-09 17:47
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simon
2019-07-09 20:52
@frankking789 If most of your work is performed from HK, it will likely be deemed local and taxed as such.
frankking789
2019-07-10 14:22
@simon thanks for clarifying that for me. Btw, could you tell us what kind of structure you're using as a digital entrepreneur?
mikeseo
2019-07-10 15:26
dunno but ya that would be a interesting upsell from coworking offices, offer a visa and legal taxation and local bank account
kuka
2019-07-11 08:35
I might have been unclear. I meant the tax implications of me moving to another country (Canada) as a UK LLP member. Since UK LLP generates some income, when does the taxation occur once I?m in the new country? Does the previous fiscal year when I was in previous country is taxed in the new country?
ivan
2019-07-11 13:55
Yes, I understood that. But the moment you start owing taxes on Canada will depend on when your current tax residency country accepts you stopped being a resident.
It will probably depend on the type of residency as well, does it allow you to work? If so, it could be that the very moment Canada gives you the residency you can request to lose your current tax residency.
That said, I'd speak to a tax attorney in both countries if I were you.
ivan
2019-07-11 13:56
Because you could be in double taxation zone if you're not careful.
kuka
2019-07-11 13:58
Makes sense! Thanks!
ivan
2019-07-11 14:03
No problem!
simon
2019-07-11 14:43
@frankking789 I have companies in multiple countries and use the 60 day exemption in HK in combination with perpetual travel to keep my tax burden to a minimum.
michael
2019-07-13 00:57
Does anyone have a good company accountant they can recommend for Thailand? As business associate in BKK is asking.
stolzlos
2019-07-13 08:56
last week I went to see a tax lawyer in regard to cryptos and learned some interesting stuff
stolzlos
2019-07-13 09:02
the reason for that is because German tax authorities are *already using exactly that tool* and he says that they know how to deal with it. He says using it just avoids unnecessary trouble.
stolzlos
2019-07-13 09:04
When I asked how many people are asking for help, he said its very few only. He estimates that more than 99% of the people are not dealing with the issue and fail taking it serious.
stolzlos
2019-07-13 09:05
He also told me that he does not think that anybody will get away. Eventually (German) tax authorities will catch up with every one even if not owing much to slap them with some fine. Since tax debt has a statute of 10 years here, they have enough time to catch up, he says.
stolzlos
2019-07-13 09:08
When asking how Germans doing crypto in some sort try to shelter themselves he said that it seems to be popular to use companies in Holland and Malta but that only works if you are more than half out of the country which is the biggest hurdle for a lot of people.
stolzlos
2019-07-13 09:13
What was also surprising is that crypto gains are not taxed with capital gains but via income tax (crypto trading considered a business transaction) in Germany. Further, because of that fact capital gains (or losses for that matter) cannot be compensated with P/L in crypto. That was quite a stunner. If you lose 10k in Crypto but make 10k in stocks you pay for 10k profit! But he also said that this may be a special case for Germany. Tax authorities are still in figuring out mode.
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2019-07-15 08:06
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2019-07-15 08:39
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benjamin
2019-07-16 13:58
@ivan It's 100% legal. When you look at what it is on the surface though, it's really just the creation of a loop hole. I wouldn't be surprised if it's service gets stopped eventually. Not anytime soon. But eventually.
ivan
2019-07-16 14:05
Yes, it's definitely a loophole in the migration law. But there are many other countries with a similar work visa law. What is stopping people of attempting this in Australia for example?
mikeseo
2019-07-16 15:36
maybe quotas or the immigration office won't approve any more employee visas if the company is abusing it?
ivan
2019-07-16 16:16
Makes sense.
benjamin
2019-07-17 04:45
It's truly an amazing business model for iglu. Great business for them. It could definitely be replicated in other countries providing immigration are okay with it.
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2019-07-17 06:22
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elsamadrolle
2019-07-17 07:05
Hi all.. I?m new and wanted to get some advice.. I am a French citizen, currently a U.K. tax resident and London property-owner. Been in the U.K. for over a decade but only recently moved from being an employee to a company director. I started a Ltd company last year and currently pay corporate taxes and dividend taxes. My clients are in Japan and Taiwan (the latter paying via a Cayman entity to avoid the withholding tax).
I am trying to sell my property to leave the U.K. given Brexit etc.
My questions are as follow:
1) is there a way of optimising my tax situation immediately - is ahead of being able to leave the U.K. permanently?
2) I had high hopes for the Portuguese NHR program but I guess being the sole owner/director of my consultancy, I will struggle to not get the dividends taxed (assuming I kept the U.K. Ltd company and just took the corporate tax hit).. am I correct in this analysis or is there a workaround I am missing?
3) in your opinion what is the best EU residency vs tax situation I can aim for? My parents are in France and I need to stay relatively close to them (though have no problem travelling a couple of times a year anywhere, I travel a lot globally as it is).
Thank you!!
ivan
2019-07-17 12:40
@elsamadrolle, Andorra sounds like an interesting option for you as well if you enjoy nature and small cities. Can you close the UK corporation and open it in another country?
elsamadrolle
2019-07-17 12:45
Yes absolutely could do that and my clients told me they don?t really care where I?m based. Andorra may be a bit far from an international airport but I will certainly look into it, thanks
ivan
2019-07-17 18:42
Yes, that's true, you need to move to Barcelona for that.
ivan
2019-07-17 18:42
And it's a long ride.
ivan
2019-07-17 18:43
The UK ltd will pay taxes regardless of where you are, so you'll need a different type of company. Could be an UK LLP, US LLC, Estonian corp, or even an IBC somewhere, one of your clients is doing business from the Caymans so that might not be an issue for them.
ivan
2019-07-17 18:44
The more complicated issue is going to be your tax residency, you'll need to get another one to stop owing taxes in the UK.
ivan
2019-07-17 18:45
Could be Andorra or many of the residence options Simon discusses in his blog posts.
ivan
2019-07-17 18:46
You normally need to process credit cards payments or bank transfers are all right?
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2019-07-19 07:15
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2019-07-21 10:41
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2019-07-24 14:09
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leo.kipfelsberger
2019-07-24 17:47
Hey Team!
I was wondering whether any of you have experience with the following:
I have recently setup a single member wyoming LLC and most of my clients are based in the US, despite the fact that I am never physically located in the US.
How would taxation work in that scenario as my business and clients are US based but I dont conduct any work physically in the country.
After chatting with @simon he mentioned I would not be liable to US taxes - I am curious as to how I submit my tax statements next year and making sure to state everything clearly so as to not have the IRS up my ass.
I would be grateful for any pointers!
simon
2019-07-25 01:32
@leo.kipfelsberger You do not need to file a US tax return / apply for an ITIN if you have no US ECI (US-sourced income). The IRS defines US ECI as income derived from work performed while physically in the country.
https://www.irs.gov/individuals/international-taxpayers/effectively-connected-income-eci
kuka
2019-07-25 06:32
Aren?t there some returns to fill in to get an ITIN for those who do not derive income from work performed in the US?
simon
2019-07-25 06:38
@kuka No, although if you do not file a tax return your ITIN will expire after three years.
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2019-07-25 06:46
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internationalbits
2019-07-25 06:52
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leo.kipfelsberger
2019-07-25 09:52
Thank you @simon! those are pretty great news! So I wont have to file any US tax forms next years if no income has been US sources while in the country?
Literally I wont have to send in ANY docs or just a declaration that no US ECI has been collected?
simon
2019-07-25 09:58
@leo.kipfelsberger Nothing has to be sent to the IRS (other than form 5472 but I handle that).
leo.kipfelsberger
2019-07-25 12:18
Ok great! Thank you so much for the quick replies as always!
kuka
2019-07-25 13:59
$25k fine for missing form 5472 is a tad too much, wow
simon
2019-07-25 15:46
That?s the starting fine, it doubles after a few weeks!
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2019-07-26 05:20
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koshis
2019-07-26 18:11
Hi guys and gals,
Does any one know if a Canada corporation (Quebec) is anonymous, as in keeps directors/managers, and members/shareholders names off the public register?
I've just seen the below listed on a incorporation provider website and was a bit surprised but can't seem to find much validating the info.
_________________
Information published relating to company officers:
Upon registration of the company, the names of company officers will not appear on public record.
Confidentiality:
Canada offers a high level of anonymity and privacy.
Source: https://www.sfm.com/canada-company-formation
reach
2019-07-27 01:31
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intern
2019-07-27 01:35
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grecoroman1
2019-07-27 06:00
Hello Everybody!
Are there any US persons ( don?t know if that?s the politically correct way of referring to US citizens or dual citizens of US ) who have expatriated from the states? Will have an online services business husband and wife ( 2 person operation ) with all customers in the states. We have the citizenship based taxation problem, but if you stay outside the USA for 11 out of 12 months you qualify for foreign income exclusion of 100k single or 200k married joint.
If you couldn?t live perpetually traveling or as a digital nomad but more like a settled expatriate ( 183 days in one country and rest of year in one other ). Saw a YouTube video with Simon being interviewed and they touched on the subject for people with a family who couldn?t perpetually travel( kids school etc. )
Would a good tax strategy be to form a company in one country ( like Belize ), live in a second ( territorial ) like Costa Rica 183 days ( for tax residency ) , live rest of year in third country ( EU ) and hire an independent contractor there ( or somewhere else) to run most of the day to day operations? Wife is EU citizen. Assume we could get residency in territorial country.
Would the foreign company setup take care of limiting the fica ( social security and Medicare ) if you paid yourself as employees ? If so in which country do you pay yourself?
If all customers are US based what is the best solution for a merchant account? Would it have to be a subsidiary company for processing in the US in conjunction with a us bank account or is there an offshore merchant account option better( that would not cause unnecessary refunds or chargebacks just because it was international )?
Also is there a banking solution for getting the money living outside the states without having to come back to the states. Maybe something like transfer wise? After much research it seems like the powers that be have made it extremely hard for US persons to open a bank account overseas. Also which are best countries that have a solvent banking system without high minimum balance Only want to keep the operating account in states.
Would I be able to keep my us credit cards to run the business ? Can all of this be taken care of online without a us residence address or will a virtual office address be needed? Do you tell the credit card companies you moved overseas?
I know few of the questions cross over from taxation but there was no internationalization category. Any solutions would be greatly appreciated!!!
On a separate note for anyone selling products tangible ( or services that create tangible products as by Product ) or digital into the USA. Including SaaS and information services businesses with customers in some states. Nexus laws keep changing and updating here for sales tax ( I think this is called VAT in other parts of the world) on products and services. Have spent weeks now calling various state agencies who made the laws and even many of the govt workers are confused. For example this week got off the phone with the state of Ohio and they are dropping their sales nexus law from 500k a year in sales down to 100k or 200 transactions. The lady found out by accident when I called and she asked the department head. This is especially important to e-commerce businesses like amazon FBA which is what they are mainly trying to target. However every taxable business exceeding these thresholds will get caught up. I verified with every state and this applies to US based companies and foreign companies. Also spoke to a tax attorney today and he verified that first states they will be targeting for NON US persons will be Wyoming and Nevada LLC and Delaware corps. Note that this is for sales tax and not income tax. Just wanted to help and let anyone know who was making sales into the states or has a company setup here to be aware and stay compliant.
Love to everybody and it?s great to see a vast group of people like this helping each other out!!!
mikeseo
2019-07-27 21:04
you as a US person don't need to get tax residency in another country, you just need to stay out of the US for 11 months a year.
If your wife is currently a tax resident in Europe than she might need to get tax residency in another country like Costa Rica in order to get rid of her tax residency in Europe. If she is also a US citizen than maybe she already lost her EU tax residency but that probably depends on her exact EU country's tax laws
mikeseo
2019-07-27 21:06
you can form a company in belize and contribute your US LLC and bank accounts and credit cards to it, so you don't need to change any of that
mikeseo
2019-07-27 21:07
the belize corp will get rid of the social security medicare tax yes, you can just keep using your US bank accounts
mikeseo
2019-07-27 21:09
you just need to make sure not to spend enough time in other countries to be a tax resident, so like 5 months UK, 5 months Spain, 1 month traveling, 1 month US
mikeseo
2019-07-27 21:11
don't tell the US banks anything about your belize corp, just keep it under your US LLC and use a friends address or something
mikeseo
2019-07-27 21:14
if there is any bank issue like they freeze it for invalid logins or something, you might have to fly back to the US to visit the bank in person, so open a few US bank accounts and cc's as backup before you leave
mikeseo
2019-07-27 21:17
health insurance is also way cheaper, cignaglobal is $100/mo with a 10k deductable for my wife and I. Inside the US it's only good for stuff like car accidents for 21 days per visit, 60 days max a year. Outside the US we're covered after the 10k deductible and 30% coshare, 5k oopm
mikeseo
2019-07-27 21:20
if you have family inside the US, it's hard to be limited to like 35 days a year, partial US flight days count as US days.... if you get tax residence and permanent visa and actually live in costa rica, than you can spend 4 months a year inside the US (you're not supposed to be working while inside the US)
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2019-07-28 01:23
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grecoroman1
2019-07-29 09:59
Mikeseo. Thank you so much for that information. If you wouldn?t mind clarifying a few things I would greatly appreciate it. My wife is dual italian/ Greek citizen. All her life lived in Greece. Got married 4 years ago here in states and she is permanent US resident and eligible for us citizenship in about a year. Although I don?t know if it is more of a liability or asset for her to get it. Immigration said we could apply for a 2 year permit to live outside the us without her abandoning her us residency. We have no family in states except for my brother and he will probably follow me he said. So we have no need to come back to the states for anything. Ultimately we would like to max the time in Greece 5-6 months tops not to trigger tax residency. After that 5-6months somewhere else and less than a month traveling.
I thought the second country had to be a territorial tax country. That is why I was looking at either Costa Rica, Panama or Belize to live in the second country. My wife and I will have to oversee the business so I didn?t want the sourcing problem for taxes. That was main reason to hire a independent contractor or two somewhere else to run the operations. So if I am understanding you correctly neither one of there two countries we would live in can claim us as a tax resident as long as we don?t exceed 183 days in either?
The goal also is to keep the bare minimum in the states. Only the merchant account, biz bank account and a personal account or two. When you say form the international company ( Belize was the example ) and contribute what do you mean by contribute specifically? Also does the Corp have to be in a different country than we live? So for example if we live in Costa Rica does the Corp have to be in Belize not to be sourced in Costa Rica or it doesn?t matter either was since we are US tax residents.
Will the international Corp be the parent and the us Corp just be the payment processing subsidiary or is it the other way around for the SS and Medicare issue?
Does it matter if an independent contractor or employee is in the same country that we live?
What is the most efficient way get the money from the us banks to another country? I do not want to have to come back to states for anything except short vacation or emergency.
Last thing out of these countries overall which has best infrastructure in terms of Access to buy computer equipment( in country or through amazon) , fast internet, pro business, banking, school or home school for kids for future and overall ease of living Costa Rica, Panama or Belize?
Thanks for the tip on the health insurance I will check into that!!
elsamadrolle
2019-07-29 13:36
Thanks.. personally no I would not need any payment facilities other than bank transfers. I?m looking at the following, please let me know if this sounds viable to you guys:
- Leave the U.K. as a resident but keep UK co.
- Apply for NHR in Portugal
- Keep a U.K. Ltd co taxed @ 19%, will be 17% in 2020
- Stay less than 180 days per year in Portugal to avoid the ?effective management test? which I understand kicks in post 180 days (even though I will need to have a 1-year lease or a purchased home)
- Split the remaining 190 days between various countries
- Receive tax-free dividends given my Portuguese tax residency
- In the future figure out a better structure than U.K. Ltd - I somehow feel more comfortable taking this step by step and testing out NHR first. Someone suggested an LLP which would wipe out the U.K. corporate tax but I think that would be a red flag to the Portuguese tax man!
Thanks..
benjamin
2019-07-30 02:58
Hi guys, super basic question.
I have no experience with the classic UK LLP or US LLC follow through structure. How is that profit seen to your country of tax residence?
Ie. Is it shown as salary or dividend etc etc.
Would your country of tax residency see this as employment income? Or passive investment income? I don't know why I can't get my head around this, so sorry for the basic question.
simon
2019-07-30 03:18
@benjamin In most English-speaking countries, the profits received from a pass-through entity will be taxed as self-employment income.
Obviously, there are other variables to take into consideration (for example, are you paying yourself a regular salary from the pass-through entity?).
simon
2019-07-30 03:21
Note: Dividends are paid out of the retained earnings of a corporation, as a result they cannot be issued by a pass-through entity (or any entity that isn?t separate for tax purposes).
mikeseo
2019-07-30 03:23
@grecoroman1 spending 5 months in greece, it's not exactly legal to work there and not pay tax there, but if you're a tourist and all banking is in the US than maybe you won't have any issues.
you only need the second country to be territorial tax if you need to have an official tax residency, US people don't need that. People from the EU/AU/CA etc usually need to have another residency to get rid of their EU/AU/CA tax residency.
mikeseo
2019-07-30 03:26
contribute i mean just a document called a contribution agreement where you write down that the US LLC is contributed to the Belize corp, Stewart did that for me.
mikeseo
2019-07-30 03:27
Transferwise is probably the best way to transfer money internationally, or just use a US debit card with no foreign atm fees to withdraw cash
mikeseo
2019-07-30 03:28
all those countries suck to live in, you can buy shitty computers for double the price of the US, hot humid dangerous not cheap
mikeseo
2019-07-30 03:29
if your wife won't live in the US than it's a liability.
mikeseo
2019-07-30 03:33
ya if you live in panama they will probably recommend a belize corp, still not exactly legal to sit in panama working and not pay taxes on that... territorial means if you live in panama but actually are sitting in belize while working than panama won't tax that money you made while sitting in belize. but in reality I think it's the same thing as working while on a tourist visa in greece, unlikely to have any issues
mikeseo
2019-07-30 03:36
all your tricky shit with eu wife and contractors/employees/subsidiaries etc you need to hire a tax guy like Stewart to advise you
benjamin
2019-07-30 03:55
@simon Okay that makes sense. Thanks for that. So in the situation of tax residency in a country you aren't allowed to 'work' in would this trigger a 'working from' risk? Would a better option be to do contract/employment work for the UK LLP in the 4-5 months of travel time outside of tax residency home. Then the remaining LLP profit distributes to a corporate entity such as as an Estonian company.
grecoroman1
2019-07-30 05:46
Mikeseo. Thank you for clarifying all that. I was basing things off of what you said in the last message that?s US persons are already tax residents and don?t need to spend 183 days in one country. So when you mentioned 5 months in uk, 5 months in Spain, 1 month us, and 1 month traveling. I just wanted to cut that down to two countries with 2-3 weeks of traveling not to exceed the 183 days. The way I understood you in the last message us persons are already tax residents by default. So can people be tax residents of two separate countries at the same time? So why would there be tax paid to Greece? I thought that was the whole point not to exceed the 183 days in any one country. You actually opened my eyes up to not having to exceed 183 days.
My wife wants to live in Greece because 90% of her family is from there. I am already cleared as a permanent resident to stay there. I just do not want to be a tax resident there because I don?t want to give 50-70% of my earnings away to pay off IMF debt and get zero services in return. That is why I want the second country to live in. If it was a country where you received something in return like Scandinavian countries I would not have any problem.
So I will just wait for her to get the US citizenship and go sometime after that. I have been to San Jose CR a couple times for about a month and it was nice but I don?t think to live unless it was only option. I have many people say Panama City is the next Singapore. They must have those opinions for a reason maybe pro business. Maybe this friendly visa program or maybe because they keep furthering the infrastructure. Belize know nothing about.
I was only picking them because they were territorial and I assumed they had some kind of infrastructure. Now that you say that is not necessary. Do you have any countries you recommend for the second country? Maybe Malta, Bulgaria, Georgia. These are all promoted on this message board. You have made the territorial country clear now. So I am just looking for the best choice in my situation. Nothing tricky! Just trying to legally implement the best strategy I can for my situation. Which I guess everyone on this board is trying to do. Hopefully someone like Stewart can give some clarity. Again thank you. I do value your time and advise.
P.S I have checked banks here in the US for a no foreign fee atm and no one has any programs like that anymore. Citibank had one where you had to tie up 100k and they paid a couple hundred dollars a year and threw in a free Walmart gift card.
elsamadrolle
2019-07-30 07:19
I?m looking at the following, please let me know if this sounds viable to you guys:
- French citizen living in the U.K. for 15 years, I am director of a U.K. Ltd company which I set up a year ago
- Leave the U.K. as a resident but keep UK co.
- Apply for NHR in Portugal
- The U.K. Ltd co corporate taxed @ 19%, will be 17% in 2020
- Stay less than 180 days per year in Portugal to avoid the ?effective management test? which I understand kicks in post 180 days (even though I will need to have a 1-year lease or a purchased home)... is this where my highest risk is?
- Split the remaining 190 days between various countries
- Receive tax-free dividends given my Portuguese tax residency
- In the future figure out a better structure than U.K. Ltd - I somehow feel more comfortable taking this step by step and testing out NHR first and making sure dividends are not taxed. Someone suggested an LLP which would wipe out the U.K. corporate tax but I think that would be a red flag to the Portuguese tax man!
I would also consider a Malta company at a later stage to replace the U.K. Ltd (lower corporate tax but higher admin fees from what I can see)
Please let me know your thoughts on the above structure, anyone?s insight into the perceived viability or potential flaws is hugely appreciated as I?m looking to make the move soon :)
alexjohnfarris
2019-07-30 08:03
has joined #taxation-personal
simon
2019-07-30 08:27
@benjamin It may help minimise the risk of triggering a red flag in your country of tax residence but it will not make your work there any more legal (if you have no work permit) as the work will still be performed while physically in the country.
vinodgn0088
2019-07-30 09:38
@elsamadrolle, If you are the sole owner /director of this setup then your plan won't work smooth. 1) If you have a 1 year lease in Portugal and you do works when you are present in Portugal then your company will be taxed in Portugal. residency test is not just 180 days stay. 2) Tax reduction in Portugal is very difficult and NHR is mainly targeted for those with pensions and passive income ( dividend from unrelated companies, bank interest etc). If you are ok with paying 20% tax and you are IT professional, your best bet is setup a UK LLP and declare the profits as self employed income on Portuguese personal income tax return. Under NHR, you can opt to have 20% flat tax rate. One doubt left is liability for Portugal social security tax on LLP's business profit. One accountant told me that since the income source is outside Portugal and its a business profit, there is no need to pay social security taxes. Need to confirm this with someone else.
elsamadrolle
2019-07-30 09:44
@vinodgn0088 Thank you.. I spoke to 2 accountants and got conflicting advice which is frustrating. That?s helpful. So I?d really have to jump through the hoops of demonstrating an office elsewhere with another director being paid, decisions made outside Portugal etc. Has anyone on here ever succeeded at doing this under NHR? 20% tax is OK but I guess you?d have to really fall in love with Portugal!
vinodgn0088
2019-07-30 10:12
@elsamadrolle, If you want to legally operate a UK LTD without falling into PT's effective management test, you need at least 1) a physical office in UK 2) Two non-PT directors 3) All board meetings happens in UK 4) Once UK leave EU, the UK LTD must suffer at least 12.6% corporate tax otherwise it will be deemed as resident by PT based on CFC rules and your dividends will face 28% personal tax in PT. You already have a Tier1 passport, your best option is to take-up Cyprus non-dom residency and then travel other countries ( like 3 months in PT, 3 months in Ireland, 3 Months in Cyprus, 3 Month in any other country).
pierre.berthalon
2019-07-30 13:12
It turns out it's actually pretty hard to live a tax-free lifestyle !
@elsamadrolle I'm in a similar situation, only I prefer a UK LLP to a LTD.
Ever think about the friendly nation visa of Panama ? @vinodgn0088 What do you think ?
elsamadrolle
2019-07-30 13:16
I agree @pierre.berthalon nor is it advisable, really. One advisor told me they do facilitate tax-free schemes but when they do they have to report that they have created a tax avoidance scheme to the authorities. Kind of defeats the purpose. I?m happy to pay tax but would like to keep it to 10-15% all-in, including company formation costs etc which is tricky. I?m looking at LLP.. am I correct in understanding you are able to expense less on LLP than LTD? It?s really tough to decipher fact from opinion online! My other challenge is that I have ageing parents in Europe so trying to not stray too much further than a few hours flight for residence. Staying in EU doesn?t make it easy!
vinodgn0088
2019-07-30 13:23
@pierre.berthalon, mikeseo knows better about Panama.
vinodgn0088
2019-07-30 13:23
@elsamadrolle, You can give a try on Andorra if you don't want to be too far from UK. Jase is resident there and frequently visits Spain without issues.
mikeseo
2019-07-30 19:17
@grecoroman1 yes you can be tax residents of 2 countries at the same time.
The point not to exceed 183days in Greece is so you can just stay with a tourist visa and don't become a tax resident. You need to check Greece tax laws specifically if you already have PR there....maybe if you work at all in greece with pr than you're liable for tax there...but maybe it's not easily enforced.
Panama is very different from Singapore, Singapore is safe clean well run etc, just hot and humid and chinese fast speed. Panama is pretty 3rd world, expensive for what it is. I've lived in both for 2-3 months.
For a second country to spend time in, pick a great high tax first world country, you'll just be a tourist so no tax issues. Malta Bulgaria Georgia etc are for the EU people who need to have an official tax residency outside their citizenship country. I suggested UK because it's close and not in the EU. On a tourist visa you're kinda limited to 3 months in Greece, 3 in UK, repeat.
The atm fee stuff doesn't really matter, small potatoes compared to income tax. https://www.nerdwallet.com/blog/banking/debit-card-foreign-transaction-international-atm-fees/
mikeseo
2019-07-30 19:20
basically the idea as a US person is to not become an official resident in another country, just stay as a tourist and less than 183 (or whatever the min days to become tax resident) so you don't have to worry about tax in those countries.
mikeseo
2019-07-30 19:22
it might be a mistake for you to have greece pr because you might be taxed there sooner/easier, and a mistake for your wife to get us citizenship because than she will have to file and maybe have to pay US taxes every year for the rest of her life..
a.adriano.bueno
2019-07-30 21:53
Hi, I saw the conversations about Portugal above pretty interesting and would like to step in and ask for your advice as well since I'm pretty new in this offshore/nomad world.
Before my doubts let me share some background about me and my future plans. I'm a Brazilian citizen, married with another Brazilian citizen, father of 3yo twins. I'm in process to get my Italian citizenship (consider to have it within 1 or 2 years). My wife and I would like to rise our children abroad in a less violent and inequety country so we are considering move before they start school (around 6yo). From our researches, we believe Portugal could be a good fit for our requirements with additional positive points as same language, some cultural proximity, low living cost, etc. We would be able to move there even without my Italian citizenship complete because I could apply for theirs D7 visa for stable income individuals.
Nowadays I've a WY LLC that I use for trade in the US and also secure some money in a strong currency (at least stronger than Brazilian Real). From Brazilian perspective I just own taxes here when I send money back from the LLC to my Brazilian personal account.
My idea would be send money to the LLC account in the US and work it there while don't leave the country. Once I move out and file my declaration leaving Brazil with Brazilian IRS (where I will state I'm not a Brazilian tax resident anymore) I'll be able to send money from the LLC to my personal account in Portugal as dividend what I understand would be tax free.
It seems to be pretty simple (and good) to be true and from my reading of earlier messages seems not be as simple at all.
Am I missing anything here? Should I apply for the NHR there in order to get this tax isemption? Could I send the values from LLC to personal account in Portugal as a salary payment or dividend? Or are there any different arrangement that I should consider?
Sorry for this long message and probably very begginer questions but these ones, for sure, will provide me a good guidance for the next steps my family and I will take.
grecoroman1
2019-07-31 01:10
@mikeseo Thank you so much for clarifying all that!!!!!!
To trigger the pr in Greece I have to stay the 6 months and I have never stayed longer than 2 months as an adult. I will however verify that easily with an immigration attorney over there and I know a lady at a Greek embassy here also. I already verified with the tax office and my in-laws accountant and they both said it is clear cut I have to exceed the 183 days for the tax residency. My father is still alive there so I can even apply for the Greek citizenship through ancestry which takes less than a year. I just don?t know if that is a good idea to get that.
Outside Greece My wife has family in Italy, Switzerland, Netherlands, and most in UK ( Manchester and London ). I think I just need to fully understand the domicile non domicile thing in my circumstance. We will have kids and they will need school so the most I will be able to split is two countries for less than 6 months each and less than a month travel outside both. So I just need to make sure the second country is less than 183 days like in Greece for tax residency purposes.
My wife can legally apply here to extend to stay outside the states for 2 years without any issues. Any longer we will have to go to embassy for extended paperwork. That will buy us a good amount of time for more permanent decisions. I really need to find a good accountant that understands us tax law in the US as well as generally EU or UK before we even leave the states.
I still will need to deal with the foreign Corp to deal with the fica and Medicare and anything else that is beneficial that comes with it. What country would you recommended for that and does that necessarily have to be in the second country we would live. So for example, if we lived in Greece less than 6 months and Netherlands less than 6 months. Would Corp be formed in high tax ( like UK ), lower tax like Bulgaria or Andorra, territorial like Panama/ Belize or just somewhere else entirely?
Again thank you so much for your time and help!!! If there is anything that I can do for you here in the states or maybe in Greece please do not hesitate to ask!!!
mikeseo
2019-07-31 03:39
oh cool so just stay as a tourist in greece for less than 183 days a year and don't pursue greek citizenship for now.
and stay as a tourist in UK for less than 183 days or whatever, and than spend 1 month in switzerland skiing , so 5.5 greece, 5.5 Uk, 1 month ch. Will greece and uk let you stay 5.5 months straight as a tourist? Or will you have to do 3 months, leave for 3, than go back for 2.5?
but how will your kids go to school? the school year is longer than 183 days right?
maybe in the future when you have to spend more than 183 days in one country because your kids need to go to school than you can do nondom uk, malta, ireland, andorra, portugal, etc.
yes you will need the foriegn corp to save that 15%, just pick an easy cheap country territorial tax country like belize or bvi, Panama you gotta get a few people to sign and it's more expensive, banking and reputation doesn't matter since you will keep your US LLC and US banking. Stewart uses Belize, it's like $600 a year or something.
grecoroman1
2019-07-31 04:50
@mikeseo Thanks for the quick response. I don?t know about the UK in regards to brexit and staying 5.5 months beyond the 3 month tourist visa so maybe the UK is not an http://option.My plan was to obtain EU citizenship either through my father ( Greek side ) or my mother side Spain or Italy. Then I could stay in EU regardless of my wife?s citizenship. We are working on the first child now So I am not overly concerned now as it won?t matter until about 5 years old. However I would like to know how the systems work from now and the options. Schools generally run the long semester January- June 5.5 months and the short September until December. Greece is Jan 8- June 15. Summer is usually about the same everywhere. Since it will be split between two countries maybe we will be forced into an international school or possibly homeschool. So it would have to be either July or August we would have to be outside both countries when the kids come into the equation.
I found a lady who expedites the italian citizenship in about a year.
I haven?t found anything or anybody that does Spanish citizenship.Beyond that Panama has some treaty with Italy for last 50 years for even easier PR than the friendly nations program. Would that change anything with choosing between a Panama Corp or would Belize still be a better choice?
Is it worth getting the Panamanian PR for anything in your opinion?
mikeseo
2019-07-31 05:04
Ya in 5 years who knows what you'lI be doing, at least you have 5 years of no taxes saved up. I got Italian citizenship by ancestry too, I used Luigi Paigano, he was fine. I got Panama PR too, it's a waste for US people who don't live there, they don't really give passports after 5 years and it doesn't help you with a corp, I regret it. Belize is still better/easier/cheaper.
mikeseo
2019-07-31 05:06
I think Stewart sells a online course about doing the feie and has a belize incorporator he uses
mikeseo
2019-07-31 05:06
pick the citizenship where you won't live, it's better to be a tourist.
grecoroman1
2019-08-01 00:40
@mikeseo You are absolutely correct. Maybe in 5 years robots will be teaching the kids. Like Paulie?s robot in Rocky IV. Congrats on the Italian Citizenship! I personally will feel very honored if I can get mine.
It crossed my mind now what country address do you use on the italian passport if you don?t live past 183 days in any country? If I can get mine while still living the the states I guess I could use this address , but once we leave this address will be gone. Plus it would feel strange leaving a US address on a foreign passport
Additionally it led me to the next concern that it seems to be a problem for US expats to open bank accounts overseas. I have read many stories that many countries just don?t want to deal with US persons. Greece is out of the question after what happened with the capital controls. My mother in law told me she almost got trampled a few times at ATM. I don?t like the idea of keeping savings in the states beyond the biz operating account a personal account, and one of those online accounts like the Schwabb account you sent me the link. After what happened here in 2008 it can never be the same again in my eyes.
I have read that Georgia, Armenia and a couple of the surrounding countries were good and paid a pretty decent yield. I also read others that said they had problems there ( although I don?t know details )
If you had to recommend a few countries where US persons wouldn?t have problems and the banks were solvent and stable?
I went to Stewart?s website and I think I will pay him for a consultation. From his articles he seems very seasoned among a broad range of situations. I just hope he has dealt with people wanting to live in EU or elsewhere and not just Latin America.
It also makes a lot more sense now ( as you suggested ) to flip between the two countries every 3 months with 2-3 weeks vacation a year outside those two countries. when I asked my wife to choose second country she said UK and I?m not sure how that will affect other EU citizens if the Brexit goes through. Do you believe going back there every 3 months they would look at that as a intention to immigrate? Here in states I don?t think that would fly for a non US person.
ggiampieri
2019-08-01 01:26
@grecoroman1 no address on IT passport, just the city where you got it. You need to register at the embassy of a foreign country if you plan to live abroad once you get it..
mikeseo
2019-08-01 04:40
I registered with aire in the philippines, I think it's written on the second page of the passport that I'm a resident there and I think the first id page says something like born in the US. I'd just leave the US residency on it if I got it while living there, it doesn't matter, you can't hide it from banks anyway.
US citizens can open foreign bank accounts, I recommend Singapore, OCBC used to be 200k min deposit for a personal account and 30k for a biz account a few years ago. Maybe UK and Georgia too? US banks are cheap and easy though and work for cc processing etc. SG banks have higher fees.
I'm not sure Steward knows any details about specific EU country tax laws but he knows the US tax laws well.
I don't think going back to the UK every 3 months would look like intention to immigrate, you have good passports already and are not poor. But maybe not exactly 182 days a year..
The problem I foresee is you really have to pick 3 countries to always live on tourist visas and than your wife will probably get tired of never being settled and making a home for your kids.. I have the same issue and no solution yet. Maybe look more into UK non dom rules to see if it could work.. Too bad she doesn't have family in IE Andorra BG etc although maybe you could just live in greece full time and cheat on your GR taxes...I heard tax evasion is rampant there?
pierre.berthalon
2019-08-01 09:50
@elsamadrolle I completely agree with you, I'm willing to pay taxes to gain peace of mind and a stable situation, but taxes in Portugal exceed the 10-15% threshold I can accept :confused:
I was suggesting Panama, because it seems to be one of the few (only?) countries to be ok with a permanent resident not paying taxes. Plus you don't need to stay in the country, allowing you to live in the Schengen area with your French Passport.
@mikeseo You seem to be one of the few to have skin in the game concerning the Panamean friendly nation visa. Could you please tell us more about your situation ? Like were you able to obtain tax residency not living in the country and managing a foreign company..
@a.adriano.bueno Welcome aboard :slightly_smiling_face: ! You seem to be in a similar situation as ours..
I suggest you to read this: https://tax-free.today/blog/nhr-residency-in-portugal/ To sum it up: A company is resident in Portugal if its legal seat or place of effective management is Portugal.
In our case, we would live and work in Portugal hence the place of effective management is Portugal. Portuguese tax administration would consider your US LLC as a resident company and ask you to pay portuguese taxes on it. As @vinodgn0088 suggested if you want to avoid this, your company should have 2 foreign directors, foreign offices and the proof that you've paid taxes in its resident country..
mikeseo
2019-08-01 14:48
@pierre.berthalon Sorry I don't have details about obtaining tax residency in Panama, I doubt they are strict on enforcing taxes if you manage a foreign company and live there but I don't really know...you will probably have to spend xxx days to get tax residency.
It was easy enough to get the friendly nations visa, I hired Mata Kelly lawfirm, did the paperwork, paid them a few k, deposited 5k in a bank, they took me to the immigration office a couple times, it took a few months.
I didn't try to get tax residency in Panama because I don't need tax residency because I'm a US citizen.
I tried moving/living in Panama City and Coronado and didn't like the country. It was expensive, didn't feel that safe, shitty food/weather, and seemed very undeveloped outside Panama City.
I'm thinking about abandoning the visa because there doesn't seem to be a hope to get a passport, especially if I don't really live there.
grecoroman1
2019-08-01 19:19
@ggiampieri Thanks for that information!! I will check into that.
grecoroman1
2019-08-02 00:26
@mikeseo It makes sense with the italian passport. I knew from research before that they will list the person is a US person. I guess the bottom line is to find a bank that will not automatically turn down a US person.
I?m confident Stewart can help me and refer me to a separate person for the rest with EU.
It?s funny you sent me the nomad capitalist guy as I came across him about 6 months ago and he is the one that opened my eyes to all this.
His trifecta method uses what he calls the ? bases ? ( I think his are Malaysia, Montenegro, Georgia, and he wants to pick one in Latin America - probably Colombia ). I liked the idea and thought it could be minimized to 2 places possibly less than 182 days in each and maybe Airbnb for a month in a third separate country.
My wife doesn?t mind doing it between the three counties and I don?t mind. She already has childhood apartment that?s laying empty for years in GR.I wanted buy a reasonable apartment in second country and then Airbnb in the third.
As you said this is ok until the kids will need school. Then seems like only option would be like Andorra or Bulgaria.
To say that tax evasion is rampant in Greece is like saying that hitler or pol pot are not such nice guys. They even have a term for last 100 years called ? fakalaki ? which is the name of the envelope that the bribe comes in.I am with the camp that gets the peace of mind to pay 10-20% tax and know everything is structured by the book.
Managed Rental properties for passive are in my longer term plans, it still searching for country with property rights, decent yields, under 20% local tax on rentals and non corrupt property management.
Nomad capitalist believes newest countries for that?s are the ? Stans ?.
I get Georgia or Armenia being good choices, but I just have a hard time believing Islamabad will be like Singapore in 20 years.
Thanks for the video!!
vinodgn0088
2019-08-02 01:39
@grecoroman1, Greece is trying all their ways to get more taxes. So don't just rely on the 183 days test especially when your wife got a permanent home available through out the year ( regardless of 183 days stay). If you don't stay in any country for 183 days, you are practically opening a provision for residency test based on permanent home and center of vital interests.
me1892
2019-08-02 02:21
Mmm, I never understood how the trifecta method helped.. you have to be resident somewhere right? Otherwise you're asking for one of your bases to claim you.. I believe the presence test in Malaysia drops to 90 days after the second year so perhaps Andrew maintains residency there that way
mrchristiaanpieterse
2019-08-02 03:12
has joined #taxation-personal
mikeseo
2019-08-02 03:51
I don't think everyone HAS to be resident somewhere...but maybe that's just true unless/until you get investigated.. being US citizen I think it's assumed you're a US tax resident, or if you have a tax haven citizenship you probably have a good excuse too. Maybe just AU/CA/EU/JP etc strict tax countries citizens HAVE to be a tax resident somewhere?
simon
2019-08-02 03:55
@mikeseo Maintaining a tax residency is indeed more of an insurance policy in case you get audited (being a resident of nowhere is too much of a grey area in my opinion).
It?s also a useful tool as you will have a more ?regular? profile in the eyes of governments when you apply for visas etc. It will also make borrowing easier, passing due diligence procedures to prove your income source etc.
mikeseo
2019-08-02 05:47
I guess I did have a bit trouble entering the US a few times when I told them I'm a digital nomad and I don't live anywhere and I just travel around, I would go to secondary inspection or they had to check with a supervisor. Now I tell them I live in xxxxxx and there isn't an issue anymore.
michael
2019-08-02 09:08
Agreed
grecoroman1
2019-08-02 17:37
@vinodgn0088 You are right they are trying, but the people are sick of the austerity for so many years ( that?s why all the strikes and protests all the time ). My wife?s apartment is still in her parents name plus we never spend more than 6 weeks a year there so I?m not concerned for now.
However we called her parents accountant few hours ago from curiosity. He said it?s one way for us citizens and said generally different for everyone else. He said for US citizens tax residency defaults back to the US. He gave me an example of clients he has where wife is US/Greek dual citizen and husband is just us citizen. They live 6 months in Belgium and 6 months Greece. They had to register in both countries ( marriage docs etc ) so guy could remain resident. They file tax return in Greece also only because they Airbnb their apartment for other 6 months. In Belgium they don?t have that problem. He said as long as they don?t exceed the 183 days in either they are good not to trigger double tax residency.
He said for NON US citizens the general rule is still 183 days, but then goes to the vital interests and common ties tests. Using above example if they were not US citizens then it would come down to vital interests of just default to them being tax residents of Greece since she has citizenship there. He said in reality it only gets complicated with the vital interests when there are kids and they need to go to school.
Accountant verified @mikeseo was exactly correct when he said not everyone needs to be a resident somewhere, ( US citizens are assumed to be tax resident of US ) but everyone else MUST be a tax resident somewhere if not it will default to your citizenship. Especially certain countries that have specific rules when you leave ( I think he mentioned AU, Spain, Italy, Norway and some others.
He said anyone that thinks they are not a tax resident somewhere is either ignorant or ill informed. He gave example of another client he has ( Greek citizens ) who has been freelancing around Europe as tourist for last 3 years and now moved back permanently to Greece. When account asked him about filing returns for 3 years guy just said that since he was just a tourist everywhere else he didn?t think he needed too. Now they have to file.
He also mentioned that @simon is also right in respect to legitimizing everything ( visas etc ).
I will see if he can put me in contact with his Clients who live Belgium/Greece who have a child around 2 years old. I am very curious what they do with all of this when school is involved for kids?
grecoroman1
2019-08-02 18:00
@mikeseo I have a guy I know ( acquaintance/ friend ) who works as a head supervisor for c b p at one of the major airports. He told me some interesting things that he was able to.
He said that under no circumstances NEVER can a US citizen be denied entry to the US ( even without a passport ). He said their main priority is to verify your identity ( which can easily be done from persons photo on file. Anything beyond that ( harassing, secondary, etc ) is strictly for information gathering for ? your profile ?. He said it is especially prevalent for DN, expats, Strange circumstances, etc. He said best policy is to actually say as little as possible and even if they harass you or even detain you by law they have to let you through. Note this only applies to US citizens. Everyone else is fair game for denial of entry and he told me some horrible stories. Just FYI to save you trouble in the future.
mikeseo
2019-08-02 20:46
@grecoroman1 cool it sounds like your plan could work perfectly! maybe keep a US address and phone number you can use for US banks and cards and LLC though, like a US friend's address.
let me know what you find out about school solutions.
ah interesting, probably didn't help that I was traveling with my Philippines passport wife.
otkeedca
2019-08-03 10:04
Hi folks. Does anyone know if owning a US LLC with a foreign holding company vs owning it personally (as a non-US person) changes how the LLC is taxed or the reporting requirements? The LLC is not ETBUS, has no Effectively Connected Income in the US, and no Permanent Establishment in the US. Currently I'm just submitting Form 5472 along with a blank 1120 as the only reporting requirement
omatic.hk
2019-08-05 03:35
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ouafouaf
2019-08-06 02:42
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kuka
2019-08-07 01:09
@otkeedca any good plug for filling out the form 5472?
simon473
2019-08-07 04:20
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simon
2019-08-07 04:29
@otkeedca It doesn't matter if the LLC is owned by a natural person or legal entity. The reporting requirements are the same.
otkeedca
2019-08-07 12:14
Awesome, thank you!
otkeedca
2019-08-07 12:15
I just fill out the 5472 myself
prideaux
2019-08-07 12:51
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stolzlos
2019-08-08 16:40
does anybody have a recommendation for a good tool to calculate your capital gains taxes for stocks bought in different currencies and on different exchanges?
johncitizen
2019-08-11 07:22
Australia has Sharesight, which is brilliant
stolzlos
2019-08-12 11:09
Thanks! Already checking it.
hello888
2019-08-12 22:31
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2019-08-14 03:01
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2019-08-14 03:01
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2019-08-16 03:07
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2019-08-16 03:07
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2019-08-18 09:53
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2019-08-19 02:30
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2019-08-19 09:50
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tiagomdreganha
2019-08-20 11:52
@vinodgn0088 I'm Portuguese so no NHR for me.
I'm interested tho in the advice you got for the transparent LLCs. As far as I knew, those type of structures are not recognised by PT law, so they are trated as a regular company and they would want to tax it as a PT company (and ask for accounting done via Portuguese laws)
I have an eCom company, have been working in growing my sales out of Portugal as the 23% VAT kills any sort of profitability from high volume/ low margin businesses. Plus income tax (aprox. 35%), social security (34%), it's a shit show. Accounting costs for a basic company start at 200?/month, in a country where min wage is 800?.
I'd open an US LLC and move my residency somewhere with zero/low tax, where I can build "substance" cheaply (rent a place and get bills on my name), travel to/from Portugal quickly/cheaply. Just moving my Advertising bills to a US miles card would cover all my flights...
Given the specific characteristics of the LLC, idk what countries would be a good fit. I would prefer paying some low flat rate income tax on a country like Bulgaria/Cyprus/Georgia etc than going cross atlantic to Panama for 0%, I don't think the added costs would justify.
I'd keep traveling and don't spend more than 90 days every 180 in Portugal.
vinodgn0088
2019-08-20 13:29
@tiagomdreganha, I didn't check the case of USA-PT DTAA. But I can confirm a UK LLP is indeed treated as a tax transparent entity on UK-PT DTAA. And your income will be treated as a self-employment income according to Portuguese rules. There are accountants who work for as low as 120EUR/Month. Also, how come you need to suffer the 23% VAT? If you are registered for VAT, you can get refund of VAT paid on on business expenses. Without NHR you will have to pay too much toward income tax as the higher band is like 48%. You already have a strong passport, in your case moving to Bulgaria, Cyprus or Malta is best.
tiagomdreganha
2019-08-20 13:52
@vinodgn0088 I'm talking about VAT on Sales. Right now all my inventory is inside the EU so there's no way around it. Right now in my vertical I'm competing against 2/3 big seed money startups in EU, they pay VAT but are operating at loss or near loss as they are interested in revenue growth, and then competing against the dropshippers/chinese selling supper cheap by sending directly from China (most shipments sail trough customs without VAT/Duties).
PT company with warehouse in China would work, the PT VAT code is clear that goods shipped from outside of Portugal are not liable for PT VAT, however they are not clear on what is actual proof of that, so the VAT Man can just come and ask for export declarations for every single invoice shipped from China. So a non-EU company would be better in this case, and a residence in a "regular" country with strong ties (rental & bills at least).
Self-employment income would still pay SS and high income taxes here in Portugal, so without the NHR to cap it at 20% it's not that beneficial.
vinodgn0088
2019-08-20 14:10
@tiagomdreganha, What I heard is following. 'Self-employed income is liable to social security if the income source is Portugal". Which means A UK LLP's income from a Canadian client is treated as business profit of UK LLP which in terms is taxable in hands of PT resident partner. In such cases the income is treated as a foreign sourced income and is not liable to social security taxes." Is this true?
tiagomdreganha
2019-08-20 18:56
(I'm a citizen/tax resident so I can't access the NHR)
I can't find any info on that exclusion for foreign sourced income even searching in Portuguese... I'm Self-employed and I sell a lot to Brazil, that income is foreign-sourced but it is still income generated in Portugal by my self-employed activities, so it must pay SS. Only capital/dividend income is exempt from SS. For self-employed the SS rate is 21%.
I never saw any distrinction in foreign/local sourced income on my income/SS forms, they only ask if it's product sales or services (they are treated diferently under the simplified accounting regime)
Anyway, I definitly don't want to stay resident in Portugal, maximum I will keep here business-related is some inventory/warehouse being handled by an independent 3rd party. I have property here, so I will have to rent it to someone and establish strong ties (rental contract, bills etc) in the residency country.
In my case a non-EU company would be ideal (hence the US-LLC), with low maintenence/accounting costs, paired with a residence where tax on LLC profit would be low. I'd rather pay 10-15% income tax on a "whitelisted" location where I can establish decent residency-substance than 0% on a country that raises eyebrows to the PT/EU gov.
Do you know if an US LLC (transparent) would trigger Social Security in Cyprus as a non-dom?
vinodgn0088
2019-08-21 04:13
@tiagomdreganha, US LLC / UK LLP is treated as tax transparent in some countries only. So you need to talk to a local account in country where you plan to settle down. If your profit margin is more than 35% then you can try Romania Micro enterprise. (1% tax on turn over if you position yourself as an employee who pay social security on at-least minimum wage, + 5% dividend tax).
mark
2019-08-21 10:12
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marziovit
2019-08-21 10:12
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marziovit
2019-08-22 06:28
@simon after a lot of questioning i've decided that the best tax residency for me will be Switzerland. Now, to be a tax resident in Switzerland i need to work there and this means opening a business. I have 2 choices: opening a SAGL shelling out 20.000CHF or create a branch of a foreign company. The latter option is best. A branch can have his own PayPal, Stripe. Now it comes the problem. Where to open the company? I sell on FBA (in EU and US) and consulting with mainly EU clients BUT i want to sell consulting with a different company so that people can't reverse engineer what i am selling on FBA. Any suggestion for the best possibile structure?
marziovit
2019-08-22 06:34
I thught about using 2 LLCs, one holding and one operational. I could sell on FBA using the operational LLC and create a Swiss branch of the holding LLC BUT i fear that all the income will be taxed as personal income in Swiss.
ionutadrian.m
2019-08-23 00:14
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nardimed
2019-08-23 04:18
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contact339
2019-08-26 10:59
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stihlman
2019-08-27 11:52
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immanuel.debeer
2019-08-29 16:14
are there any benefits of running the LLC through a foreign holding company?
benjamin
2019-08-30 19:43
@bussyscorp but where do you actually live? That's the most important thing
bussyscorp
2019-08-31 03:18
how is that important here?
higiacomo
2019-08-31 11:52
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mikeseo
2019-08-31 19:03
sounds like you're making a legitimate business into an illegitimate one
mikeseo
2019-08-31 19:04
move out of canada to stay legitimate
paul.giannotti
2019-09-01 02:23
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tdibaja
2019-09-03 10:16
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koshis
2019-09-05 05:47
Hi guys,
What is the best solution for corporate tax residency for offshore companies. I am thinking it might be wise to have the management and control somewhere that will give a tax residency certificate but still be zero taxes. The offshore company would be Nevis. I am based in Thailand so don't want management and control to be deemed here.
What are other people doing for a solution to this or is it not really a problem? @simon would be very keen to hear your thoughts.
yu138086
2019-09-08 17:42
Hi everyone,
Will investing with a brokerage in Switzerland as a non-Swiss resident will subject a person to taxation on capital gains and dividends? I know interest income is taxed but what about capital gains or dividends? Thank you.
consciouscapital
2019-09-10 02:42
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2019-09-10 10:22
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2019-09-11 08:13
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merle.alexis
2019-09-12 05:57
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2019-09-12 09:05
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services
2019-09-12 22:49
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2019-09-13 00:51
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ivan.lakatos
2019-09-14 09:36
@simon Kindly wanted to ask you if you're still working on the tax residency guide ?
simon
2019-09-14 11:03
@ivan.lakatos I?m behind schedule on its release but yes it?s still something I?m working on.
ivan.lakatos
2019-09-14 11:36
Great, thanks. I'm trying to set up the 5 flag theory for myself so that guide could become really handy @simon
ivan.lakatos
2019-09-14 11:42
As I'm in Thailand right now and planning to be based here too in the near future I'd be quite curious about potential answers to that question too.
tilaukset
2019-09-16 03:22
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2019-09-17 22:42
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tdibaja
2019-09-21 08:25
UK LLP FOR NON-RESIDENT DIRECTORS
Hi all,
Did some digging recently into UK LLPs for non-residents as I was coming across conflicting information so wanted to post it here in case it helps someone. I spoke by telephone to a regular UK accountant, 2 overseas tax specialists and HMRC (UK tax office) technical tax adviser directly.
1) Accountant said if UK LLP is registered in the UK, HMRC will deem the company to be controlled and managed in the UK. Non-resident partners taxation is a "grey area". --- WRONG
2) Tax specialist A said non-resident partners go tax-free but if you have UK customers, they constitute UK-sourced income and this is therefore taxable in the UK. --- WRONG
3) Tax specialist B said the same as previous. --- WRONG
4) HMRC said non-resident partners go tax-free unless duties for the business can be considered to have been carried out in the UK (control, management, meetings, etc). Having UK customers does NOT constitute UK-sourced income. The location of customers is not relevant.
This basically confirms what FreedomSurfer/Simon says. I wanted to verify it because it's such a key point and there is bad information out there on the internet. I would also advise being careful with accountants and tax specialists as they clearly don't always know what they're talking about.
simon
2019-09-21 08:32
@tdibaja HMRC publishes guidelines every year about this: https://www.gov.uk/government/publications/partnerships-foreign-aspects-hs380-self-assessment-helpsheet/hs380-partnership-foreign-aspects-2019#partnership-consists-solely-of-non-resident-partners
tdibaja
2019-09-21 08:36
@simon I saw this but I couldn't find a definition for "UK operations" and "UK sourced income" so wanted to make 100% sure if doesn't include just having customers in the UK. Thanks for your solid advice! One of the accountants I spoke to said they are making tax returns to some of their clients in this (incorrect) way, so there are people out there paying too much tax with insufficient knowledge.
marziovit
2019-09-21 09:39
@tdibaja good job and thanks for reporting this!
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2019-09-22 17:53
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2019-09-25 03:44
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2019-09-25 17:26
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2019-09-26 03:29
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2019-09-28 18:00
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2019-10-01 04:42
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2019-10-07 11:32
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2019-10-09 04:43
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2019-10-09 04:52
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omocha_10
2019-10-09 12:35
Hi, I am a nomad from South America, where I kept my tax residency until now that I want to change it. I also have an EU passport.
I invest in financial assets, worldwide real state, and a bit on own small internet ventures.
I want to keep on being nomad(no more than 183 days per year at a country).
Would like to pay non or little tax on foreign remitted or non remitted capital gains/income/internet ventures gains.
Portugal sounded like the right place for 10 years NHR status, but the capital gains 28% tax on making profits from selling stock shares was a deal breaker.
Monaco is out of my budget.
Panama sounds like a possibility but I don?t want to spend time in that country(30 days max).
Would appreciate some orientation to where to set a new tax residency.
Been researching for a long time, Paraguay, Malta, Georgia, Dubai if it?s not too expensive, Malaysia, even Ukraine sounds closer to what I am looking for.
Thanks
michispc
2019-10-10 01:13
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perrylok
2019-10-10 01:13
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chris
2019-10-10 09:53
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2019-10-10 10:20
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luisdaniel.mateos
2019-10-12 14:51
Hola Mario! From what I read is probably that Malta is also out of budget (close to Monaco). Tax residency in Estonia could work for you as they are very e-venture friendly. You are right about Panama, it is the worst country as any type of bureaucratic procedure (trámite) takes forever -e.g. I had a Canadian friend that sold his house and since the purchase was already in progress (for 5 mo prior) but the bank hadn't finalized the paperwork to transfer property to new owner, no one could live in the house in the meantime so the bank paid for a +2 month stay at a hotel for my friend and his family!-
luisdaniel.mateos
2019-10-12 14:52
Would love to catch up with you to share experiences... I am from Mexico. Best!
internationalbits
2019-10-12 15:58
No, Malta would "cost" zero as he holds a european passport, one simply needs to relocate and get residency.
Flat rate is 5k yearly. Ireland is the same taxation wise, but no 5k flat rate and unfortunately - unlike malta - it has a minimum time spend of half a year.
omocha_10
2019-10-13 00:18
Thanks Mateos. Inty is right about Malta/Ireland. I like a lot the baltic states, don?t think Estonia is even close to Malta/Cyprus/Ireland. Not an expert, but the e residency doesn?t does much regarding tax efficiency.
omocha_10
2019-10-13 00:19
I read that Guatemala, Nicaragua, Costa Rica are good for registering.
vinodgn0088
2019-10-13 01:52
@luisdaniel.mateos, 5K minimum tax applies only if you have 35K yearly income. Below that you can opt to have taxed at Malta's normal tax rates. Also, don't forget the fact that cost of living in Ireland is much higher compared to Malta.
omocha_10
2019-10-13 14:46
Hi, in Malta if you earn less than 35k euros a year you don?t pay any taxes for ANYTHING earned abroad?
internationalbits
2019-10-13 16:25
You do pay them
luisdaniel.mateos
2019-10-14 03:10
Well, if it were Estonia I wouldn't suggest e-residency as you can opt in to have a residence if you demonstrate that your business in mainly internet-based. I wasn't talking about passports though, I was talking about cost of living in those countries and of course, taxation.
luisdaniel.mateos
2019-10-14 03:11
Yes, I was talking about cost of living. Sorry
luisdaniel.mateos
2019-10-14 03:12
Cost of living in Malta is also much higher compared to Estonia
michispc
2019-10-14 20:26
Hi guys, quick question: I noticed that a server that runs your website can be regarded as a nexus in the US. Does this apply to other countries as well? Does it matter, where my server is located - taxwise? I was thinking about running my server in the US and pay sales tax in that particular state, since I will sell to americans/canadians anyway. If I decide to target Australia and New Zealand as well, would another server location make more sense? Thanks for your feedback
lucas0911
2019-10-17 15:57
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2019-10-18 15:59
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2019-10-20 11:03
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2019-10-23 08:30
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2019-10-23 16:19
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ibbyazam
2019-10-24 11:01
Hi Guys. Question which I can't find the answer to:
British Passport with Indian OCI (Lifetime visa). Cancelled my Tax residency in Uk as used to be a Tax resident of China up until March. Don't own a company.
Base is India but fly out and manage an eventss company in Dubai. Spend 3 weeks in different countries every few months setting up events and taking down events to be shipped back to Dubai. Haven't spent more than 180 days in one country this year.
2 companies pay me:
Get paid in GBP to my UK HSBC account from the event company account in the UK (freelance). - Tax bracket should be 40%
Get paid by a construction company in Indian Rupees (contracted) to my Indian HDFC bank account. - Tax bracket should be 5%
My question is - Legally should I pay taxes on my UK income?
Hope somebody can help with this!
simon
2019-10-24 11:36
@ibbyazam No, not if you are a non-resident performing all your work from outside the country.
ibbyazam
2019-10-24 15:42
Brilliant thank you @simon - Any pointer towards where to search for this info would be appreciated also! Good News!
simon
2019-10-24 16:15
As long as you qualify as a non-resident for tax purposes in the UK, your foreign sourced income will be exempt. That generally includes work performed from outside of the country, even if for UK clients.
steve
2019-10-25 07:25
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2019-10-27 11:16
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prykhodko.av
2019-10-28 09:29
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prykhodko.av
2019-10-28 11:45
If you are British, non-resident in the UK, selling on http://Amazon.co.uk FBA to UK customers from the UK based fulfillment center products sources from EU.....would it be still considered as foreign sourced income by HMRC?
prykhodko.av
2019-10-28 13:51
Dear Everybody,
I joined today the community and looking forward to learn and participate :slightly_smiling_face:
I am British Ukrainian with dual British and Ukrainian citizenship residing in Liverpool, UK.
I plan to relocate to Spain (time to be spent in Spain would be less than 6 month per calendar year) and Ukraine (less than 6 month per calendar year) and possibly less than one month in the UK per calendar year.
I am running eCommerce business mainly selling goods in the UK sourced from the EU via UK fulfillment center.
At the moment I am selling as an individual (sole trader UK) and also as UK Ltd company which is not an optimal tax structure to he honest.
I am considering following steps:
1. Advising UK Tax authorities HMRC that I am relocating to Ukraine as I have parents address there and I am paying parents house bills from my Ukrainian bank account. In Spain it is just a rented place via Airbnb, also it is not a low tax country, that?s the reason why I would not spend more than 6 months in any calendar year in Spain nor open a bank account, etc.
2. I am considering setting up US LLC or alternative? What are the best options to consider?
3. Would I need a holding company, based off shore if I open US LLC or UK LLP?
4. I believe I would also need to register the new structure for the VAT in the UK, as I am using fulfillment center in the UK to supply UK customers.
Sorry for a bit too long post, looking forward for your opinion and advice, thanks a lot
prykhodko.av
2019-10-30 22:19
After speaking with @simon the plan is to proceed with US LLC and Estonian holding company which seems to an an interesting combination :+1:
tiagomdreganha
2019-10-31 15:47
You will need to get a UK VAT number for US LLC correct?
prykhodko.av
2019-10-31 15:59
That?s correct, especially with the FBA option holding stock in the UK
prykhodko.av
2019-10-31 22:24
And the answer is....it would be considered as foreign source income :)
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2019-11-06 14:02
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2019-11-07 15:03
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2019-11-08 04:37
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2019-11-08 14:33
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2019-11-11 11:13
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mikael.sandvill
2019-11-11 11:30
hey all! good to be here! Here's my situation, looking for some advice. I'm a Swedish citizen, but I live in Poland, where I'm a resident and now operate my company out of. While income tax is only 19% I'd like to have a corporation with close to 0% tax where I pay myself a salary in Poland, and pay taxes on that. I'd like to be setup in a country that works with Stripe, and for example I was looking at Slovakia where it seems you can have a corporation and as long as HQ is outside of Slovakia you are only taxed on domestic income (which in my case would be slim to none).. Would that be a viable option? Or where do I go from here?
omocha_10
2019-11-11 12:31
Hi, I am an Argentinian/Spanish citizen. I thought I was going to become tax resident in Portugal so I resigned from Argentina, tough I didn?t need it as I?ve been abroad for 12 months.
But now I?m not going to become tax resident in Portugal, so it?s not clear where I stand regarding taxes as I haven?t decide where to become tax resident(I have Spanish passport on ancestry, but I don?t have anything there and I never lived there.
omocha_10
2019-11-11 12:32
If I earn capital gains now, where I should tax them?
omocha_10
2019-11-11 12:34
As I travel most of the year, seems that Malta is the place to sign in. Any advice on that would be highly appreciated.
omocha_10
2019-11-11 12:35
Thanks
silvafelipe37
2019-11-12 14:40
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rogerio.cadan
2019-11-12 14:58
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gun
2019-11-14 08:12
Hi Robert from Sweden living in Poland :wink:
mikael.sandvill
2019-11-14 08:13
:slightly_smiling_face: heybuddy
gun
2019-11-14 08:13
I think Estonian company might be worth looking into, but let @simon chip in - he has more experience in Europe
mikael.sandvill
2019-11-14 08:14
yep thats what simon said.. applied for e residency yest :slightly_smiling_face:
kristinj
2019-11-14 11:47
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prykhodko.av
2019-11-19 07:31
Thanks @tdibaja did HMRC confirmed that position in writing (UK sales are not UK income for non resident LLP). Just in case HMRC will go down the line the profits are taxable in the UK, it would not be possible to rely on original call conversion with HMRC to counter their decision. Maybe I overthinking this topic a bit.
ray5turtle
2019-11-20 22:47
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moran
2019-11-22 01:03
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norman.pend
2019-11-22 08:42
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simonyepu
2019-11-26 09:14
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nikolay
2019-11-28 16:14
Would you expect to have any issues when opening bank accounts for a US LLC that is having a Seychelles IBC as it's single member (for holding purposes so that profits end up in the Seychelles IBC instead of direct to the individual which will need to tax them in his country of residence) considering the fact I have no issues sharing who the UBO is?
E.g. opening an account with Mercury or Transferwise or even if I walk in physically in a bank in the USA?
mikeseo
2019-11-29 01:08
yes, I tried to open a citibank account in person with my US LLC and mentioned it was owned by a Belize IBC and the lady there got scared and referred it to some kind of internal review and they denied the account. I'm a US citizen. I think US banks are scared of offshore companies.
mikeseo
2019-11-29 01:08
I'd try to open the US bank account with the LLC and not mention the IBC.
simon
2019-11-29 01:17
They are required to do an additional review, as per OECD rules. Any connection with Belize, Seychelles and most of the other countries offering IBCs will trigger this requirement.
It will be a lot easier to open bank accounts if your holding company is in a lower risk jurisdiction (Estonia, for example).
nikolay
2019-11-30 14:39
Sounds like a good idea indeed. I will research that one a bit more.
nikolay
2019-11-30 14:39
Any other alternatives to Estonia?
simon
2019-11-30 14:50
Latvia and Georgia have similar tax systems (no taxation until distribution).
nikolay
2019-11-30 15:43
Estonia is easier to handle all online though.
nikolay
2019-11-30 15:43
Any way to get the money out of the Estonian company mostly tax free?
nikolay
2019-11-30 15:43
E.g. have it pay my Seychelles IBC as the 20% tax is steep.
nikolay
2019-11-30 15:45
Also wouldn't Estonia CFC rules kick in and treat the USA LLC as a local company for tax purposes?
simon
2019-11-30 16:26
You can pay a salary to yourself from the Estonian company (tax-free if you are a non-resident).
As for Estonia?s CFC rules, they are irrelevant here as you are already required to report all profits earned by the LLC.
odock
2019-11-30 19:20
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justin187
2019-12-01 10:32
Can anyone recommend an accountant in Thailand to help file tax returns? Preferably based in Chiang Mai.
d.lasallesutherland
2019-12-04 16:04
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ivan.lakatos
2019-12-05 05:00
Has anyone have any news about Iglu's situation by the way? I seem to remember they can't provide working permits/visas anymore for Thailand?
pedrofelipesales
2019-12-06 02:19
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pk
2019-12-07 00:42
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bebetto
2019-12-09 02:19
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endeavorseven9
2019-12-11 13:42
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antoine.rousseaux02
2019-12-11 13:53
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s.lemos1
2019-12-12 13:56
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p2fsolutions
2019-12-12 20:09
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lartur.eng
2019-12-13 13:40
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2019-12-15 07:43
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bigeyegordon
2019-12-16 13:48
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p2fsolutions
2019-12-17 03:19
Hi All, i apologise in advance for my lack of know how on this it will be my 1st possible overseas venture...
Currently a Uk resident looking to start a bussiness in california on a E2 visa.
The company needs to be based in ca as that is the only place i can deliver the end product due to the nature of which i am looking to sell.
Could some one point me in the right direction.
With a Wyoming llc holding company a Ca llc subsidiary and a uk ltd company. What would be the best way for me to arrange the bussiness structure for tax purposes.
Could the holding company charge the subsidiary for use of assets?
Should the uk ltd be under the holding company.
Where would i pay taxes.
All help would be appreciated.
Thanks
bigworld
2019-12-17 07:10
You will pay taxes in the single jurisdiction you are tax resident.
Your company will pay all its taxes in the jurisdiction where it is tax resident except if it has a permanent establishment (PE) somewhere else.
An LLC company is normally a pass through entity, so it will be the parent company the one to deal with taxes.
omocha_10
2019-12-17 10:30
Hi all.
By chance is there any Portuguese based accountant?
I was introduced to one, but I am looking for one more ?perpetual traveler/nomad/location independent minded?.
With an understanding of the possibilities and dangers of the lifestyle regarding taxation. Thanks
tiagomdreganha
2019-12-17 12:40
Hey Mario,
If you are a PT citizen & resident forget about not paying tax anywhere.
I don't know any accountant that is "nomad minded", but I've researched quite a bit on it, if you want, PM me your "case" specifics. I'll pass onto you what I've gathered so far.
You can't simply start travelling and "de-register" in Portugal, we don't have that option, you need to move your residency somewhere.
To do it right and avoid future problems, you'll need to move residency to a non-blacklisted country and have proper substance there, and have little to none economic ties with Portugal.
omocha_10
2019-12-17 13:12
Hi, I am not Portuguese citizen and resident.
I am not looking to not paying taxes anywhere.
p2fsolutions
2019-12-19 11:35
Thanks big world
donatobianchi
2019-12-20 06:44
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alexmaiatricolor
2019-12-20 15:08
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root
2019-12-20 16:59
Hey guys! Merry Christmas everybody!
One question, if I have Estonian company and I invoice another Estonian company. Do I have to charge VAT?
julianmb
2019-12-20 17:03
Yes
root
2019-12-20 17:13
Don't they mutually exclude each other?
rsm9qqnhleaa
2019-12-20 19:42
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tiagomdreganha
2019-12-20 20:00
No. If it's a business expense they will be able to deduct/claimback the VAT.
So if you were going to charge 10k for something you charge 10k+VAT.
tiagomdreganha
2019-12-20 20:02
Some business prefer to buy intra-EU but not inside the same country (that way the reverse charge mechanism is trigged and you don't pay VAT right away) but it's purely for cashflow reasons (or because trying to claimback VAT, if they don't have enough VAT to pay themselves, usually results in a tax inspection)
root
2019-12-20 23:49
Hey @tiagomdreganha do u have any resources where I can learn more about this?
My use case is: I will charge for software dev services but I would like to not charge VAT so the client ordering them can have a lower invoice. Or charge VAT, but they can claim it back. Not sure how that works.
root
2019-12-20 23:50
I didn't open the company yet just planning once I understand these mechanics and if they make sense.
tiagomdreganha
2019-12-21 00:48
Software dev services is definitely a business expense.
You should charge the same you were going to charge before and add VAT on top of it. As a business, VAT is not relevant on purchase invoices because you'll claim it back later.
To give you an example, in Portugal all B2B prices are discussed exVAT even tho the invoices will be incVAT.
bergfuerst
2019-12-21 21:08
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nikolay
2019-12-23 08:57
Hey Guys!
I am planning on setting up a US LLC where I am the 100% owner as an individual. I originally wanted to have my Seychelles IBC as the owner in order to run it completely tax-free (as otherwise I still have to pay divident tax in my country of residence for the LLC profits) but that would pretty much mean no banking options for me.
I researched different banking solutions and even an Estonian Ltd owning the LLC wouldn't help that much with banking options and just complicates things quite a bit.
So I've been thinking just keeping the US LLC at a very small (or not profit at all) by paying from the US LLC to the Seychelles IBC for consultancy fees or for the use of some sort of software etc. Do you have ideas what is the best option here to handle those payments (how to justify them), will the IRS care at all about this as these are considered related entities payments and how to properly mark this under the 5472 IRS form that needs to be filled out now by US LLC owned by non-us individuals?
simon
2019-12-23 09:04
The IRS won't care, if everything is done at arms-length, but your country of residence probably will (as your IBC may have a tax liability there).
nikolay
2019-12-23 10:02
Well I am owner of both the LLC and IBC so it isn't exactly arms-length.
nikolay
2019-12-23 10:02
Country of residence wont as the CFC rules imposed are only for corporations owning offshore corporations.
nikolay
2019-12-23 10:03
They didn't apply the Individual owning offshore corporations regime.
simon
2019-12-23 10:18
Arms-length in this case refers to pricing (the prices your IBC charges your LLC must be market rate).
Also, nearly every countries have place of management rules. They certainly apply to IBCs, especially those receiving active income.
r.bormann
2019-12-23 10:50
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kolyakin
2019-12-23 15:55
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michal.opoka
2019-12-23 21:36
If I register LTD company in UK, but manage it from Poland so it would be tax resident in Poland under DTT what obligations will it still have in UK (assuming I don't do any business in UK)? Poland is likely to introduce Estonian taxation for small limited companies next year, but our company law is very bad so I'm wondering if tax migrating foreign limited company here wouldn't be a good idea.
simon
2019-12-24 02:41
@michal.opoka It will have to file dormant accounts and a confirmation statement. There will be no need to report any transactions or file a corporation tax return.
nikolay
2019-12-25 18:01
And if this Estonian company is managed and operated in Bulgaria would the place of effective management kick in then and make it liable to corporate tax and reporting in Bulgaria?
simon
2019-12-26 03:23
Yes, in most cases it would.
iamvaillancourt
2019-12-26 16:22
Does anyone know if I get US and Canadian and European sourced income, and I stay in Russia on a tourist visa, do I need to pay taxes in Russia
ouafouaf
2019-12-26 16:47
As for EU, making money in EU = pay tax in your Biz fixed residence country (invoice address)- where is it registered ? - turism residency would not matter i believe.
victorfragaceotto
2019-12-26 23:51
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julianmb
2019-12-27 03:06
No if you don't stay more than 183 days and they don't consider you tax resident
kolyakin
2019-12-27 14:24
Hi! I am looking for a good english speaking accountant in Bulgaria. Is there anyone trustworthy you could recommend (preferably in Varna), who could help to service a few small companies, also helping with the most effective tax arrangements. Thank you!
994kaloyan
2019-12-27 17:47
I can connect you with the right person lol
994kaloyan
2019-12-27 17:47
Exactly in Varna as well.
diegoreymendez
2019-12-28 15:22
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diegoreymendez
2019-12-28 16:06
Hello folks. I'm currently living in Argentina and selling software to the US. The situation here isn't great as I'm being forced to get all payments sent to a local bank and converted to our national currency (which is a joke).
Since I have the Italian Citizenship too, I was planning on moving there next year, so I can at least avoid the currency conversion problem. A few questions about this:
1. If I decided to open a company in Estonia, what would I need to do to ensure that the company's tax-residency is not disputed? Would it help if the company was a society with other devs from other countries?
2. Would paying myself a salary through a bank transfer to Italy be excempt from the 20% tax in Estonia?
Please feel free to think outside of the box as I'm not very well versed in these topics yet. Any alternative suggestion to get the best results would do.
michal.opoka
2019-12-28 21:47
@diegoreymendez 1. Check double taxation agreements between Estonia and Italy/Argentina - in most of these agreements Estonian company is always resident in Estonia, but beware of Italian/Argentinian CFC or anti-avoidance rules
2. I don't think it would be exempt.
3. I think that if currency/bank is the main issue for you then what you most likely need is US LLC https://www.freedomsurfer.com/wyoming-llc/ with bank account in US
paul.giannotti
2019-12-29 14:40
Hi Mario, out
paul.giannotti
2019-12-29 14:43
Out of curiosity, why did you rule out Portugal? I was also looking as Portugal's NHR program, as I'm Australian but also have an EU passport. I would be running a foreign company in the UK. I was hoping that I would avoid tax on 'foreign earned income', but the closer I look at it, it seems if you're managing the business while in Portugal, it may not be deemed as tax exempt. Interested to hear about your situation mate.
paul.giannotti
2019-12-29 14:48
Hi Simon, interesting approach with paying a salary. If you're paid a salary from a foreign company, would this be classified as foreign earned income?
omocha_10
2019-12-29 15:58
Hi Paul. I didn?t rule out Portugal. Every situation is very personal and relates to context. I am not Australian and don?t know the Australian rules to stop beign resident over there.
I don?t know nothing about UK. And I am not a professional to give advice.
I think Portugal can be a great place, but depends on each particular context.
Cheers
diegoreymendez
2019-12-30 04:10
Thanks!
The problem I have with a US Llc is that:
1 My US client for some reason wants to pay me to an account in another country.
2 The client being in the US would make the company payments subject to US taxing I believe?
My main concern is being paid in USD or Eur, but if I can rethink how to get paid in a way that?s advantageous to me in terms of taxing, I?d like to consider that too.
simon
2019-12-30 05:47
@diegoreymendez 1. You could use TransferWise to get paid, they offer EUR IBANs to US companies (that would satisfy your client's requirement I imagine)
simon
2019-12-30 05:48
2. What matters is where you work, not where your clients are located. If you work from outside of the US, your US LLC will usually not be deemed to have any taxable US income
simon
2019-12-30 05:48
@paul.giannotti Only if the work was also performed overseas.
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2019-12-30 08:29
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brendan.keena
2019-12-30 10:18
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michal.opoka
2019-12-30 12:28
@diegoreymendez https://ustax.bz/non-us-entrepreneurs/ check this regarding US taxation, I'm not sure why your client don't want to send to US bank account, maybe some myths about US taxes. Keep in mind that you should report all LLC income in your country of residence. Maybe there are some legal tricks in Argentina which could help you lower or zero your tax legally, but other than that you would have to move to country like Panama.
simon
2019-12-30 12:35
@michal.opoka There was a discussion here a few months ago about how it is possible to live tax-free in Ushuaia (in the free trade zone). That could be an option @diegoreymendez, if you don?t mind the weather.
omocha_10
2019-12-30 17:49
@diegoreymendez, why you say you are obligated to send your payments to a local bank? You can receive your payments in any bank in the world you have an account. After receiving it you can leave them there or transfer them wherever you want.
I read that in Argentina you get paid one or two % for sending money to the country, plus, you can exchange that money at the real exchange rate.
As for moving to another country, if you move to Europe have in mind that you will spend in EURO and in European prices.
diegoreymendez
2019-12-30 17:56
@omocha_10 - If you export services and register your payments officially (through AFIP), you?re obbligated now to transfer those payments to a local bank within 5 days, and get the payment exchanged to pesos. This is the official / legal route.
You can of course not declare the remote bank account and not declare the payments, but that?s a bit of a different path than what I?m looking for - and it brings other issues.
michal.opoka
2019-12-30 18:14
Damn, that's really bad
michal.opoka
2019-12-30 18:19
I think LLC should help here since technically it's money of US company not yours, but you should consult this with Argentinian lawyer/tax advisor
diegoreymendez
2019-12-30 18:22
Thanks @michal.opoka - I?ll look a bit more into it then.
michal.opoka
2019-12-30 18:28
maybe you will need something more complex like hiring independent manager for LLC who can legitimately say that moving money to Argentina is not a good idea and his fiduciary duties to the company prevents him from doing that. or maybe give someone from abroad you trust like 5% of shares and state in LLC's operating agreement that withdrawals require unanimous consent
michal.opoka
2019-12-30 18:33
and not declaring remote bank account is very bad idea since most countries are in https://en.wikipedia.org/wiki/Common_Reporting_Standard so Argentinian government would know about this
diegoreymendez
2019-12-30 18:34
Yes exactly - this is what I meant with ?other issues?. I?m trying to figure out my best steps so all this info is appreciated.
diegoreymendez
2019-12-30 18:43
Our of curiosity, if the Llc was owned by myself living in Argentina and someone else living in a different country? would that make things different?
I have a colleague working for the same client so setting up an Llc would be doable I guess.
michal.opoka
2019-12-30 18:49
There is more US paperwork (but not taxes) if there is more than one owner (but you can also use UK LLP with the same result), but it could make your case stronger - but that's the question to Argentinian lawyer
omocha_10
2019-12-30 18:51
@diegoreymendez I think it all depends on how you understand the money you make. If it?s money to pay the bills and live month to month it?s not so bad to receive payments in Argentina. But if you are making money and building wealth, you could consider stopping being an Argentinian resident. Depending on where you live in Argentina, you could move residence to Uruguay, Paraguay, Chile. Have a look at FS guides to those countries.
omocha_10
2019-12-30 18:52
I believe in Paraguay and Uruguay you are not going to be taxed on foreign income/profits.
michal.opoka
2019-12-30 19:02
@omocha_10 having to convert all your income into unstable currency with high inflation means you can't really save anything since in short time your money can be worth nothing so it's even worse than high taxes
diegoreymendez
2019-12-30 19:03
Yeah, basically that?s what triggered my investigation - I?ll be having some savings this year from that client, and converting to pesos (I mean this goes beyond just taxes in itself) is a bad idea for me in general.
diegoreymendez
2019-12-30 19:03
Makes it so much harder to save.
michal.opoka
2019-12-30 19:04
maybe consider asking your client to hold all payments until you find a solution
diegoreymendez
2019-12-30 19:04
Well I still have monthly payments to take care of, due to previous debts (so I need to keep it going now), but once those are covered I could do just that.
michal.opoka
2019-12-30 19:05
yeah
prykhodko.av
2019-12-30 21:05
I am interested as well, thank you
ndg1ndg
2019-12-30 21:36
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paul.giannotti
2019-12-30 23:17
Cool - cheers Mario
paul.giannotti
2019-12-30 23:24
Hi @simon, this is a point that I could use some help clarifying. I was previously looking at residency in Portugal, to use the NHR. But let's say I'm in Portugal managing the business, from what you're saying here - the income is NOT foreign earned, and would be taxed as regular income?
omocha_10
2019-12-31 02:17
@diegoreymendez I think your options are moving abroad, moving to a nearby country like Uruguay/Paraguay/Chile or to stay in Argentina receiving in local currency 100% of your income or staying in Argentina receiving only the money you need to live month to month, while leaving the rest in a foreign bank in a foreign currency. If you stay in Argentina, you will have to pay taxes in Argentina and receive it in Argentinian currency. If you move to Uruguay, Chile, Paraguay, I believe you will not have to pay taxed on your income as they don?t tax foreign income....But you will have to move and spend at least 183 days per year in those countries and I believe no more than 60 or 90 in Argentina.
omocha_10
2019-12-31 02:20
@diegoreymendez Your other options is not to live in any country more than 183 days per year, and of course, moving to an EU country.
I believe Argentina considers you have resigned after spending 12 months abroad.
But I am not professional CPA or lawyer, you should check this information with a pro
julianmb
2019-12-31 02:25
I have good news for @diegoreymendez. IRS doesn't exchange information with Argentina yet. So it could be a good idea to form a US LLC https://www.irs.gov/businesses/country-by-country-reporting-jurisdiction-status-table
michal.opoka
2019-12-31 02:58
Argentina is also not in FATCA so now I don't think anything would be reported from US at all, however it says they are negotiating so they might make a deal in few years and Argentina could also get past data from before agreement was signed
michal.opoka
2019-12-31 03:06
nevertheless LLC should be able to solve currency problem, but this should be consulted with Argentinian tax advisor
simon
2019-12-31 06:16
Correct, although you may be able to apply for the 20% flat rate if your profession is on the list.
simon
2019-12-31 06:16
If you live full-time in Portugal and manage the business from there, you may also have to worry about the business itself being a Portuguese tax resident.
simon
2019-12-31 06:18
The NHR program is useful primarily for EU citizens traveling perpetually (who maintain their tax residency in Portugal but spent most of their time abroad) and for those that receive foreign-sourced income (either passive or from a business run and managed overseas).
omocha_10
2019-12-31 22:51
My nephew?s girlfriend in Argentina, tells me she get paid as service provider and freelancer in her US account. Then when she needs money she is planing to get it sent by an ?exchange office? where she says they will pay her 1% for taking money into Argentina, and then she will exchange it cash, this way, getting 30 to 50% more than the banks would give her.
Not sure it is possible to do this, but looks good, USA don?t exchange information with other countries, and personally I find it difficult to believe Argentina are going to make them change their policies.
lauren
2020-01-01 13:47
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michelle
2020-01-01 18:49
anyone used the Portuguese NHR or familiar with it? is it still in force? the article says it was introduced in 2009 and that the government might cancel it in the near future but there's no article date https://www.freedomsurfer.com/portugal-nhr/
tiagomdreganha
2020-01-01 19:40
still in force and I don't think the PT gov will cancel it anytime soon. They actually made it easier last year, before you had to get residency and apply for NHR, show proof of your status etc.
Now I think you can get NHR right away and only need to show proof later if they ask.
michelle
2020-01-01 19:49
thanks
994kaloyan
2020-01-02 09:39
looking into this as well.
si006
2020-01-02 20:37
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a.adriano.bueno
2020-01-03 02:54
Hi all,
Happy New Year.
I'm not a US resident, have a WY LLC that I use to trade stocks/options in the US and would like to confirm one point regarding taxation.
When receiving a dividend from a stock/ETF should I pay the 30% tax above it or since I'm a non-resident LLC owner it wouldn't apply?
julianmb
2020-01-03 03:00
"foreign source of income is generally exempt" This means I can run a Wyoming and a HK company without paying for the dividends?
donatobianchi
2020-01-03 12:00
What are the most common ways used to avoid paying tax on personal income?
i have a company on my name that already pays tax, i would like to get the dividends without having to pay tax on it, any suggestions or any Country i can move to that allows this?
andycostesfr
2020-01-03 18:59
Find a country where personal income is not subject to taxation. Simon has listed and reviewed some here : https://www.freedomsurfer.com/freelancing-legal/
simon
2020-01-04 07:30
Yes, if you run the companies from outside Portugal.
ivo
2020-01-04 08:56
Hey @simon, just read your article about Ukraine. Sounds like Ukraine is following very much the Georgian footsteps. Georgia has implemented that same scheme a few years ago, and since last year you only pay 1% in turnover tax for the first 170k USD. You mentioned that once registered as private entrepreneur you are immediately considered a tax resident. From my experience here in Georgia, this is not the case. While you get a tax ID (which btw is different from the tax ID you have as individual) the moment you?d apply for a tax certificate the revenue services would check if you?d actually spent 183 days in the country. I cannot imagine that the Ukrainian taxman would be any different, let alone even give a tax certificate to a tourist. Have you heard of any tourist getting a tax certificate in Ukraine?
simon
2020-01-04 09:51
@ivo I'm not sure about whether it would be possible to apply for a tax certificate without having spent any time in Ukraine but the law does state that private entrepreneurs are Ukrainian tax residents and are subject to taxation on their worldwide income. http://taxsummaries.pwc.com/ID/Ukraine-Individual-Residence
ivo
2020-01-04 10:30
@ivo I see - that does sound like a worse version of the Georgian private entrepeneur scheme then - since you pay 5% of turnover tax and are subject to taxation of worldwide income.
What would be interesting to know is if there are turnover limits, if they exclude any type of business activities (ie in Georgia you are not allowed to work as consultant) and whether you declare monthly or annually?
michal.opoka
2020-01-04 12:04
@ivo Keep in mind that Ukraine is extremely corrupt country so whether you get certificate or not will most likely depend on whether you give bribe or not.
marcin
2020-01-06 06:39
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openaccessconsultingl
2020-01-07 13:28
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prykhodko.av
2020-01-07 13:53
Hello @ivo I am in the process of setting up private entrepreneur in the Ukraine. There are some limitations on activities, yes, but consultant services are allowed. There are also a limit but it is very large one.
prykhodko.av
2020-01-07 13:58
I?d say it is a bit of exaggeration about corruption, suggest checking with local accountant about tax certificate
ivo
2020-01-07 14:02
Hey @prykhodko.av, thanks for the link. Need to look into it more thoroughly but it does make it look more interesting. Would be great if you could share your experience on implementation once you have completed it. Also, do you have any idea how thoroughly arm?s length principle is applied on related parties in UA? I mean, it seems like management activities are excluded with the PE, but could I just consult my own company and syphon profits from it at a lower tax base?
prykhodko.av
2020-01-07 14:14
No CFC in Ukraine but some bits and pieces are in the development, that?s could be potentially implemented: https://sk.ua/news/controlled-foreign-companies-new-draft-law-beps-action-plan/ it seems if CFC profit is less than one million, it might be ok, subject to the final version of the legislation.
replay
2020-01-08 20:50
Don't know if there are a lot of permanent residents of Paraguay here, but if you are, this might interest you:
I'm a permanent resident of Paraguay since 2017. This week I've learned that starting from Jan of 2020 (now!) Paraguay has changed it's tax law and it now includes your global income to calculate the personal income tax, not only the Paraguayan income anymore. Multiple accountants told me that in reality the Paraguayan tax authorities don't have the technical capabilities yet to check the global income of their residents, so at the moment it's still possible to fly under the radar, but technically the global income should be reported from now on and in the future they might upgrade their technical capabilities
replay
2020-01-08 20:52
I'm now considering Panama residency, because of this change in the Paraguayan tax law. At the same time I'm worried that Panama might make the same change soon, because apparently Paraguay has only changed their tax law to consider global income because they've received a lot of external pressure to do so, and I'm sure Panama feels the same pressure too
replay
2020-01-08 20:54
Would be annoying if I put a lot of effort into switching to Panama residency, and then they also change their law to consider global income instead of territorial :joy:
alan.c.park
2020-01-09 06:23
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pierre.berthalon
2020-01-09 09:39
It's getting harder to find freedom in this world..
karim
2020-01-09 10:05
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omocha_10
2020-01-09 12:14
Do you spend the 183 days in Paraguay?
I guess in Paraguay there might be a migration crisis with all the wealthy Argentinians running away after the new tax laws over there.... 2.5% over investments abroad vs 1.25 % investments in Argentina where you can only buy 200 usd per month with a 30% tax.
Also 30% tax on payments made with credit cards on foreign currency(plane tickets, accomodation abroad, services like Netflix, Spotify, Amazon, restaurants abroad etc)
replay
2020-01-09 13:35
Yes, I'm spending most of my time in Paraguay
replay
2020-01-09 13:36
I know, the Argentinian situation is getting kind of crazy. 2 weeks ago I drove over there by car and filled it with wine and beer, because now that their currency is on the floor everything is super cheap
donatobianchi
2020-01-09 15:18
Hi Guys, Do you know of any Countries i can move to that will allow me not to pay tax on personal gains? anywhere close to Europe that you may know of? or ways to funnel money to a company in a tax heaven but actually be able to use the balance given to the company for personal purposes.
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2020-01-09 16:18
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b34rdays_fsurf
2020-01-10 06:31
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diegoreymendez
2020-01-10 13:40
A bit nitpicky (I realize that it?s a technicality) but the 2.5% is on assets (that?s 2.5% of the asset values), which makes it even worse.
I mean to say: it?s not just 2.5% of investment earnings or anything like that.
replay
2020-01-10 13:46
I went to Argentina 2 weeks ago. One thing that I noticed was that every evening in front of every ATM in the city there was a huge line of people taking out cash. they seemed to be waiting there for hours, every evening. Does somebody know what this is about? is it also because of some weird restrictions which they have there?
diegoreymendez
2020-01-10 13:49
AFAIK, it?s mostly because due to the inflation, a lot of stores give you ?discounts? if you pay in cash (in truth you are given a higher price if you use the credit card). Also, people tend to prefer dealing in crash most of the time because it makes it much more difficult to track payments, etc.
For example if you have saved money that?s not reported, taking cash out of the bank allows you to account for it. The cash you take from the bank can be used for daily expenses (since thos expenses aren?t tracked), and you report that money you took out as a saving.
diegoreymendez
2020-01-10 13:49
There?s a lot of stuff like that.
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2020-01-10 14:30
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giovannilaperna
2020-01-10 15:44
really useful information @replay
giovannilaperna
2020-01-10 16:38
@replay which is your source of information? This is the tax original text: https://www.stweb.com.py/ley-numero-6380-ano-19-d149787059-23.html and Art° 48 about the IRP is still referring *to* de fuente paraguaya
replay
2020-01-10 16:56
At first it was just somebody telling me about it. Then i asked my accountant and he said it's true that now the global income is taxed, but the specific rules are not very clear yet. Then I asked another accountant who said that certain types of incomes are globally taxed, although not necessarily all types. Then i googled and found articles like for example this one: https://www.ferrere.com/es/novedades/paraguay-is-about-to-undergo-a-modification-of-its-tax-law/
saying `Partially replaces the source system currently in force by the worldwide system of taxation.`
replay
2020-01-10 16:57
tomorrow at 14:00 i have a meeting with another accountant who is specialized on expats in paraguay. he is supposed to be able to tell me more details
replay
2020-01-10 16:57
after that meeting i can let you know what this guy told me
replay
2020-01-10 17:03
one thing which consistently everybody told me was that if you have foreign sourced income which needs to be taxed in PY, then it's usually the banks enforcing that taxation. because they're supposed to decline inward transfers for which they don't have proof to show the money has been taxed. in my case this is no problem at all, because i just always pay everything with foreign cards
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2020-01-10 17:09
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omocha_10
2020-01-10 19:15
@replay My friend tells me that in Argentina ATMs usually there is cue because banks should put more to satisfy demand. Lots of bad things can be said about Argentinian taxes, laws, politics etc... But, regarding capital appreciation, real state historically have been always a great investment. Though right now. most investors, they tell me, are people who have pesos and the chosen investment are ?bricks?(Argentinian term for real state) because of the 50% yearly inflation and the restrictions and taxes to buy USD, Euros, Pounds, CHF, etc
michal.opoka
2020-01-10 20:11
looks like a recipe for future housing market crash to me
omocha_10
2020-01-10 20:19
And ....... a bankrupt country, with a non existent currency unexchangle even in Argentina.... since forever, real state prices are in US dollars, rents were in us dollars, but since 2012 they are in pesos, except for premium buildings or if the rent comes from Airbnb, Booking etc....
The Argentinian market had rebounded a lot and fast since the new government ?arrived?.
Banks, energy companies and real state have been surging fast.
ADR?a IRCP, CRESY are real state companies, and CITO(no adr yet).
michal.opoka
2020-01-10 20:21
yeah it's a common scheme - politicians mess up something and they then try to fix it and mess it up even more
michal.opoka
2020-01-10 20:22
but I agree that Argentina is one of the worst cases of it
ryanacater
2020-01-11 09:29
Hi Guys
I am a forex trader and looking in to optimising my taxes. I am a UK citizen and from the research I've done so far I am interested in utilising the Cypriot Non-Dom program, becoming a non-tax resident in the UK and forming an offshore corporation where I can then receive dividends tax free in Cyprus.
I was looking at the potential of opening a LTD company in HK but it seems opening a business bank account there is going to be near on impossible, so I then looked in to options like Neat/Currenxie but they wont open accounts for businesses that trade (forex/stocks/crypto etc). I then looked in to a Wyoming LLC but then I have the issue of my broker not accepting US clients and US forex regulations not being very favourable in terms of leverage amongst other things (I capital partition to limit risk exposure so require greater than 50:1 leverage).
So everything I have looked at so far seems to have a stumbling block so if there is anything anyone can recommend I would greatly appreciate it!
Cheers!
michal.opoka
2020-01-11 13:55
if you will not be non resident in UK then maybe UK's LLP or LTD could actually be useful here?
alexbadaoui1
2020-01-11 14:00
Hello fellow FX trader!
I would pay for the residency permit in the bahamas, open and IBC in the BVI - open a transaction account with transferwise and use darwinex as your broker
ryanacater
2020-01-11 16:08
Hey @michal.opoka, if I?m not mistaken then there would still be corporation tax to pay on a UK LTD on any income earned at home and overseas. Ideally looking to find somewhere like HK/Wyoming where you don?t get charged tax on income earned outside of the country, then pay myself dividends which is not taxed for non-doms in Cyprus.
elsamadrolle
2020-01-11 16:09
Here is an update from this week.. https://www.lisbob.net/en/blog/end-nhr-tax-regime-portugal-2020
michal.opoka
2020-01-11 16:10
hey, not if LTD would be managed and controlled from another country with which UK has double taxation treaty
michal.opoka
2020-01-11 16:12
but you can also use LLP (with 2x Wyoming LLC being members of it)
ryanacater
2020-01-11 16:15
@alexbadaoui1 Hey man, I?ll look in to the residency permit in Bahamas thanks! Ideally though wanting to try and work it around obtaining residency in Cyprus. Will have a look in to an IBC in the BVI when I get home, cheers!
ryanacater
2020-01-11 16:17
Aaah ok, looks like I need to look in to this further then thank you! Do you have any guides or links for me to research this further? Thanks again
michal.opoka
2020-01-11 16:18
actually Freedom Surfer has very good guides
ryanacater
2020-01-11 16:18
Yeah I guess skipping the UK guide didn?t help as I didn?t think it would be applicable haha cheers man
michal.opoka
2020-01-11 16:24
yeah, it all depends on situation for details you can ask Simon, he knows the subject really well
ryanacater
2020-01-11 16:29
Thanks Mikeo! Yeah I saw his blog post regarding his forex journey which is one of the reasons I signed up here. @simon Any further advice or guidance on this subject would be greatly appreciated!
michal.opoka
2020-01-11 16:32
Yeah I had some experience with Forex too many years ago, but I was on breakeven in the long run and abandoned it after some time, nice to know it worked for you
burrup.lambert
2020-01-11 18:54
Have you considered the regulation requirements for your offshore corp? You may need to be regulated under their financial regulatory body, FCA for UK, CySec for Cyprus etc.
ryanacater
2020-01-11 19:35
@burrup.lambert I?m pretty sure this won?t be required as I?m not intending to take on external investor capital or offering any services, the company will be solely as a vehicle for my own funds.
simon
2020-01-12 07:55
@ryanacater If you are based in Cyprus, you can register a Limited Company in the UK and have its tax residency transferred to Cyprus. It will no longer have to file corporation tax returns with HMRC (it will still have to file accounts and a confirmation statement with Companies House). It will instead be taxed as a Cyprus company (flat 12.5% rate). Dividends received from it will be exempt from taxation if you are a non domiciled tax resident. While this is not a 0% tax setup, it's fairly reasonable and will offer you access to UK brokers and banks. https://www.gov.uk/hmrc-internal-manuals/international-manual/intm120070#IDABC25
ryanacater
2020-01-12 08:23
Hey @simon thanks for the reply! That does seem like the easiest route and like you say pretty reasonable! Is there anywhere you would recommend that doesn?t charge Corp tax? I don?t need a UK broker as since the ESMA regulations came in to force you can only achieve 30:1 leverage in the EU so my current broker is offshore.
elsamadrolle
2020-01-12 08:57
Hi.. I am looking at NHR in Portugal with a U.K. LLC.. and trying to figure out whether it?s possible to lower the 20% tax for approved professions under NHR by claiming the number of days spent outside Portugal. So say 150 working days spent in Portugal taxed at 20% since Portugal-sourced income due to place of effective management.. and 0% for the remaining days due to travelling and working outside Portugal. My clients are in Asia. I suspect I need to clear this with a Portuguese accountant but wanted to check here first if anyone has looked into this.
ivo
2020-01-12 09:08
Hey @ryanacater, you may want to look at countries with territorial taxation like Philipines or Georgia. No corporate setup required as none of them taxes FX trading on an individual level.
I?m trading my own account as well and have moved to Georgia 3 years ago. Never regretted that decision.
giovannilaperna
2020-01-12 13:30
@replay any news from your meeting will be really appreciated.
replay
2020-01-12 13:32
Yeah, apparently as long as your income is not sent to a paraguayan bank account and the source is also not a paraguayan bank account you still have nothing to worry about. That accountant kept repeating though that this might change soon. Sorry for the false alarm
replay
2020-01-12 13:33
F.e. in my case I'm receiving most of my income from a US company and they're sending it to my bank account in Singapore. In this case there's still nothing to be taxed
replay
2020-01-12 13:35
But if you want to send a lot of untaxed money into your paraguayan bank account (even from your own foreign account) it might get complicated because the paraguayan Banks will want to see proof that this is all legal
ryanacater
2020-01-12 13:47
Hey @ivo thanks for the advice! I spent a few months in the Philippines last year and don?t think it really fits for me but I?ll definitely check out Georgia thanks!
giovannilaperna
2020-01-12 14:45
Thanks a lot for your sharing. I'm currently in europe but I will check with an accountant when back to Paraguay. I also never use my paraguayan bank account.
alexbadaoui1
2020-01-12 18:15
is that just forex? would stocks / bonds / options also be tax free?
ivo
2020-01-12 18:34
@alexbadaoui1 Any capital gains of publicly traded instruments that are listed on a Georgian exchange and private instruments that are not related to a Georgian source.
ivo
2020-01-12 18:40
You?re welcome! Btw - if you?re a UK resident why not spreadbet instead of trading spot. afaik it?s still tax free
alexbadaoui1
2020-01-12 18:40
thanks
ivo
2020-01-12 18:41
sorry that should say ?not listed on a Georgian exchange?
ivo
2020-01-12 18:42
So basically everything - since the only you can subscribe here are a few local bonds
ivo
2020-01-12 18:45
BTW - same applies to crypto: the National bank has ruled they are a financial instrument and as such no capital gains and no VAT is due
ryanacater
2020-01-12 18:45
Spread betting only seems to be tax free if it isn?t your primary source of income AFAIK unfortunately
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2020-01-13 13:18
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emilianod76
2020-01-13 21:46
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shaharhillel4
2020-01-14 01:11
LLC registered in Wyoming, USA. Non-US citizen, non US resident. Is anyone knows whether or not it?s required to file W8 form?
simon
2020-01-14 05:46
In my opinion, there are not a lot of appealing zero tax countries. If you travel perpetually, it's possible to register in a territorial taxation country to achieve zero taxation but not if you live there full-time. That is why I often recommend 5-15% options, they usually require far fewer lifestyle compromises.
simon
2020-01-14 05:48
@shaharhillel4 It's not usually required but you should file it to avoid being subject to withholding tax.
shaharhillel4
2020-01-14 10:29
Thx.
ryanacater
2020-01-14 12:45
@simon Thanks for clarifying. Im definitely leaning towards the option you suggested above.
I have read the info in the link you sent above and have further looked in to a UK LTD company being classed as a TNR and apparently HMRC can be a bit awkward when trying to request this status.
Do you have any advice on the order in which I should do things to make this process as smooth and seamless as possible
Should I -
Create my LTD Company now while still a tax resident in the UK and before moving to Cyprus ( I assume this would make the process of opening a UK business bank account easier?). Then once I have Cypriot non-dom status apply to have the company made a TNR and move everything across.
Or
Move to Cyprus and obtain non-dom status, at this point I will be a non-resident for tax purposes in the UK, create the UK LTD company then and immediately arrange for the TNR to apply.
I will be looking to move to Cyprus before the new tax year begins in the UK either way.
simon
2020-01-14 14:39
I'd recommend registering the Limited company while you are still a resident, to make the bank account opening easier (it will also be easier to apply for business credit cards and other credit products, if applicable). You should not use the company until you move to Cyprus, however, so as to avoid creating a UK corporation tax liability.
simon
2020-01-14 14:40
Do note that you'll need to call HMRC and tell them that your company is dormant. https://www.gov.uk/dormant-company/dormant-for-corporation-tax
simon
2020-01-14 14:41
Doing so will exempt you from having to file a corporation tax return.
ryanacater
2020-01-14 14:43
Thank you!! So glad I signed up here! :beers:
michal.opoka
2020-01-14 14:50
wouldn't LLP be actually better for someone being non-dom tax resident in Cyprus? As far as I understand non-dom status it means there is no personal income tax (assuming requirements are met) and any income from LLP would be subject to personal income tax only so this should result in no tax
simon
2020-01-14 15:06
The non-dom status only exempts you from the Special Defence Contribution (SDC). You still have to pay personal income tax on your worldwide income (dividends aren't subject to personal income tax, only SDC, hence why the above strategy makes sense).
michal.opoka
2020-01-14 16:06
ok, I see, so it would only be tax free if company was tax-resident in another country with no effective CIT assuming no permanent establishment would be created
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2020-01-14 16:25
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2020-01-14 18:50
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arkdeeplove
2020-01-15 09:31
Hi @simon I hope you are well.
I found this article about Bulgaria, do you have any idea is what they are saying here is still relevant?
https://trifonov.info/en/eu-freelancers-lowest-taxes/
simon
2020-01-15 09:38
@arkdeeplove The rates they quote are still accurate. The personal income tax rate in Bulgaria is a flat 10% (+ social security), same for corporations (+5% when paying out dividends).
arkdeeplove
2020-01-15 09:40
In the article they say that you can have a low social security of ?100, if you are the manager of the LLC.
arkdeeplove
2020-01-15 09:41
So, when you are paying out dividends, you will have to first pay 10% corporate tax). Then + 5% on dividends. Is that correct?
arkdeeplove
2020-01-15 09:48
Another question:
If I receive dividends from a Wy (US) company, do I have to pay social security and 5% tax on dividends? Or only 5% dividend taxation.
I don?t really want to setup a LLC in Bulgaria, but I?m willing to stay there 183 days and get only dividends.
arkdeeplove
2020-01-15 09:51
Thank you very much for the fast reply!
simon
2020-01-15 10:06
That?s correct, the total tax liability when paying out dividends is 15%.
There is a lower social security contribution rate available to company managers but it may result in payments higher than 100? depending on a number of factors. http://taxsummaries.pwc.com/ID/Bulgaria-Individual-Other-taxes
As for profits received from an LLC, they will be taxed at the flat 10% rate.
Ah and there?s no need to spend 183+ days in-country if you have significant ties there (local company, permanent address etc). http://taxsummaries.pwc.com/ID/Bulgaria-Individual-Residence
arkdeeplove
2020-01-15 10:32
Thank you very much. It helps a lot.
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2020-01-15 12:48
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office
2020-01-28 08:28
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office
2020-01-28 09:01
Has anyone had experience of setting up a Maltese company structure to take advantage of NHR status in Portugal to receive tax-free dividends?
If so, how is it working out?
Which company formation agents did you use for the set-up?
Are you aware of lower-cost but robust alternative jurisidictions?
office
2020-01-28 09:08
How does one demonstrate / substantiate being a perpetual traveller in the EU in this case, Simon?
In other words, if you are PT tax resident, how do you prevent your foreign EU company being considered to also have tax residency in PT, if you are performing work for it as you travel outside PT in the EU?
simon
2020-01-28 10:52
@office A company will usually be deemed a tax resident in its country of formation. You do not have to ?claim? residency there, it?s automatic.
office
2020-01-28 11:08
Thanks @simon, so the onus would be on the Portugese tax authority to show you were managing and controlling your EU company from Portugal (to claim a permanent establishment in Portugal)?
They would do this by asking you to prove you were outside of the country with board, lodging, incidental expenditure as evidence I guess?
What is the max time per year you would think suitable to spend in PT to avoid the PE trap?
elsamadrolle
2020-01-28 17:38
I read that somewhere too. However I also understand that you open yourself up to the risk that the Portuguese tax authorities will look at your effective place of management being Portugal, thus incurring Portuguese taxes. It takes quite a bit to prove that it?s not if you are actually living in Portugal (offices and directors outside Portugal etc). Not sure if Maltese structure can offer all of that - if so it might work.
seb.malek
2020-01-28 18:17
every structure in 2020 needs substance...
seb.malek
2020-01-28 18:17
so you need to find an office and hire someone in Malta for that to work
office
2020-01-28 18:52
Thanks. Yes, the law firm that provided an opinion stated it needs two local directors, local bank account, a rented office space (not just registered) and economic activity (local employee) for solid substance.
It would be an expensive set-up - especially as in principle for Malta you need both the trading company and then a holding company for the non-resident dividend tax rebate. But assuming the substance is solid; the breakeven vs. Portugese tax + social security isn't all that high (versus PT resident company + local dividend tax).
ignacio.rod.h
2020-01-29 03:00
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omocha_10
2020-02-04 15:59
Bi, if a non US citizen who signed a W8 and invest in companies that pay dividends in USA or bonds incorporate his brokerage account into a Estonian company and re invest the profits, will have or have not to pay taxes in USA? For example owning shares of Macy?s, a REIT like IYR, a Vanguard bond ETF... would the dividends be tax free?
Thanks
michal.opoka
2020-02-04 17:16
https://www.irs.gov/pub/irs-trty/estonia.pdf US-Estonia DTT might apply here
julienduteurtre
2020-02-05 05:41
*Guys I'd like to have your take on this one :*
If a Panama tax resident person manage from Panama, an Ecommerce business selling goods outside of panama through a US LLC, will the US LLC be considered permanently established in Panama and taxed in Panama as the management is done there ( see http://taxsummaries.pwc.com/ID/Panama-Corporate-Corporate-residence)
@simon If you can answer this one it would help a lot
simon
2020-02-05 05:47
@julienduteurtre Yes, in most cases if you run / manage a company from a territorial taxation country your income will be deemed local and liable to tax. A good workaround is to spend most of your time abroad, in which case you can avoid working while in Panama (and thus you have no local tax liability).
vinodgn0088
2020-02-05 11:08
@simon, Well said. However most people are not willing to accept this and just ignore it based on "we are good" answer from random accountants or lawyers :expressionless:
mikeseo
2020-02-05 12:03
but in reality is panama really going to try to enforce their taxation in that situation? For a single guy working online with a foreign company and bank, traveling part of the year? It seems only necessary if your former EU/AU/CA/etc country was hounding you for proof your paying taxes in your new country?
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2020-02-05 13:49
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albert
2020-02-05 16:55
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albert
2020-02-05 20:38
For a location independent entrepreneur (work from home - no office, no employees), which country would be best to seek tax residency if being resident of nowhere is not recommended? The business profits is received by a US LLC / UK LLP.
To seek Thai residency, you need to reside there for 183+ days. If you live there for 6.5 months to become a tax resident and you earn business profits outside of Thailand, what is the probability of the Thai tax office arguing that there is no way you were unemployed for those 6.5 months and therefore ~65% of the business profits is local sourced?
To seek HK residency, how many days do you need to reside there? Salary is taxed but dividends are not right? What are proceeds form the LLC/LLP considered? Is this where a IBC comes into place to convert the partnership income into dividends?
What are some options to be a tax resident of somewhere and pay low tax on this untaxed US/UK partnership proceeds?
openaccessconsultingl
2020-02-05 22:38
Wyoming LLC, non US resident. I want to use that company for a part of my income. If I pay out money as a salary or dividend, it is subject of taxes in my home country. Am I allowed to spend money to travel, marketing, buy new equipment etc? Is there some limit? Can I spend like 90% of LLCs money on Facebook ads? In other words, is it okay not to pay salary? Thanks upfront!
michal.opoka
2020-02-05 23:53
it depends on country where you reside, in most countries LLC is tax transparent - it means that all LLC income is your personal income no matter if you pay out or not
openaccessconsultingl
2020-02-06 00:17
It is quite hard for the government to find my LLC unless I pay salary on personal account.
openaccessconsultingl
2020-02-06 00:20
I believe Mercury nor TransferWise will notify my government that I'm the owner of LLC in US. I had to open bank account with my passport but still I can't imagine they're doing it.
michal.opoka
2020-02-06 01:19
with countries in CRS there is automatic notification, I think TransferWise is in the UK which is in CRS so it's quite likely that your government will know about it sooner or later
michal.opoka
2020-02-06 01:23
also you have to send form 5472 to IRS with info about LLC's owner and profits, and if your country ask IRS its possible they'll share that info
simon
2020-02-06 05:12
CRS does not apply to most EMI (such as TransferWise) as they are not deem to be "Depository Institutions".
simon
2020-02-06 05:17
@openaccessconsultingl There is no requirement for you to pay yourself a salary. You can use the funds to cover business expenses, including eligible travel expenses.
simon
2020-02-06 05:36
@albert Malaysia is convenient as you only need to spend 183+ days every two years (and unlike Thailand, Malaysia is a territorial taxation country). HK can be an option if you have significant local ties and ideally, a permanent HKID (as you'll then qualify under domicile rules, instead of the number of days you spend). Japan will deem you a tax resident if you maintain a place of abode there (even if only a temporary condo or similar) and is a territorial taxation country for non-permanent residents. China (mainland) will deem you a tax resident if you spend 183+ days every year but will not tax income paid by non-Chinese entities / individuals (for up to six years, provided that you are not a Chinese citizen with a mainland Hukou).
openaccessconsultingl
2020-02-06 08:06
TransferWise doesn't work as it doesn't provide debit cards for my country, most likely due to lack of CRS membership.
Payoneer doesn't work as I've heard they already gave all relevant details to the government. Otherwise they would end up like LeuPay and Skrill.
bierlingm
2020-02-06 18:22
What about Malta or Gibraltar?
julienduteurtre
2020-02-07 00:15
I'm really interested to know the answer to this one.
simon
2020-02-07 14:14
@bierlingm Malta has become less interesting with the introduction of the minimum tax. Gibraltar is interesting but only if you earn a very high income (and qualify for the Category 2 program). https://www.ey.com/Publication/vwLUAssets/ey-gibraltar-tax-facts-1-july-2019-to-30-june-2020/$FILE/ey-gibraltar-tax-facts-1-july-2019-to-30-june-2020.pdf
bierlingm
2020-02-07 16:40
Yeah ive read that Gibraltar requires a high net worth. Its one of the most appealing options to me though.
In regards to Malta, I wouldnt mind paying 15% flat tax if it would provide a lot of freedom and a steady base within the EU (EU resident here).
mikeseo
2020-02-07 23:04
Jase seems to like Andorra, ~10%
marziovit
2020-02-08 16:38
What about Portuguese NHR and Georgia? Both options could potentially be tax free.
mark1111kram
2020-02-09 15:55
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buynps.org
2020-02-10 01:43
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vinodgn0088
2020-02-10 04:28
@simon, , I have a UK LLP with myself as one partner and another UK LTD (Fully owned myself) as a second partner. All the clients/incomes are non-UK. The LLP is VAT registered to benefit from VAT reverse charge in EU (0%). I want to assign 100% profits to myself and 0% to my UK LTD. In this situation what are the tax filing obligations in UK? Do I need to send accounts to Companies Register and HMRC ? If yes, do I need to enter any income at all as all the income is coming from non-UK source?
simon
2020-02-10 04:32
@vinodgn0088 You need to file a nil partnership return with HMRC (you don?t have to report the amount of profits, just the % attributed to each partner) and dormant accounts with Companies House.
simon
2020-02-10 04:34
Make sure to mention ?HS380 - No UK income / no UK permanent establishment? in the notes page of your partnership return.
robaondrej
2020-02-11 07:12
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toby
2020-02-12 08:50
@simon and rest of the channel. With a foreign-owned US LLC, do I charge VAT to my German clients? Any idea how this works considering that they are used to receiving invoices that state the VAT % of the total invoice amount? Thanks in advance for helping to figure this out :slightly_smiling_face:
michal.opoka
2020-02-12 12:07
are you located in Germany or another EU country?
simon
2020-02-12 14:51
@toby Whether you need to charge VAT or not is not based on where the company is registered but a number of other factors. You can see my guide here for more information: https://www.freedomsurfer.com/eu-vat/
g.sfirlogea
2020-02-13 07:27
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toby
2020-02-13 12:50
Hi Mikeo! Located in which way? Right now I'm in Germany but my residency isn't here
toby
2020-02-13 13:12
Thanks Simon finally got how this works now
d.mikocionis
2020-02-13 13:29
what are eligible travel expenses? if you're a digital nomad and spend 12 months traveling?
marziovit
2020-02-13 16:28
@simon how do you actually transfer tax residency from UK to Cyprus? You can open a representative office in cyprus or a branch, those are the options. A representative office can't do commercial activities, a branch can.
michal.opoka
2020-02-13 17:05
hey, what matters is where do you manage your company from - for example I'm from Poland and if I manage LLC from Poland it means I'm doing business here so I have to register LLC branch here and apply VAT just like local company would. Germany probably has very similar laws
ricardoads7
2020-02-13 21:30
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simon
2020-02-14 05:14
You can setup a branch, wholly owned and controlled by the UK parent.
jerrycjchang
2020-02-14 15:21
If I use a Wyoming LLC to trade and invest in the US, are the returns considered US sourced income and therefore taxed? What if I paid myself a salary with such a LLC as a non US resident? Does it also become US sourced income?
simon
2020-02-14 16:00
@jerrycjchang In both cases, no US tax liability is created and no US tax has to be paid.
simon
2020-02-14 16:01
The official statement from the IRS is ?If your only U.S. business activity is trading in stocks, securities, or commodities (including hedging transactions) through a U.S. resident broker or other agent, you are NOT engaged in a trade or business in the United States.?
jerrycjchang
2020-02-14 16:07
Very interesting. Any idea if it?s in the private market such as venture capital or private equity?
alexbadaoui1
2020-02-14 17:13
would there still be foreign witholding tax on dividends / interest?
buynps.org
2020-02-14 19:49
@jerrycjchang ?invest? what means by this? Real estate rentals are taxable as FDAP
jerrycjchang
2020-02-14 19:54
Mainly private equity
jerrycjchang
2020-02-15 08:30
That would depend on your personal tax residency I believe
toby
2020-02-15 19:03
Ok, that makes sense. My business isn't managed from within the EU. So from what I understand I don't have to collect VAT. Instead, I'll have to mention the client's VAT number on the invoice and they'll account for the tax through the reverse-charge-mechanism. Do you know if I understood that correctly?
michal.opoka
2020-02-16 12:40
if you only do b2b then I think it's entirely your client's job to handle vat, you can mention their vat number if it would make it easier for them
openaccessconsultingl
2020-02-16 17:23
About FATCA: is it only reporting to US about US citizens and residents, or it is vice versa? In other words, how likely is that US report to other country about WY LLC and eventually about my personal account in the states?
michal.opoka
2020-02-16 19:11
FATCA is about financial institutions and it can be vice versa, depends on country
simon
2020-02-17 06:37
Gains from the sale of private shares are exempt but do note that dividends received from resident companies are liable to tax.
simon
2020-02-17 06:39
@openaccessconsultingl There is no reporting for transactions inside US entities but transactions in / out are reported (via form 5472). There is reporting for personal bank accounts but as with CRS, that is usually limited to the account balance.
bountybairn
2020-02-17 09:22
Can anyone recommend acceptance agents based in the UK for ITIN registration with Wyoming LLC? Theres a fair list on the IRS site so wondering if anyone has any experience with these
jase
2020-02-19 07:00
How did you get on with this Paul?
toby
2020-02-19 12:45
Yeah it's b2b only. Thanks for the insight, happy to see I'm on the right track
alex720
2020-02-19 14:06
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alex720
2020-02-19 14:25
What company type/country would you guys recommend for Panama resident? I will be living in Panama 10 months per year and will need to run my business from Panama
alex720
2020-02-19 14:26
Thinking HK company but don't want Panama to tax it
marziovit
2020-02-19 14:27
UK LLP
alexbadaoui1
2020-02-20 00:51
does anyone have a UK accountant to set up UK LLP's for them? and handle accounting returns etc?
marziovit
2020-02-20 07:27
@simon could do that for you
simon
2020-02-20 07:28
Thanks @marziovit! @alexbadaoui1 I can indeed register an LLP for you. You can have a look here for more details: https://www.freedomsurfer.com/register/
vartman
2020-02-20 09:35
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buynps.org
2020-02-20 15:37
@alexbadaoui1 +1 to @simon! very knowledgeable and an expert in this field
lopez.shereen
2020-02-22 13:51
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buynps.org
2020-02-23 03:55
@julienduteurtre @simon I spoke to a tax attorney in Panama, from what I understand, there is a statue in the tax code that excepts management of foreign companies as a local Panama company
gbroome
2020-02-23 08:26
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elsamadrolle
2020-02-23 09:21
Hi all.. I was planning on leaving the U.K. but for various reasons now have to stay a while longer. If I am a U.K. resident what would be the best corporate structure from a tax perspective? Obviously I will get taxed any dividends brought back into the U.K. but right now I have a Ltd company and I?m getting pounded by the cumulation of taxes (UK corporate and UK income/dividend tax).. can I do better than 19% corporate or is hassle/fees to set up elsewhere not worth it? Clients not in the U.K. nor EU.
simon
2020-02-23 13:58
Hi @elsamadrolle, if you live and work in the UK you'll be better off continuing with your Limited company. You could register a company abroad but that won't help as it will be taxed in the UK as a Limited company anyway.
elsamadrolle
2020-02-23 14:00
Got it. Thank you! If I manage to leave the U.K. I?d go with an LLP which I understand has to be a whole new structure - does that require one or two partners?
simon
2020-02-23 14:07
It requires two partners but there is no need for both to be natural persons. You could use your Limited company as the second partner for example.
elsamadrolle
2020-02-23 15:20
Ok thanks. That makes it interesting - I was struggling with the second partner.. so upon leaving I could make my Ltd company the second partner. I will then be a non-UK resident therefore not liable to U.K. tax but what about the Ltd company - if it owns 50% shares in the LLP does it get taxed? Or can I choose to not distribute profits to it?
simon
2020-02-23 15:28
Correct, you can attribute 100% of the profits to yourself.
gbroome
2020-02-24 11:15
Hi All, is it possible to operate a foreign company under the Malaysia MM2H whilst being in Malaysia long enough to satisfy the tax resident requirements? Or perhaps even getting away with obtaining a tax certificate first and then staying within the 60 day rule? Would the foreign company need to be structured in a way to be managed only in the time outside of Malaysia? Is it possible to use a UK LLP or Wyoming LLC? Or something better....maybe an Estonian OU and only paying a salary when not in Malaysia?
Thanks
vinodgn0088
2020-02-25 02:11
@gbroome, Malaysia do have "place of effective management rules". You can either choose to stay low without thinking about legality of setup or plan for something legal. So, if you want to operate a foreign corp try to do following as bare minimum if you want to stay legal.
1) Make sure to setup somewhere you can get a tax residency certificate for your company but tax is low.
2) Have someone in Payroll who works outside from Malaysia. Preferable if he/she is resident in the country of your company
3) Take out dividends and director fees instead of monthly salary. Do check the taxes before choosing one.
4) Try to have a co-working slot (country of Incorporation) on a long term lease and visit the country of Incorporation couple of times a year.
vinodgn0088
2020-02-25 02:11
Also, my suggestion is to avoid Estonian OU.
simon
2020-02-25 06:22
@gbroome As far as I know, it's possible for MM2H participants over 50 years old to have a part-time job (subject to approval from the government). I imagine that it would be possible to register a permanent establishment of an overseas company and work part-time for it. For participants under 50 year old, no work is allowed (although as @vinodgn0088 explained, it is possible to work under the radar for a foreign company and pay yourself when abroad, to an account located outside Malaysia).
gbroome
2020-02-25 21:25
Thanks @vinodgn0088 and @simon Yeah under 50 so couldn't worth there. I think Malaysia seems like it could work to fly under the radar. Is the 60 day rule a feasible option too in Malaysia under this scheme so that at least I have the tax residency certificate for other countries of asked but at the same time nothing is taxable in Malaysia, it seems this route is a bit pointless as then I'm not really tax resident there.
If I did go this route I assume a LLP US LLC option is not really feasible as I'd need a holding company and this holding company will tax me on the permanent establishment.
I'm running an Amazon FBA business and one of the considerations is to make the compliance as easy as possible so I like the sound of a UK LLP, US LLC or Canadian LP (although maybe not the lack of limited liability for Canada) What would you suggest as a structure. I've looked at Georgia, Estonia, Cyprus, Malta. We have family in Czech Republic and New Zealand so can live anywhere and can move around a bit so Europe maybe a good option to cross borders easily. Or Malaysia works too being between NZ and Europe and low tax but maybe its an unnecessary step. Need to plant that residence flag and business flag. Happy to pay some tax, just want to make it easier really as my current setup is not great effectively having to comply in the UK with a LTD and in NZ being based here now. Also profit is low anyway but planning for the future, I have spent a lot of time researching, I should probably be working on the profit instead of the tax lol!
simon
2020-02-26 04:18
@gbroome For a tax certificate, you'll have to stay at least 183+ days every two years in Malaysia (so the 60 day rule will only be usable every second year). If you don't mind paying some tax and have an EU passport, you could move to Cyprus. You only need to spend 60+ days every year to qualify as a tax resident and you can keep using your UK company (you'll have to register it with the Cyprus tax authorities and inform HMRC of the move. It'll be exempt from UK taxation and will instead be liable for taxation in Cyprus at the flat 12.5% rate. Dividends received by you from the UK company will be exempt so no personal taxation if you only pay yourself via dividends).
marziovit
2020-02-26 07:20
@simon i asked this very same question to a law firm in Cyprus and this is the answer they gave me: ""You can relocate your UK company, the process is complicated and will take months in order to be completed. You will need to officially translate all corporate documents to Greek and have them apostilled. The cost for the relocation is 3,250Euro plus 19% VAT whereas a new company formation takes approximately 18 days and the cost is 2,650 Euro plus VAT."
nemanja.mirkovicru87
2020-02-26 09:52
@simon and others, would you mind punching holes in this setup, I spoke to several tax advisors and they all said it's perfectly doable so just wanted to hear your thoughts:
Malta company owned by a parent Singapore company
All trading would be done through Malta > Pay tax in Malta > Send dividends to Singapore company (0% tax because Malta headline tax is 35%) - so essentially it ends up being 5-ish % that you pay in Malta
Note: Personal residency will be in Malta
Thanks!
marziovit
2020-02-26 10:26
It could work but you have to add 5000? to 5% for the non-dom minimum amount of taxes that you have to pay https://www.freedomsurfer.com/malta/
marziovit
2020-02-26 10:31
Plus all the managing costs for the maltese company which i heard from a friend that owns a maltese LTD it's in the 10.000? range per year. Also, it is true that you end up paying 5% taxes but the truth is that you pay 35% now and the you'll be reimbursed and this could take weeks. So if your business needs immediate cashflow to be run, you need to be aware of this delay.
nemanja.mirkovicru87
2020-02-26 10:39
15k if you are not EU Nationale :smile:
nemanja.mirkovicru87
2020-02-26 10:40
If you sign up with a big law firm to do your nominee director it's expensive for sure. I'm with one of them and it's about 6k not 10k. A friend of mine pays around 2k total but he is the director and has a physical office etc.
marziovit
2020-02-26 11:36
Really? I didn't know that
nemanja.mirkovicru87
2020-02-26 11:38
Yeah it's called Global Residency Program
simon
2020-02-26 12:51
Might be worth getting a quote from another firm. This one, for example, seems experienced with such issues: https://savvacyprus.com/our-services/taxation-services/corporateresidencyincyprus
candelamont
2020-02-26 19:15
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marziovit
2020-02-28 21:53
I sent an email to those guys asking the same question and here's the reply "Kindly note that based on UK?s legislation a UK company is not permitted to change its domiciliation from UK to Cyprus. Therefore we would suggest to incorporate a new Cyprus company, transfer its activities to the new Cyprus Company and thereafter, you may close the UK Company."
simon
2020-02-29 00:50
marziovit
2020-02-29 07:43
Yes, i know. I sent them that link straight away but they were more interested in selling me a Cyprus LTD instead of relocating UK LTD. Looks like all those company firms are a bunch of incompetent asses.
brendan
2020-03-01 01:18
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michal.opoka
2020-03-01 15:51
@nemanja.mirkovicru87 I'm not a specialist on Malta but some things you should check: 1) Singapore company tax residency/permanent establishment - place of effective management is what would most likely matter here 2) Any CFC or general anti-abuse rules in Malta - it might have changed recently due to EU's ATAD directive 3) If you are relying on Malta-Singapore Double Taxation Treaty check if MLI convention doesn't apply to it 4) How do you want to pay money out of Singapore company?
nemanja.mirkovicru87
2020-03-01 15:59
Hey @michal.opoka appreciate your thoughts!
1. Board meetings will be held in Singapore and my personal residency would be in Malta.
2. I will double check with the accountant in Malta
3. It's not double taxation treaty but Singapore's law that dividends are not taxed further in SG if the headline tax in subsidiary jurisdiction is 15+%
4. Probably dividends and would not remit to Malta
Does it make sense?
michal.opoka
2020-03-01 16:09
1. You would be flying to Singapore or company would have resident nominee director? You should check what's the practice in Malta on that, for example in Poland it's enough that Polish resident is the director of foreign company for tax authority to claim that company is tax resident in Poland, but it really depends on country.
3. Make sure it's still headline tax, not tax actually payed. It's something that can change
4. Make sure you check exactly what they consider remitting and what they don't, it can be tricky
michal.opoka
2020-03-01 16:09
Also check if Singapore doesn't have withholding tax on dividends
nemanja.mirkovicru87
2020-03-01 16:21
@michal.opoka Thanks! Yea, I'll definitely double check that.
lu.taglialatela
2020-03-02 03:07
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mt
2020-03-04 10:25
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gbroome
2020-03-05 03:09
Thanks @simon something like Cyprus or Andorra seems like a good option. One of the main advantages though of the LLP or US LLC is the minimal reporting. If I went down that LLP/US LLC route and tried staying under the radar paying myself when abroad to an outside Malaysia account, spending a lot of time outside Malaysia especially once qualified for only 90days there each year, would that pass through structure be enough or would it be worse than a company with PE abroad. It seems thats what a lot do in Panama? If not I can't see much use of the pass through structure for any tax reasons and if I was paying corporation tax somewhere anyway I may as well just move to Cyprus or Andorra. I suppose a holding company like Estonia as the LLC/LLP member is another option too if the LLC/LLP direct is a no go and paying a salary from that while abroad.
simon
2020-03-05 14:31
You'll be fine with a pass through structure if you only work when outside of Malaysia (or at least, appear to on paper). Your passport stamps will be sufficient if ever challenged by the Malaysian tax authorities.
dsf0010
2020-03-06 08:52
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endless.skai
2020-03-06 09:51
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gbroome
2020-03-07 02:01
Thanks
tkrunning
2020-03-08 00:13
Tax time in the US now and it's the first year I'm filing form 5472 and 1120 for my US LLC... It seems pretty straight forward, and I'm pretty sure I've completed it 95+% accurately. Is there any point in paying someone $500 for completing two simple 5472s?
The only things I'm slightly uncertain about are:
a) Can you skip field *1c (Business Activity)* for *Part 2* and *3* when it's a natural person?
b) For *Part 5*, is there any specific format for the attachment, or is it just list of reportable transactions during the year? And should you list specific transactions or just the totals for each category?
c) For field *1l (Part 1)* do you have to write anything when it's a disregarded entity?
d) I assume I should check off both box *2* and *3* in *Part 1*?
If anyone are able to share their experience completing the 5472 that would be fantastic! (E.g. @otkeedca or anyone else) Thanks!
kalin.stoyanov
2020-03-08 19:22
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hennadii
2020-03-10 12:28
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mescos
2020-03-11 01:32
Interested in this as well!
icefreebiz
2020-03-11 12:30
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simon
2020-03-11 14:12
@tkrunning @mescos a) you have fill all the boxes in PART II (1b(1) and 1b(3) are optional), same for PART III
b) there?s no specific format and you should only list the transactions associated with the company formation and maintenance (state fees, for example)
c) yes, you have to enter the country where you file your personal tax return (I am assuming you are the member)
d) only 3
tkrunning
2020-03-11 15:05
Thanks @simon?although I'm not sure what I'd put for the "Principal business activity" and "Principal business activity code" for me as an individual (Part III?Related party)...
Also regarding b) I assume you should also put capital contributions and profit distributions as well? Or is that only done in connection with the formation, sale, or dissolution, not if it's just regular owner's draw for example?
simon
2020-03-11 15:25
Regular transactions (such as profit distributions) are reported in PART IV, not PART V. As for the business activity code, that is for your LLC (confusing, I know, they really should have built a new form for DEs instead of using the same form as for foreign shareholders of US corps).
mykolas.ramanauskas
2020-03-11 22:49
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sterk
2020-03-13 13:53
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matthias.wernig
2020-03-17 21:12
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brendan
2020-03-18 11:54
Hi guys. Anyone here living and paying tax in Thailand? I live here on an Elite visa and my intention is to pay tax here rather than my home country. Is anyone here in a similar situation and paying tax in Thailand? Can you recommend a local accountant/tax lawyer who can assist me? My big concern is that I want to declare to Thailand my worldwide income (and have this officially noted) but only pay tax on the money I have remitted into Thailand over the past 12 months - as per Thai tax rules. I fear that Thailand may tax my remitted income but ignore acknowledging the rest of my worldwide income, therefore a large part of my income won't have been declared to any tax authority.
benjamin
2020-03-18 12:57
Are you running a business while based in Thailand? Because if you are, it will be deemed local source income and all will be taxable regardless of if it's remitted.
Unless you're periodically leaving Thailand to work as an employee or as a business owner it would still be local source income.
alex720
2020-03-18 23:24
@brendan check out http://flagtheory.com and schedule a call, they can probably help you. I read their articles about Thailand
brendan
2020-03-18 23:51
I'm aware the Elite visa isn't a work visa. I have a few different sources of income, but one of them is from an offshore business I own but don't actively run from Thailand. The other sources are also passive. I'm hoping the global sources of my income won't be challenged and from what I have read this shouldn't be an issue.
brendan
2020-03-18 23:51
Thanks Alex. Will do.
benjamin
2020-03-19 02:27
Ah nice, I think you will find it difficult to declare that income. It's actually quite difficult to pay tax in Thailand, especially as someone who isn't working.
Most accountants I've spoken to just tell me I don't need to do a tax return, they don't seem to understand that it's needed to keep your home country from having a claim one day.
The income is tax exempt so it doesn't really need to be noted anyway.
If your home country challenges you in the future it will be quite easy to prove that you were a tax resident of Thailand at the time that income was earnt anyway.
Just make sure you can clearly prove your earnings and tax residency from each year and it shouldn't be a problem in my opinion.
If you do find an accountant who knows what they're doing in this situation let me know as well, I've been unsuccessful in my searches.
brendan
2020-03-19 23:31
Thanks for the advice. Yeah I've been searching for a while and most seem unable/unwilling to help. I'll let you know if I come across someone who can.
himself
2020-03-20 21:35
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2020-03-22 03:16
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2020-03-26 13:05
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2020-03-28 08:28
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2020-04-01 02:00
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2020-04-01 14:36
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2020-04-02 22:08
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2020-04-03 13:03
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2020-04-04 11:54
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jase
2020-04-04 14:35
@simon in your NZ guide you say that "dividends are exempt" from personal tax. I was under the impression that is only imputed dividends.
jase
2020-04-04 14:35
From KPMG: "Dividends paid by an overseas company will be taxable in New Zealand, unless the shares are subject to the Foreign Investment Fund (FIF) regime. Shares in non-New Zealand companies are generally subject to the FIF regime"
simon
2020-04-04 14:51
@jase the exemption is only available for the first four years of residency. https://www.ird.govt.nz/topics/tax-residency/temporary-tax-exemption
marcdomancie
2020-04-04 20:43
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jase
2020-04-05 08:38
Ahh, I understand @simon - I guess the article is written for someone considering living there for 4 years. Seems like a lot of effort for a short term play but can be strategic of course.
just4cassie
2020-04-05 16:55
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lucaboero25
2020-04-05 17:22
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mescos
2020-04-05 19:17
@simon - why do you say that only the transactions associated with the company formation and maintenance (state fees, for example) should be listed?
Also, what if the member deposited money in the LLC?s bank account, would this need to be reported as well?
simon
2020-04-05 19:19
Only the transactions associated with the company formation / maintenance must be listed on PART V. The other transactions between the LLC and the member are reported on the main 5472 form.
mgonlinephone
2020-04-06 18:10
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2020-04-06 18:11
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2020-04-06 19:53
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2020-04-06 20:29
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2020-04-07 02:37
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paul_inkpen
2020-04-07 18:40
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me1892
2020-04-08 09:34
@simon there?s no way for NZers to impute or get a credit on foreign dividends is there? (outside of the temporary exemption)
paul_inkpen
2020-04-08 16:14
I think I am screwed basically :joy::man-facepalming: as I moved to Spain 7 years ago, now have kids, wife etc and can?t really travel more than 1/2 weeks a month to help my taxation situation.
simon
2020-04-08 18:32
@me1892 You may be able to claim a credit for foreign tax paid. The IRD has a worksheet that details how this work and what is / is not eligible. https://www.classic.ird.govt.nz/resources/f/0/f0463bee-e81d-4023-aa80-11b87a238e06/IS+1605.pdf
simon
2020-04-08 18:33
Obviously, this isn't as useful as an exemption on foreign sourced income.
simon
2020-04-08 18:34
@paul_inkpen Depending on your work situation, you may still have options (especially if you have business partners / physical operations located in lower tax countries).
me1892
2020-04-08 18:42
@simon thanks - I?ll have a read. Sidenote: have you looked at LTC companies in NZ before? Would you say they generally have the same pros and cons of UK LLPs and US LLCs in a pass-through treatment? Anything to look out for?
paul_inkpen
2020-04-08 19:12
@simon thanks Simon. That is where I am
At right now. That?s what I have been using this ?home lockdown phase? for - to think about the future and structure myself in the most efficient way possible moving forward. There is a UK LTD that I am involved in but nothing in any other jurisdictions so far.
simon
2020-04-08 19:22
@me1892 They are similar to disregarded US LLCs but with a number of additional restrictions (residency requirement, only natural persons can own shares, max 5 owners etc).
paul_inkpen
2020-04-08 19:31
I think I would be very interested in a UK LLP...
simon
2020-04-09 03:25
@paul_inkpen With an LLP, you'll get the benefits that come with a UK company but tax-wise, you'll still be taxed in Spain on your share of the profits.
paul_inkpen
2020-04-09 07:01
So I guess I should consider a ?holding friendly? jurisdiction that only taxes distributed profits.. Estonia is one such nation right? More homework is needed on the subject. :+1: Although banking is slowly becoming an issue for non resident companies there no?
terraformingmedia
2020-04-09 08:54
Hi, how about the tax return in HK. I have a LLC in WY. I applied in the etax website but it?s not clear to when is the time. Thanks
simon
2020-04-09 10:56
@paul_inkpen Estonia, Latvia and Georgia only tax distributed profits. Of the three, Estonia is my favourite (it?s easier to handle compliance and it?s usually possible to avoid triggering CFC taxation, although this often requires a bit of work).
Opening a bank account in Estonia is certainly difficult, fortunately there are easier options such as Revolut and TransferWise (it?s also possible to open an account elsewhere in the EU).
paul_inkpen
2020-04-09 11:00
@simon awesome thanks. Georgia and Estonia have certainly been on my radar in recent weeks. I need to look into the e-Residency options now. Any thoughts on XOLO?
simon
2020-04-09 11:00
@terraformingmedia Usually it?s in May but I?m not sure if it will be different this year due to the virus situation.
simon
2020-04-09 11:03
@paul_inkpen I?ve worked with them in the past and while they are helpful, the range of business activities they support is very narrow.
If your Estonian company is only used as a holding company, you can handle compliance on your own (there?s only a short annual return to file and that can be done via a guided form online).
paul_inkpen
2020-04-09 11:15
Could a US LLC also benefit me in the same way an Estonian Company can ie: un distributed profits? Having access to the US Banking system and having a US holding company that owns/part owns a US LLC serving clients might also work for me.
sterk
2020-04-09 12:17
I could be wrong... But wouldn´t you still need to pay personal taxes on your profits/income from the Estonian company in Spain?
sterk
2020-04-09 12:17
Would it then not be better to open a US LLC and use the LLC for as many expenses as possible to lower your personal income in Spain?
sterk
2020-04-09 12:18
I know that for an Estonian company it is harder to justify expenses but because a LLC does not have strict accountancy rules you could expense a lot more via the US LLC and therefore reduce your income and taxes in Spain.
sterk
2020-04-09 12:18
Again.. Could be wrong
paul_inkpen
2020-04-09 12:24
@sterk thanks for your input. I am taking guidance on how an WY LLC can act as an International Holding Company for my business structure. Basically clients are UK and Germany based and hopefully soon with a separate LLC in NY for clients we have a green light to work with there too.
sterk
2020-04-09 12:25
Sorry, seems my input was not very relevant here haha.
sterk
2020-04-09 12:26
Looked at it from my personal point of view. Based in Spain as well and trying to find the best setup to run my affiliate marketing business and paying as little taxes as possible in Spain.
paul_inkpen
2020-04-09 12:35
No on the contrary I see it making sense. NY LLC will be totally separate and owner partly by a UK LLP and the WY LLC would manage/ co own the companies dealing only with German and UK clients.. Fulfilling the role as an international holding company. Just the NY LLC would be totally separate keeping the WY LLC status as a non US tax paying entity.
terraformingmedia
2020-04-09 15:26
Thanks @simon
simon
2020-04-10 03:28
@paul_inkpen You can setup a US LLC and have it owned by an Estonian company if you want the best of both worlds (US banking + no taxation on undistributed profits). Regarding US taxation, you won't pay any if no work takes place in the US (you can have US clients but cannot physically perform work there).
coapsi.george
2020-04-10 07:41
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coapsi.george
2020-04-10 07:52
Hi guys! I have just opened an US LLC and want to ask you how is it possible to avoid taxation when I want to spend my money? I am located in Romania.
paul_inkpen
2020-04-10 09:45
Thanks @simon, for an Estonian Company should one definitely get the e-residency in your opinion? I value privacy - of course with total legal compliance - and I see that Estonian Businesses have a full and open public Owners/ Beneficial Owners register... Are there possibly any other jurisdictions to consider based on your model of US LLC owned by an international Holding Company?
tiagomdreganha
2020-04-10 10:42
@paul_inkpen if you're the only business owner, you live in Spain and have no offices/directos in any other country, how will you justify having an Estonian and US LLC to the Spanish tax man, so that they don't deem both companies as tax resident in Spain?
paul_inkpen
2020-04-10 11:18
@tiagomdreganha I didn?t say I was the only person involved. I would be one of a group of co owners based in different countries but my role is largely that of strategy rather than operational...
All of my person income from said company profits would be taxed in Spain without doubt.
tiagomdreganha
2020-04-10 11:19
That's much more workable then (as long as the other co owners are not tax resident in Spain too).
paul_inkpen
2020-04-10 11:23
Yep. No, Germany and the UK.
mikeseo
2020-04-10 14:23
are there guys who live in dubai etc who specialize in being partners for this type of thing? they own the majority of a company and open bank accounts and than somehow guarantee they'll keep the profits in the company until you're ready to leave spain? there must be some demand for that...
simon
2020-04-10 20:11
@paul_inkpen For Estonia, e-Residency is a must. Without it, you?ll have to hire an Estonian notary to handle the company registration and then a representative to handle compliance and all dealings with the government.
Estonia, Latvia and Georgia (the countries with no corporation tax for undistributed profits) unfortunately all have public registries.
simon
2020-04-10 20:17
@mikeseo I?m sure there are people offering such services but due to the risk involved it?s probably going to be very pricey (not to mention the risk you take by giving a third party control over your company).
A safer approach would be to appoint someone you already know and trust, that live in a country with a lower tax rate (plenty of countries with rates between 10-20%). Appointing multiple family members / friends who are unemployed can also work but you?ll have to be careful about profits ?sprinkling? rules.
bigworld
2020-04-10 22:57
Fairly easy. According to the DTA treaty among Spain and the United States, any company registered in the US is deemed to be tax resident in the US.
tiagomdreganha
2020-04-10 23:46
Nothing is fairly easy nor that simple in taxation world.
Own and be the sole director of a foreign company while residing in an high tax country - and see what happens when an inspection arises.
For such setup to happen you need strong substance in the incorporation country.
A transparent US LLC, where you're claiming no US sourced income (aka, no substance in the USA), is the exact opposite of that.
paul_inkpen
2020-04-11 08:49
I suppose that a single owner owned ?and managed? ( that is the biggest thing surely) US LLC may have issues. However if satisfying US compliance rules and all yearly profits were actually paid out to said owner/owners and income tax was/is paid and income fully declared where is the problem?
eronorbi
2020-04-11 15:46
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noahlibbyhaines
2020-04-12 01:15
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nitindania11
2020-04-12 16:37
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brent
2020-04-12 22:07
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francoiskocik
2020-04-13 02:05
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antonio.fonduca
2020-04-13 09:14
@paul_inkpen regarding Xolo: their services could potentially make sense depending on your situation. If you already are an Estonian E-resident, with a company (OÜ) setup and with a legal address/contact person in place, along with a bank account, their additional value offer is limited to VAT filing and taxes, some accounting/annual report preparation, and assisting in adding the share capital. Most of these things you can DIY however. I considered using them for the latter since I found out that it might be tedious having to translate the digital bank stamp into Estonian and then having it notarized depending on the bank you would transfer it from. I also needed to switch banks from N26 to Revolut. Apparently they used to be called LeapIn earlier and have added/upgraded some of their services since then. I see them more as a potential ?one stop shop" for someone who is completely new to Estonian E-residency and wants help with the whole package from start.
paul_inkpen
2020-04-13 09:17
@antonio.fonduca thanks very much for the info! :grinning::+1:
saba.bosuener
2020-04-13 15:40
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ivo
2020-04-13 20:02
@mikeseo We can provide such services in Georgia.
b.maite
2020-04-14 16:44
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eddieringleb
2020-04-15 06:18
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bartek
2020-04-15 20:20
I have one question regarding article about Czech Republic :slightly_smiling_face: In the article there is stated:
`The Czech Republic can be, in some circumstances, a low tax country. For example, an EU citizen staying in the country for less than two years. In such a case, the EU citizen could apply to be exempted from paying Czech social security and would thus only need to pay the 15% Czech income tax (social security would still have to be paid but in the originating state).`
Question is - how is that working, that for first two years I could be exempted from paying social security? I couldn't find any information about this anywhere.
Maybe it's worth to mention, I'm from EU country, so unfortunately I'm obligatory to pay social security in country, where I'm spending more than 183 days per year, unless I don't know something.
simon
2020-04-15 20:44
@bartek When you move to another EU country, you can elect to continue paying social security in your previous country of residency for up to two years. This can work to your advantage if you move from a country like Bulgaria where there is a low cap on social security payments (as you'd then pay 15% income tax in the Czech Republic + around max 200 EUR monthly for BG social security).
bartek
2020-04-15 21:07
Thanks @simon! So if I understand correctly, in above case, I'd have to firstly - move to Bulgaria, get an insurance for myself, then move to Czech Republic and get an exemption there somehow?
bartek
2020-04-15 21:08
I'm analyzing my options because I plan to move to another EU country as a freelancer, where I can enjoy a low tax burden and relatively low live costs (perpetual travelling is not an option for me. I tried, but in the long-term it becomes an unpleasant experience). The Czech Republic looked the best so far, as even paying income tax + social contributions, it will be something between 13-14% in total, without any additional hassle.
simon
2020-04-15 21:17
Yes, to take advantage of the two years exemption you?d have to first qualify as a tax resident in BG (or another low tax EU country) and register for social security there, then move to the Czech Republic.
Depending on your income, it may or may not be worth it.
gbroome
2020-04-16 02:08
I've also been looking at Czech Republic as a place to become tax resident and comparing to Cyprus. (just learnt about the additional 2.65% on dividends in Cyprus too which makes it less attractive) Czech Republic has a trade license for the self employed where an automatic deduction of 60% is allowed on profits up to about 70,000 euros. This effectively makes the tax rate 6% plus social security. If I'm running a US LLC from Czech Republic and registered as self employed there by invoicing my own LLC for consulting and management etc it seems like I could make use of that deduction in Czech. The US LLC would not make a profit as it would be invoiced out to me in the Czech. I guess this carries some risks but as its a pass through entity I don't think it could get caught by permanent establishment rules, it wouldn't be making a profit in the US and I would be paying tax on it in Czech Republic. The costs taken out of it in the US would be actual direct costs like cost of goods sold and fees etc but not salary or consulting. Then the only profits that flow to me in Czech would be actual consulting charges. The 60% deduction available in Czech would relate to running the business from Czech. This setup wouldn't work for a products based business done purely in Czech without the LLC as the turnover would be too high. It seems like there must be some flaws in this plan but it also seems like it could work...Longer term if more profits are made I'm also thinking about a Hong Kong Company as I was looking at the double tax agreement with Czech and it seems to leave out place of management under permanent establishment so I'm sure there is a way to structure that as a holding company for the US LLC too. If this is not going to work, any other ideas on paying low tax in Czech Republic with a products based business or will Cyprus work out better if looking to be in Europe for a while.
bartek
2020-04-16 07:17
1. As you mentioned, US LLC is tax transparent, so if you are planning to be a Czech tax resident, you will have to pay 15% income tax in Czech on US LCC profits + everything else as a self employed in CZ.
2. I wouldn't be so sure about permanent establishment rules. Read more about it on https://taxsummaries.pwc.com/czech-republic/corporate/corporate-residence DTT between these teo countries could be crucial, but I didn't read it.
3. If 2kk CZK yearly is not enough for you and you are planning to do business in Europe, maybe you should consider Romania LLC and their micro-company regimen, which will ends up in something like 8% in taxes?
I would actually go with Romania already in any other situation than mine, but Czech is far more closer culturally and linguistically for me.
gbroome
2020-04-16 08:22
Thanks for your reply @bartek I'm also trying to make Czech work for me for the moment as my partners family are there. I've looked at Romania but the tax is based on turnover not profit. This wouldn't work for a low margin products based business.
In regards to Czech:
1. The US LLC would make not profits to distribute after invoicing for salary/consulting from the Czech business. So it would just be 15% of the self employment income after the 60% deduction so effectively 6% plus social security.
2. As its transparent permanent establishment shouldn't apply. If for some reason it did apply (and besides the place of management part, that would be difficult to argue) The DTT does actually specify that the furnishing of services/consulting is ok for 9 out of 12 months which may help in this setup if keeping it to 9 months. The usual clause seems to be 6 months.
If none of that is correct what would any US LLC distributed profits be classified as on a Czech tax return? It seems like self employment income at 15% The question is probably whether the 60% deduction for registered self employment is appropriate. If its not then I guess it just means beefing up the costs in the US LLC to reduce the tax base but some of those costs will be self employment costs from work done from Czech Republic...
tiagomdreganha
2020-04-16 08:59
I have a similar situation, around 200-300k turnover and 40-60k in profits, but the goal is to scale. I have a house in my high tax EU country but can "rent it out", no other ties. Wouldn't mind renting a cheap apartment on a low tax EU country if I could run a US LLC without any issues, but CFC rules are becoming stricter across the EU.
Just the US credit card points alone would save me 5k+ / year in flights.
tiagomdreganha
2020-04-16 10:15
It seems that Cyprus is a good option as they went ahead following EU orders but applied CFC only at corporate level. So a resident managing an US LLC shouldn't be targeted.
Idk about other countries in Europe but non-EU with favorable CFC that allow to manage a US LLC, maybe Georgia?
What's your take on this @simon?
bartek
2020-04-16 10:18
@gbroome
yes, in Romania total turnover is calculated, but in Czech Republic, is you choose flat 60% expenses, then you can't really deduct much more, so with low margin business, maybe flat rate of 60% expenses wouldn't be optimal either.
I'm not sure if I catch up the US LLC part, but the net profit that US LCC would make, will be taxed to you at personal level, basing on your tax residency (which would be in Czech I assume).
So if you will earn let's say 100.000EUR by US LLC, but 40.000EUR will be expenses (you will invoice it by your Czech self-employment), then you will have to pay 15% from 60.000EUR at personal level AND 40.000EUR will be a base for Czech self-employed.
In terms of PE you are absolutely right: https://www.irs.gov/pub/irs-trty/czech.pdf
It is very generous that it is 9 months, not standard 6, but still - tax from net profit US LLC have to be payed at personal level. Is that not right?
@tiagomdreganha
CFC in Czech shouldn't be a problem. First thing is - CFC is not triggered is you are making 'active income'. Second thing is, Czech implemented only CFC at corporate level, similar to Cyprus. Bigger problem can be a 'permanent establishment' of the company, but it all depends on type of your business and lifestyle really.
https://taxsummaries.pwc.com/czech-republic/corporate/group-taxation
bartek
2020-04-16 10:19
With that kind of setups (US LLC, somewhere in Europe for example) I have always one big problem - you have to pay tax somewhere, otherwise, your 'home' country can always go for you and if you don't have good proof, you can be doomed (it is the thing with my original country at least)
gbroome
2020-04-16 10:53
@bartek Yes net profit has to be paid in Czech at the personal level if this is my tax residency. But because of the 60% deduction allowable in Czech for self employed the tax base can be lowered by taking more as invoiced amounts than net profit.
Changing your example slightly, how about this - 100k by US LLC - 70k my expenses invoiced by Czech self employment leaving 30k net profit. So in Czech 30k net profit is taxed at 15% and 70k taxed at 15% after 60% deduction (so 15% of 28k) Total tax on 100k is 8.7k 8.7% plus social security though. Any thing much higher than that could then be fed into a holding company.
Also bear in mind I'm also saying the starting 100k from the US LLC has already been reduced by actual costs of the US LLC like stock/freight/fees and other legitimate costs. So it just seems like a way to use the Czech self employment scheme advantages with a higher turnover, low margin business.
Ultimate plan is to get tax residency somewhere like Malaysia or Panama but for a while I want to make the EU work. Currently I'm having to file returns in NZ and UK so just working out new plans to avoid that going forward. At least though in NZ personal tax rates are low for low income which works ok for now with the US LLC.
Cyprus seems like a lot of effort and added cost for only a slight reduction in tax. The 60 day rule is good though.
vinodgn0088
2020-04-16 11:39
@gbroome, If you are a one man army, just forget running a US LLC from CZ. It will be deemed as operating from CZ and taxation type will be determined based on the local laws. If CZ laws consider a US LLC as a corporate entity then you will suffer taxes just like a normal company in CZ. All you need to worry about is Place of management/Place of effective management rules.
gbroome
2020-04-16 12:26
@vinodgn0088 I don't think CZ treat them as corporations (Do you know of many that do? I hadn't realised this would be a big thing to worry about when going for this solution) Operating in CZ and being taxed based on local laws is exactly what I am trying to figure out. I'm hoping someone has any insights on Czech specifically and whether what I'm proposing makes sense. So far I haven't seen anything that suggests this wouldn't work or isn't legal. If its not the right way to report it, I guess we are talking about the difference between tax at 15% and a portion of it at a reduced rate due to Czech self employed allowances. Social Security adds quite a bit more though.
tiagomdreganha
2020-04-16 12:41
@vinodgn0088 yep that's my issue. Is there any EU or non "blacklisted tax haven" country where having residency while using a US LLC as a one man operation wouldn't be an issue?
Ecommerce is my case, no employees or PEs.
vinodgn0088
2020-04-16 12:47
@gbroome,
First of all US is not even part of EU. There was a case in Germany where the authorities treated a UK Ltd as a unlimted liability company and the court ruled that
Germany must recognise a UK Ltd as a company with limited liabity as UK is part of EU.
Why CZ need to recognise a US LLC as tax transparent when it is being operated from CZ soil?
Why every countries are now implemnting new laws and making it mandatory to have substance in their territory?
For taxation of various company types in CZ, please have a look at https://accace.com/tax-guideline-for-the-czech-republic/
Most likely your US LLC will be treated as a S.R.O in CZ
vinodgn0088
2020-04-16 12:49
@tiagomdreganha, For you moving out from EU will trigger exit tax. Your best bet at present seems to be Cyprus non-dom with frequent travel to different countries. ie, Have a Cyprus local company along with the USA LLC.
vinodgn0088
2020-04-16 12:50
Also, draw a small salary from Cyprus company, pay some social tax, keep a small room rented throughout the year. Stay just minimum days in Cyprus and make sure that you can get a personal tax residency certificate from Cyprus.
vinodgn0088
2020-04-16 12:51
All the profits from USA LLC, keep it outside Cyprus and spend while outside of Cyprus
vinodgn0088
2020-04-16 12:53
If you stay longer in Cyprus, they can also claim that USA LLC is tax resident in Cyprus, thats why I told you to stay minimal days to satisfy tax residency and tell them that USA LLC is not managed from Cyprus (only if they ask)
simon
2020-04-16 12:54
The way I understand it, it doesn't matter if Czech deems the LLC a PE as it will generate no profits anyway (you may have a compliance burden but if all profits are directed to yourself and taxed at the personal level, you should owe no corporation tax).
simon
2020-04-16 12:54
Cyprus is indeed a pretty good option, especially as you only need to spend 60 days there to maintain the residency (and will pay no personal tax if you only pay yourself via dividends). You could spend 60 days there, a few months in Czech and a few months elsewhere.
vinodgn0088
2020-04-16 12:56
@simon, Why you are saying that PE won't generate profit? I think CZ tax worldwide income, So his business income outside is also taxable. And if he transfer all the profit part to his self-employment to deduct 60% std.expense, it will be treated as a shady setup to reduce tax base
simon
2020-04-16 13:03
The PE will be taxed on Czech-sourced income (all the company's income if all work is performed from the Czech Republic). It's certainly a bit of a gray area whether he could transfer all profits this way and not get into some trouble in the long run. Cyprus is a much better option in this respect (very clear, very little risk).
vinodgn0088
2020-04-16 13:07
all the company's income if all work is performed from the Czech Republic << This is why I said it's difficult to operate a US LLC from CZ if he is a one man army :slightly_smiling_face:
vinodgn0088
2020-04-16 13:10
Also, it is not a great idea to create a self-employment to squeeze profit from a company just to reduce the tax base. The taxman will definitely treat it as a shady setup and If what I heard is right, on the annual returns of a company related party transactions must be disclosed.
gbroome
2020-04-16 13:37
@vinodgn0088 I'm not sure how you come to the conclusion that it most likely will be treated as an S.R.O in CZ. I can't find anything to say it will or not. It looks seems like you are not a fan of the US LLC setup. Do most countries not treat them as transparent or has it not really been tested? I'm pretty sure Cyprus would also want to know about a US LLC being run on the side even if work is done outside Cyprus too being a tax resident in Cyprus, that seems like more of a shady setup.
Either way the PE shouldn't matter as the profits are all being reported in CZ. The self employment setup seemed like the cleanest way to record salary from running it and would allow me to pay the right social security. I don't think it makes too much difference really just reporting the net profit then in CZ I'd just be putting more of the expense through the US LLC instead, and pay 15% on any salary too. Seems a pretty weird way to record it though. Wait until the end of the year and record it as other income or something on a tax return and not really have a formal setup there. In New Zealand I'd be recording it as self employment income although of course we don't have the benefit of that generous automatic deduction. I can see it does look dodgy which is why I asked about it but at the same time looks like it could be considered appropriate. I think to have something formal there and pay social security I will still need to register as self employed, but in order to play it safe it sounds like I should not take the allowed 60% deduction on the work performed in CZ.
Cyprus for 60 days a year would be great but I'm not sure the tax savings are that great. By the time you setup a company there and pay for compliance of that, pay 12.5% tax and now a 2.65% dividend tax, pay ss on min wage, and then also pay for a room for a year. If you could do all that for the tax certificate and then run something outside if only there 60 days then maybe but I don't think its that simple.
gbroome
2020-04-16 14:24
Another thing, how is my proposal any different to say me being a resident of Cyprus with a Cyprus company which is the single member of a US LLC. Then the Cyprus company claiming further deductions in Cyprus?
If that's not possible it seems the US LLC just complicates things. However it's a great thing to have for an Amazon business as the member can easily change but I dont have to change the ownership details with amazon which they hate.
tiagomdreganha
2020-04-16 14:54
I think the point of the Cyprus company is having substance, paying tax, SS etc, to be a "normal tax payer" to avoid a bigger scrutiny of the US LLC (which, as I understood, doesn't have any connection with the Cypriot company).
If any question arises, you only spend circa 60 days in Cyprus so you can use that to claim you don't manage that US LLC while in Cyprus. Hence Cyprus being a good destination, as you only need to be there 60 days to be deem a tax resident, making it harder for them to claim Place of Management of other companies.
It's a similar set-up as I've seen done in Portugal with the NHR, to avoid Place of Management people either don't spend any time in Portugal or have multiple foreign directors.
@vinodgn0088 did I get the basic idea right?
What's the reason to keep a rental there btw? Since we are claiming only to spend circa 60 days there.
I wouldn't trigger exit tax at the moment, but definitely need an whitelisted EU country to avoid red flags from my domicile country.
tiagomdreganha
2020-04-16 14:58
@gbroome the benefits of the US LLC are access to banking system, payment gateways and low reporting/accounting. Instead of having to deal with the complex accounting systems of EU countries.
Amazon/eCom business are almost always sold as an assets transfer due to the unknown liabilities for the buyer that can come with buying an existing company.
vinodgn0088
2020-04-16 14:59
@tiagomdreganha, You got it right. The rental apartment will serve as a tie and your permanent home availability in Cyprus. I said this specifically to your case as you have own home in your home country. This will help you in case your home country says that they need tax because you got ties in your home country. Of course you have option to rent your home country house, but having a whole year lease in Cyprus is adding more weight to your residence claim in Cyprus and shows your intention to come back to Cyprus after visiting several countries.
vinodgn0088
2020-04-16 15:04
@gbroome, First of all you need to understand the fact that it is not so easy like you think. If that was the case everyone would be registering a USA LLC or UK LLP and just run business from their home country and say that USA LLC is tax resident in USA. If a USA LLC is operating in CZ local market, the first thing you need to do is register a PE with companies registry. If you don't plan to have local CZ clients you don't need to register a PE with but still the tax department will see it as a PE as you reside in CZ and operate fully from CZ soil. When it come to recognizing a foreign entity, the tax departments actually compare it with local laws and treat as one. A USA LLC is an entity with limited liability for all partners. In this case close match in CZ is S.R.O. If you don't believe what I am saying, you can approach any well known tax advisers within CZ. preferably PWC, EY, Deloitte etc. If your profit is not big, its better don't think too much on taxes and settle somewhere where taxes are low or nil ( UAE)
gbroome
2020-04-16 21:24
@tiagomdreganha Yep I get that, and if you could really achieve only being there for 60 days (although I think you still need to show somehow you have a long term rental even for the Cyprus authorities) then its an ok option but its still hard to justify the US LLC not being tax resident in Cyprus becuae by default it would be since its transparent. I think you would need an offshore company as the member. Also where do you find the income for a local Cyprus company then if its not connected? Ok if you have a second business or income stream.
I know the benefits of a US LLC but it still has to be owned by someone and that member whether an individual or company needs to account for it somewhere so in most cases you are still going to have complex accounting somewhere. Unless you let it flow to yourself in a tax haven. What I meant about the Amazon connection I don't mean I intend to sell it. I just mean its imporatnt to get it right now because you can't easily change that connection with Amazon. Using a US LLC means that is the connection and I can easily change the member for example if the single member for now is a Cyprus company and later I change that to a 0 tax company and live somewhere else I can easily do that. I am in the process of changing it from a UK LTD for this reason as I am now no longer living in the UK.
gbroome
2020-04-16 21:39
@vinodgn0088 I never said it was simple which is why I've spent many hours on this already. I am also not claiming that the US LLC is tax resident in the USA, that would make no sense at all. If you think its like an S.R.O because its a limited company then I think that perhaps over simplifies it and would mean that the US LLC would pointless, so I'm not sure why they are discussed by so many as a good solution because even a perpetual traveller should be resident somewhere. It would be really interesting to know which countries do treat them as non transparent but I think its not that clear. In NZ I think I am ok as the DTT specifically mentions them.
Ultimate plan is to settle somewhere with low or nil taxes. This was a temporary solution to be in the EU a couple of years. This discussion now raises doubt in my mind how useful a US LLC is even if the single member is an offshore company like Cyprus or Hong Kong. My thinking previously was that some deductions are also justified from that holding company (especially if living in that country) which is actually similar to the Czech setup.
marziovit
2020-04-17 12:38
@simon can you point me to the guided form online or show me an example annual return compiled?
timorshait
2020-04-17 19:06
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timorshait
2020-04-17 20:35
Hey, I had a question regarding self employment and taxation in the UK. I'm not a British citizen, but I have a settled status in the UK as I?ve been here for 7 years now. I?m about to the digital nomad route and trying to figure what are my implications on my taxes*.*
If I leave by 30th of July 2020, it?ll be under 121 days that I?ll be in this current fiscal year in the UK, which is the threshold to not be considered a tax resident if you?ve 1 tie (being over 91 days in either of the last two tax years, which I have).
My question is, if I leave the UK before before the 30th as I mentioned, I assume I will still have to submit a final self assessment, but would I have to pay taxes for earnings between 6/04/2020 to the moment I leave on 30/7/2020 ? If I leave on before the date I will not quality as a tax resident for this year. I hope this makes sense, thanks for your help in advance
simon
2020-04-18 02:57
@timorshait You'll have to file a final return in April 2021, covering the period you spent in the UK (06/04 to 30/07). You'll need to include SA109: https://www.gov.uk/government/publications/self-assessment-residence-remittance-basis-etc-sa109
simon
2020-04-18 02:58
Also, do keep in mind that non-residents cannot file online so the deadline is the end of October (postal filing deadline)
buynps.org
2020-04-18 04:13
> NO-you cannot be a ?tax resident? in a country which does not have a law that invokes income tax. How can you say what conditions would subject you to income tax in a country that doesn?t even levy any
I was told this by a tax consultant - ie. for a country like Cayman Island, you cannot be come a ?tax resident? there?
simon
2020-04-18 04:34
You can be a tax resident in any country, tax haven or not. In the case of the Cayman Islands, you can get a tax residency certificate if you maintain your domicile there (it?s your main home).
buynps.org
2020-04-18 04:41
yeah, interesting
buynps.org
2020-04-18 04:42
can you ?sneak? into a country like cayman islands on tourist visas and get > 183 days?
buynps.org
2020-04-18 04:42
then claim tax residency?
buynps.org
2020-04-18 04:42
or you have to get a PR?
buynps.org
2020-04-18 04:42
https://www.discusholdings.com/2019/04/22/bahamas-tax-residency-certificate-2/
```The government of the Bahamas grants tax residency certificates for those High Net Worth Individuals, who obtained their permanent resident status through the investor migration programme.
The permanent residents may receive the tax residency certificate of the Bahamas if they physically reside at least 90 days in the country and do not spend more than 183 days in one other state. Meanwhile, the certificate contains the individual tax number (TIN) and the holder's citizenship or country of birth. All financial and tax data will be subject to the international bank account information-exchange agreements, as the CRS. According to the Bahamas Tribune, the TIN will demonstrate that the Bahamas is the domicile (the principal residence) of the taxpayer. ```
buynps.org
2020-04-18 04:42
i saw here, maybe PR is a requirement.. if not, it?s just 90 days
simon
2020-04-19 01:13
@buynps.org I imagine that you'd at least need some sort of resident visa.
simon
2020-04-19 01:22
You can login on the RIK portal and create one for your company. There is no consequences as long as you do not submit it
bigworld
2020-04-19 09:27
I believe that by definition a tourist can not be a resident :blush:
frederic.scheffer
2020-04-20 02:40
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house.leelah
2020-04-22 06:41
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d.mikocionis
2020-04-22 15:30
Hi everyone! Does anybody have a US LLC and Estonian Company as a holding company? I'm trying to figure out how I can hold cash in my company for a year or two without paying taxes on undistributed profits. Saw that this kind of structure would allow me to do that.
Thanks!
michal.opoka
2020-04-22 15:40
it depends where you are tax resident
d.mikocionis
2020-04-22 15:50
@michal.opoka why should it matter in this case? We're dealing with corporates here and no money will be distributed to an individual
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2020-04-22 16:04
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michal.opoka
2020-04-22 16:11
@d.mikocionis Tax authorities in many countries doesn't view it this way and there are many laws which are on their side, check topics like controlled foreign corporation (CFC), pernament establishment, corporate residence
d.mikocionis
2020-04-22 17:28
Thank you @michal.opoka!
d.mikocionis
2020-04-22 17:28
figured it out as well
gbroome
2020-04-22 20:08
@vinodgn0088 @simon would still love to know the usefulness of a US LLC/UK LLP if most countries treat them like limited liability companies, s.r.os etc? Even with a holding company owning them somewhere it seems a bit pointless with what you are saying. Any ideas on which countries do recognise transparent entities? Also if they do what is the income of the partners classified as for reporting, just something like other overseas income? And if the LLCs profits are distributed and reported at partner level surely the PE doesnt matter.
simon
2020-04-22 20:42
An LLP is always a partnership for tax purposes and nearly every country treats it as such (making it useful regardless of where you live and work). A US LLC, on the other hand, can elect to be treated as a partnership, a corporation, a trust, a non-profit or a disregarded entity. Many countries will recognize this treatment (for example, Australia, UK, NZ etc) but not all (in which case they will usually treat it as a corporation). This is not an issue if you are the tax resident of a territorial taxation country / tax haven but can be an issue if you are the tax resident of a high tax country and spend most of your time there (unlike the Cyprus strategy that allows you to maintain your tax residency while spending little time there).
gbroome
2020-04-22 20:53
Ok thanks Simon. It sounds like to be sure then it's worth also putting an LLP into my mix which I'm beginning to realise works better for Amazon too.
Doesn't this also raise the possibility that a disregarded LLC can pay dividends in countries that treat them as corporations, which could be an advantage in some cases as long as not establishing PE.
simon
2020-04-22 22:10
Yes, there are situations where having the profits distribution treated as dividends could play in your favour.
gbroome
2020-04-22 22:26
Even Cyprus right if LLC is run from outside or Slovakia 7% dividends tax if the companies just a holding company paying dividends too an individual. Probably more risky than other setups though since it hasn't been tested.
vinodgn0088
2020-04-23 01:52
@gbroome, A LLP is also no different. If you are the sole UBO then it could be problematic as well. Have a look at https://lp-register.companiesoffice.govt.nz/help-centre/overseas-limited-partnerships/registering-an-overseas-limited-partnership/
This means that in order to operate legally a UK LLP in New Zealand you need to regiser the same in NZ.
So the accounting etc is done according to NZ standards and in UK you just report NIL profit if there is no UK PE.
I think LLP is best where it is Incorporated and nomads with tax residency in territorial countries and travel lot.
simon
2020-04-23 02:10
@vinodgn0088 The main advantage of an LLP in such a situation (the partners aren?t nomads) is to make compliance easier to handle for each partner in their respective countries. Even if they have to register the partnership locally, they will only have to worry about reporting their share of the income. There?s no need to worry about the UK or the countries where the other partners reside.
Achieving the same result with a corporation would be far trickier (and would likely result in corporate taxation, as opposed to pass-through taxation).
simon
2020-04-23 02:13
NZ is actually one of the countries where this makes the most sense as there isn?t a significant difference between corporation tax rates and personal tax rates.
vinodgn0088
2020-04-23 02:35
@simon, Consider an example. Say a NZ citizen and AU citizen Incorporated a UK LLP and registered it locally as well. Under what circumstances taxes department of either NZ or AU can demand to produce the accounts of UK LLP to see whether the business expenses occurred by UK LLP were legal or not.
gbroome
2020-04-23 02:54
@vinodgn0088 This is a companies office link not a tax department link. I also think the LLP wouldn't be considered carrying on business in NZ according to the companies office. The thing I am trying to do is avoid extra compliance in NZ I only plan to be here 1 or 2 years and it makes no sense to keep registering businesses in each country if I'm declaring the profit on a tax return anyway. This also complicates the company connected to Amazon. The eventual solution will be to have a holding company once I move to a country where it makes sense.
vinodgn0088
2020-04-23 02:58
'Definition of 'carrying on business'
The concept of 'carrying on business' is not specifically defined in law. However, the Limited Partnerships Act 2008 deems an overseas limited partnership to be carrying on business in New Zealand if its activities include administering, managing or dealing with property in New Zealand as an agent, personal representative or trustee, whether through its employees or an agent or in any other manner."
simon
2020-04-23 02:58
@vinodgn0088 They can?t, because nothing is reported in the UK in such a scenario. What will be reported in NZ / Australia will depend on where the work is actually performed (for example, if the NZ partner performs all the work then all income will be reported / taxed there under NZ rules and the Australian partner will report his share of the profits and get a tax credit for NZ tax paid).
vinodgn0088
2020-04-23 02:59
@simon, I am asking about expenses not income.
simon
2020-04-23 03:01
@vinodgn0088 As I replied, if for example all the work is performed in NZ that is where all the income is reported (including the expenses) according to NZ rules (not UK / Australian rules).
vinodgn0088
2020-04-23 03:03
@simon, what if half work in NZ and half in AU
gbroome
2020-04-23 03:06
@vinodgn0088 yes this is part of the definition from the link you already sent. Theres also a lot of exclusions. Either way I'm not managing or dealing with property in NZ. But this is also purely about business registration and reporting. Tax reporting is different.
I'm pretty sure whatever profit I put down as my income they could still audit the expenses I claimed overseas.
simon
2020-04-23 03:12
The UK is one of the few countries to clearly explain how that works in practice.
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2020-04-23 07:43
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2020-04-23 08:32
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2020-04-24 03:26
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2020-04-24 07:08
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2020-04-26 06:36
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benjamin
2020-04-27 04:25
Theoretical question:
A lot of single director businesses who live in a territorial location, still have the problem of place of management, PE etc. Which means they should still be paying tax as local source income if they don't spend the majority of the year travelling.
Would this workaround be possible...
1. Yes, you're running your LLC or LLP from your territorial country. Therefore you should pay tax on your profits as local source.
2. Travel a few times a year and during this time employ yourself as an employee of your LLC or LLP in which you are paid a high salary for the contracts.
3. The LLC or LLP makes no profit at all because all the money was paid out in Salaries.
4. The Salary is genuine work performed outside your territorial tax country.
Does this work? Wouldn't this remove the issue of physically working from your tax resident country most of the year? It doesn't matter that it could be taxed as local source, because no profit was made.
Obviously, the salary would need to be realistic and a holding company put in place for excess profits. But on the surface it makes sense.
Am I missing something?
simon
2020-04-27 04:40
@benjamin Most countries have anti-avoidance rules that would prevent such a strategy from working.
In practice, however, those rules are rarely enforced (ranging from moderate to likely in places like HK and Singapore to very unlikely in places like Panama, Malaysia etc).
simon
2020-04-27 04:52
Speaking of territorial taxation, there?s one country no one ever seems to talk about and it?s Bolivia.
It?s fairly easy to qualify as a resident, foreign-sourced income is excluded, there is no firm concept of permanent establishment (foreign businesses engaging in occasional business in the country are not subject to tax), no CFC rules and no defined criteria for tax residency. Oh and Bolivia isn?t a CRS country..
buynps.org
2020-04-27 04:55
@simon wow, hidden gem, Bolivia?
simon
2020-04-27 05:00
Hidden gem from a tax perspective but from what I?ve heard it?s not brilliant from a quality of life perspective. Anyone here has ever lived in Bolivia?
simon
2020-04-27 05:19
While we are at it, another interesting territorial taxation country is St Helena (UK territory).
There are lots of ways to qualify for residency:
https://www.sainthelena.gov.sh/public-services/immigration/
Only 90 days must be spent on the island every year to maintain tax residency. Foreign sourced income is exempt and St Helena isn?t part of CRS.
After five years (provided that a minimum number of days were spent on the island), it?s possible to apply for St Helenian status (and a BOTC St Helena passport). A pretty nice feature of St Helena is that when you acquire St Helenian status, you also acquire UK citizenship (and are eligible for a normal UK passport in addition to the BOTC St Helena passport). It?s one of the world?s very few ?2-4-1? citizenship deals.
jerrycjchang
2020-04-27 05:28
I spent about a month in Bolivia 15 years ago and it is very much an under developed country, even in the context of South America. Poor infrastructure and weak economy. If you choose to live in the capital city, the highest in the world, you?ll even have to get used to the altitude. Food wasn?t great. Saying all that, I had an amazing time travelling there, the nature is stunning if you?re the more adventurous type. Lake Titicaca and the salt flats are in my top 3 travel experiences. But that?s another topic
alejandro
2020-04-27 13:08
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burrup.lambert
2020-04-27 17:19
What other 2 for 1 citizenship deals are out there ? If you gain St Helena citizenship now do you also gain British citizenship or was it only if you held it BEFORE the new act came in in 2002? I know it can get very confusing as I've personally attempted to go through the process being the child of a British by descent citizen whose mother was also part of a former British colony.
burrup.lambert
2020-04-27 17:22
It would seem there is some discretion.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/633053/naturalisation-as-a-botc-at-discretion-v1.0.pdf
Page 5 details stricter requirements.
simon
2020-04-27 17:50
There?s more details in this more recent document:
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/791967/Registration_as_British_citizen_-_other_British_nationals3.0ext.pdf#page5
(Page 20)
It seems rather straightforward to apply for UK citizenship as a St Helenian but I?ve not found any first hand experience online (other than from long-term islanders).
simon
2020-04-27 17:56
Interestingly, St Helena makes some of the best coffee in the world (very expensive though). They will also be connected to Google?s Equiano fiber cable (currently under construction with 2021 as the completion date). Currently the island relies on a slow and expensive satellite link, with the cable it will become one of the best connected communities in the world (with 2+ GBPS of capacity per capita).
simon
2020-04-27 17:59
Great coffee, blazing fast internet, good weather year-round, English-speaking, excellent tax system and possibly a great citizenship to acquire... I might actually consider it!
burrup.lambert
2020-04-27 19:04
See you there :wink:.
burrup.lambert
2020-04-27 19:09
Another thing to take note is it looks like it falls under "British citizenship otherwise than by descent" which usually passes to children, where as "British citizenship by decent" usually doesn't.
nechita.beniamin
2020-04-27 22:18
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tiagomdreganha
2020-04-27 23:47
"Generally speaking, a person who leaves St Helena but with an intention of returning at the end of a transitory stay overseas would be regarded as maintaining St Helena as a normal place of abode and would remain a resident provided they are physically present for 3 months every tax year."
Clear as water. I like them already.
@simon how does it work in terms of classifying income as local or foreign sourced? (when you are the owner&director of the company incoporated somewhere else)
simon
2020-04-28 02:42
@tiagomdreganha Not only are things reasonably clear there but given the nature of the place, I'm pretty sure you could arrange lunch with the finance minister / immigration minister if you had questions!
simon
2020-04-28 02:43
Income source determination is usually based on where work is performed. If work is performed in St Helena (physically), the income is local. If work is performed abroad (physically), it is foreign sourced.
simon
2020-04-28 02:45
That's why this is such a great program, you can realistically limit how much work you perform during the three months spent on the island every year (so that you stay under the 7000 GBP tax-free allowance).
simon
2020-04-28 02:45
And perform most of your work when abroad, so as to essentially live tax-free.
tkrunning
2020-04-28 10:12
St Helena sounds interesting. I watched this short documentary about their airport recently, which may be of interest to anyone considering making it their base: https://www.youtube.com/watch?v=5-QejUTDCWw
burrup.lambert
2020-04-28 12:36
Wow, sounds like Telstra with NBN in Australia. They are getting jacked on prices too:
*Helenians pay 82 pounds per month for 11 gigabytes of data according to Sure?s https://www.sure.co.sh/broadband/broadband-packages/*
tiagomdreganha
2020-04-28 13:28
SpaceX will crush these guys once their service becomes operational at these locations. They can charge the similar prices and provide a 100x better service. I don't think they will target locations where cheap fiber is already available.
simon
2020-04-28 22:38
@burrup.lambert Not to mention the shocking >1 GBP / minute rate for international phone calls...
simon
2020-04-28 22:39
@tiagomdreganha Definitely! Starlink + Tesla solar roof + Powerwall seems to be the way to go on St Helena
simon
2020-04-28 22:39
To get around the price gouging local service providers
timorshait
2020-04-29 09:45
*Hello all, does anyone have an answer to the following:*
*If I'm a non-resident and non-domicile sole-trader / partner in an LLP in the UK, If I have customers based in the UK that purchase my Digital Goods, will that UK-based income be subject to UK income tax? Initially I thought that it won?t be taxed as it matters where the work is sourced, which is out of the UK. However my accountant informed me that with or without the LLP, all profits arising from UK sales will be charged to income tax in the UK.*
*If anyone knows more about this and maybe operates in a similar situation, it'd be great to know.*
*Thanks*
burrup.lambert
2020-04-29 12:35
Any more of these hidden gems we should know about?
antonio.fonduca
2020-04-29 13:03
@benjamin @simon a related question regarding work being performed ?on the road? from various locations/countries: are you supposed to save all traveling related receipts and keeping a logbook about your whereabouts and what you did, when and where? I.e. how are you supposed to prove that you have been traveling if it comes to that (whether by car, train, flight etc). And is it ultimately your responsibility to prove that you have been traveling or the taxmans responsibility to prove that you have not?
simon
2020-04-29 14:43
@timorshait If the work is physically performed in the UK, it will be liable to UK income tax
simon
2020-04-29 14:45
@antonio.fonduca Your passport will be enough, in most cases (the stamps each show a date of entry and exit). For intra-Schengen travel, you?ll need to keep receipts (transportation and accommodation).
simon
2020-04-29 20:27
French Polynesia could be a hidden gem as sole traders there pay a flat 5% rate on their turnover. This makes it ideal for consultants, freelancers etc. Because it is part of France, time spent there counts towards French citizenship. EU citizens can move there freely (although a work authorization is needed for local work) while non-EU citizens can move there without a visa but must ask for a long-stay permit before the 3 month visa-free entry expires.
simon
2020-04-29 20:31
I've talked about it before but Japan is a territorial taxation country, for non-permanent residents. Maintaining tax residency is as simple as renting a room / condo / house there (there is no stay or visa requirement).
simon
2020-04-29 20:37
Antigua & Barbuda is an interesting option as citizenship can be acquired in exchange of a 100000 USD investment (plus 30000 USD processing fee). There is no personal taxation system in Antigua and IBCs not operating domestically are exempt not only from tax but also from having to file returns. This citizenship + local IBC + LLC / LLP = legit tax-free living (an IBC can be run from Antigua but it cannot do business with local clients).
omocha_10
2020-05-01 06:25
Hi, got a website that monetize with ads with a 50/50 partner, we make less than 500 Euro per month, but the plan is to grow it. My partner from UK tells me he has to pay around 50% in taxes.
He lives in UK. Does incorporating the site to an Estonian company would help him? Maybe if income is not distributed?
asarun72
2020-05-01 17:48
@simon how to become a non permanent resident in Japan ?
simon
2020-05-01 18:19
@asarun72 You need to rent a house / apartment. The exact term in Japanese is ?kyosho?, it means temporary accommodation. There is no physical presence requirement.
asarun72
2020-05-01 18:21
But you need some resident visa to live long term after you get in under a tourist visa
simon
2020-05-01 19:24
@asarun72 If you want to stay in Japan long-term you do need a visa but not if you just want the tax residency.
asarun72
2020-05-01 19:38
Thanks Simon !
ktos.zajal.moj.login
2020-05-02 21:10
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frederic.scheffer
2020-05-05 03:17
Hi!
Do you know how the tax residency rules are applied for Thailand?
I am on a Tourist visa since 1st January and plan to stay until end of July (waiting for coronavirus situation to calm down), therefore exceeding the 6 months period in Thailand.
Some people seem to say that in this case Thailand will tax you.
I have no revenues in Thailand and wonder how do they enforce this?
benjamin
2020-05-05 05:14
@frederic.scheffer 180 days is the rule. However, it will not be enforced. Don't worry too much about it unless you plan to stay as a long term resident.
frederic.scheffer
2020-05-05 06:21
@benjamin thanks. No, just waiting the crisis out from here, then will leave
demmbox
2020-05-06 06:38
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madalina.gheorghica
2020-05-07 05:59
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ryan
2020-05-08 03:46
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benjamin
2020-05-08 07:05
@simon Japan does sound Interesting. But, using this as a tax residency and not actually staying there how would you prove to your citizenship country that its your new tax home?
simon
2020-05-09 02:30
You can request a tax residency certificate if you qualify as a Japanese tax resident. You'll need to submit this form + proof of your tax residency at the tax office nearest to where you "live".
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2020-05-09 02:45
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2020-05-09 07:50
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2020-05-10 08:50
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redareda9
2020-05-11 08:35
Anyone managed to apply for a working permit in Thailand as a foreigner working for a foreign company?
redareda9
2020-05-11 08:35
Without using Igloo or something like that
frederic.scheffer
2020-05-11 09:08
Have you had any success? Im in a very similar situation
ivan.lakatos
2020-05-11 10:00
If you're hired full-time by a company based in Thailand it's apparently pretty straight forward according to my friends living in Chiang Mai or Bangkok. Company should be taking care of everything. As a freelancer in Thailand, it's almost impossible unless you find a company that "sponsors you". I tried and gave up. Igloo isn't an option to consider in my opinion as they take way too much tax-wise.
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2020-05-11 19:26
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2020-05-12 12:17
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michael
2020-05-13 03:22
@redareda9 Yes, pretty straight forward. We do it for our team in Thailand. We have local Thai entities that will acquire the WP for our foreign staff. There are certain requirements like, revenues and the ratio of Thai staff to foreign staff.
frederic.scheffer
2020-05-13 06:50
@michael but your company is not Thai? So; like a UK LLP or a HK LTD could hire someone in Thailand and have them get a working visa?
michael
2020-05-13 10:27
As per my previous message, we have Thai entities/ companies that we use to acquire the WP.
michael
2020-05-13 10:28
@frederic.scheffer
frederic.scheffer
2020-05-13 10:29
@michael that are contractors? Or part of your companies?
tatelev
2020-05-13 14:52
Hi, I know that having being a foreign owner of a U.S LLC, selling physical products to U.S customers by way of Amazon FBA does not make it an activity considered ETBUS, therefore I am not liable to filing/paying US federal taxes(just filing Form5472), because I don?t have an independent agent in USA (FBA is not considered one) and no physical presence in US either?
tatelev
2020-05-13 14:52
but is the same true for a foreign owned US LLC providing services to US companies?
tatelev
2020-05-13 14:57
Will a foreign owned US LLC providing services to US companies also avoid the US Tax under the same conditions?
simon
2020-05-13 15:00
@tatelev As long as you do not work while physically in the US, your income isn?t generally going to be deemed ECI.
To answer your question directly, yes you can provide services to US companies tax-free via a US LLC.
tatelev
2020-05-13 15:01
thanks @simon and do you know if it would make any difference in relation to this, if that US LLC is owned by a foreign individual, or if it is owned by a foreign company?
simon
2020-05-13 15:02
It makes no difference
tatelev
2020-05-13 15:02
thanks
michael
2020-05-14 03:19
@frederic.scheffer part of our companies. Contractors don't get a WP, we work with them on a contractor agreement.
frederic.scheffer
2020-05-14 03:22
Thanks
redareda9
2020-05-14 05:25
@ivan.lakatos @michael I heard on some Podcast a guy living in Bangkok and apparently having a WP without any Thai company involved in the situation. Just a HK company. Will try to get more infos.
We all know setting up a Thai company is a real nightmare.
ivan.lakatos
2020-05-14 05:34
Great, appreciate it. Curious to hear more.
michael
2020-05-14 05:36
Thank you @redareda9 That's interesting to hear... I spend only part of my time in Thailand nowadays.... so a WP isn't a must anymore... I try to limit the amount of exposure to there. With all the Cv19 situation, it will be interesting to see what rules they will implement after this.
michael
2020-05-14 05:37
I have friends who try going down the BOI route.... however that's also another process. I know of only one of them obtaining BOI status for the project.
tkrunning
2020-05-18 12:54
Maybe @simon or someone else can bring some clarity to a question a friend of mine is having...
He lives in the EU (primarily Portugal?although have the freedom to be more nomadic if it would help) and currently has an Estonian limited company. He is selling courses and workshops online (with enough of and live/interactive component to not be affected by VAT MOSS), mostly to the US, but the EU is the second largest market.
He is considering moving the "operations" to a US LLC which will sell the courses, pay his contractors (not in the US), etc. Could he avoid charging VAT to EU customers of the US LLC? The LLC would either have him as a natural person or the Estonian company as the single member?would this choice impact the outcome? In the former situation, most of the profits would go to the Estonian company (which is the owner of the IP/brand/website) according with a service contract.
Would this come down to the fact that he's staying in the EU most of the year, and hence need to charge VAT anyway? And even if that's technically the case, would it be a situation where he's unlikely of getting in trouble other than potentially having to pay back the missing VAT? (The US LLC would probably be registered in NM for privacy and cost reasons, in case it matters.)
tkrunning
2020-05-18 12:56
This is really interesting... IIRC Japan has a very advantageous tax treaty with the US when it comes to withholding tax on US investments.
tkrunning
2020-05-18 12:58
Indeed: https://www.bogleheads.org/wiki/Nonresident_alien%27s_ETF_domicile_decision_table
Japan has both a 10% (!) WTR on dividends and an estate tax treaty.
vinodgn0088
2020-05-18 13:37
@tkrunning *, Where is your friend's personal tax residency? If he is tax resident in Portugal, most likely Estonian Limited is also tax resident there unless he got economic substance in Estonia. If the Estonian Limited is considered as managed from Portugal then need to follow Portuguese rules on VAT, Accounting and CIT. If his services are not affected by VAT MOSS, then it falls under normal cross-border sales and need of a VAT number depends on his revenue from sales to each EU member states (VAT limit thresholds).*
ryan059
2020-05-18 20:18
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bigworld
2020-05-20 13:42
Very interesting as long as there is high speed internet
rp_vpnet
2020-05-20 18:21
german VAT
eduard543
2020-05-20 22:23
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albert
2020-05-21 03:16
Does anyone have info/experience with Puerto Rico Act 20 and Act 22? As a non-US citizen, if I were to obtain an E1/E2 investor visa, relocate to PR and maintain a bona fide residence in PR, is the expected tax rate = 4% (4% corporate + 0% on dividends, + N/A on zero salary (is there a weird US tax law that prohibits you extracting with 100% dividends and 0% salary)?
I assume a PR LLC is required because Act 22 only exempts dividends, interest and some CG? and Act 20 only exempts PR LLCs?
Lastly, is it possible to open a PayPal business account in PR? I tried to go through the sign up process and it looks like PR is a State it accepts but if anyone have first hand knowledge to share that?d be appreciated. Thanks!
mikeseo
2020-05-21 08:21
you're gonna move to the US just to get a paypal account??
tiagomdreganha
2020-05-21 09:40
With the amount of sales he's processing I'd be pressed to get PayPal working too :sweat_smile:
vinodgn0088
2020-05-21 09:42
I think he is trying to reduce the taxes + get a Paypal account too.
buynps.org
2020-05-22 06:38
@albert where are you located now?
asarun72
2020-05-22 18:21
Recommend to go visit first if you can live there a minimum of 6 months a year
7070140
2020-05-26 10:06
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kris
2020-05-27 19:26
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kris
2020-05-27 19:29
Hello everyone! New here - desperately looking for a great tax lawyer + tax accountant in the US. I am not a US citizen but do have a US based business & am a nomad currently living in Mexico. Would anyone have any recommendations of tax lawyers and/or tax accountants? Thanks in advance!
tiagomdreganha
2020-05-27 20:21
Bobby Casey from http://globalwealthprotection.com
I know a few clients of him, mostly ecom/FBA
letstalk
2020-05-27 20:55
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ryan059
2020-05-28 12:07
If there's a DTT beween Georgia and the UK and it turned out I was tax resident in both of them then ... how would I make sure I get to pay the tax on the Georgian side?
alex720
2020-05-28 12:07
Tiebreaker rules
alex720
2020-05-28 12:07
Like it says in the treaty
ryan059
2020-05-28 12:11
Perfect, thanks @alex720
albert
2020-05-28 15:22
So with a DTT, generally, if you want to pay tax on the Georgian side, you need to work on the Georgian side and do not create a PE in the UK. The DTT should list what constitutes a PE.
markus
2020-05-29 07:23
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arkdeeplove
2020-05-30 02:09
Does anyone know if this structure still works in 2020?
https://www.nexiabt.com/hubfs/Malta%20as%20a%20Holding%20Company%20Jurisdiction%20For%20Portuguese%20Non-Habitual%20Residents.pdf
vinodgn0088
2020-05-30 02:28
@arkdeeplove, If there is sufficient economic substance in Malta then it will work ( resident director in Malta, office and staff in Malta etc)
isaac.cu
2020-05-31 06:21
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benjamin
2020-05-31 16:45
@simon I've read some things that state you generally need a residence card to be able to lease a property, open a bank account and mange things at the tax office. To get a residence card you need a visa thats longer than the temporary tourist visa.
The good news is if you get a proper visa, when you land at the airport, you get the residence card on the spot, and a tax ID etc is provided to you later to your domicile, which is great.
The issues here though, if you just wanted to use Japan as a tax home, how could you do this on a tourist visa as you wouldn't be able to lease a property?
Going through the channels for a business, working or student visa doesn't seem worth it if you're not wanting to live there a lot of the time.
asarun72
2020-05-31 23:44
@benjamin what?s the visa name to claim residency?
benjamin
2020-06-01 02:41
There are a lot of visa options. From what I can see, you get a residence card for any visa that is not a temporary tourist visa.
albert
2020-06-01 20:31
@tkrunning don?t forget to consider anti-treaty shopping. as treaty benefits are usually for residents and if you are resident of a treaty country, it probably means you are paying a fair amount of taxes for the country to be a treaty partner
albert
2020-06-01 20:38
@benjamin are you inquiring about a visa for the purpose of maintaining a residence and getting a tax id easily to obtain the tax residency certificate?
when i was researching about japan, if you are under 30 and a commonwealth citizen, you can consider a mobility working visa (this visa applies to HK too but HK won?t issue an HKID)
a working visa should have less requirements than a student visa, as you are not required to attend studies
matt134
2020-06-03 08:43
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arkdeeplove
2020-06-05 20:40
Thanks @vinodgn0088. Really appreciate your response!
julienduteurtre
2020-06-07 07:17
Does Canadian LP has a similar thing as ETBUS and NON-ETBUS in USA, meaning that if a company as client in Canada but doesn't have dependent agents in Canada, then it will remain tax free @simon
simon
2020-06-07 07:18
@julienduteurtre As long as you do not physically conduct business in Canada you will not have a Canadian tax liability / have to file a return.
simon
2020-06-07 07:19
In a way, it?s even better than in the US because there is no equivalent to form 5472 (you literally have nothing to file and pay only every five years to maintain the LP)
julienduteurtre
2020-06-07 20:21
@simon Thank you very much for your answer, makes it an interesting option !
Why you don't offer LP creation https://www.freedomsurfer.com/register/ ?
Is there a way to be anonyme with this kind of entity ? Any province that doesn't have public register ? or maybe by using a WY US LLC as member ?
simon
2020-06-08 05:13
@julienduteurtre I do register Ontario LP: https://www.freedomsurfer.com/ontario-lp/
There is a government registry in Ontario but to access company data you need to pay so nothing shows up on Google. I wouldn?t recommend using an LLC as you?ll have to register it as an EPC in Ontario.
bigworld
2020-06-08 11:40
Hi,
Does anyone have experience with Ukraine Private Entrepreneur (PU)? I would be interested in becoming one while living in a high tax country.
https://www.freedomsurfer.com/ukraine/
ivo
2020-06-08 12:18
@bigworld it doesn?t work. Private Entrepreneurs are not separate legal bodies, so you would still be liable with income tax in your country of residency.
bigworld
2020-06-08 12:49
@ivo I am thinking of this: _according to Tax Code of Ukraine, if foreign national registers as a PE, he becomes a tax resident of Ukraine_
bountybairn
2020-06-08 19:48
@bigworld - the issue i think is your tax residency of wherever you came from? No one here probably wants an extra tax residency! but swapping thats another story
bountybairn
2020-06-08 20:31
Looking for some suggestions guys, currently in the UK and now going 100% remote so looking to move abroad but would like a few things .....
1. Good education options for my daughter, aged 6
2. Relatively easy (short time) to get back to the UK
3. Decent options for remote working from a tax perspective, my clients will be all UK based
Initial considerations are Andorra, Cyprus and Malta - any advances on this?
I don't know much about Monaco or San Marino - are they even viable options? Briefly considered the channel islands as well, namely Jersey.
The goal would be to non dom myself for the UK as I can do work remote / or only work 3 days a week to the UK which would be under residency test threshold for the number of weeks i work
simon
2020-06-09 04:00
Has anyone heard of this program? https://www.mondaq.com/italy/tax-authorities/825606/italy-as-the-new-tax-eldorado-for-private-individuals
simon
2020-06-09 04:04
Seems like you could pay under 5% if properly structured
marziovit
2020-06-09 06:20
@simon you could take a 5 year vacation in Sicily or Sardinia, food is excellent and weather is great for the most part of the year. The only problem is that people, especially in the south are narrow minded and you have to stay there for 183 days.
ggiampieri
2020-06-09 08:19
@simon government said it last year, not sure if it passed. Only for foreigners of course! I think it was 5% on the first 100k
jase
2020-06-09 08:44
Seems they have clarified a few things as originally this was for true hnwi's
jase
2020-06-09 08:44
Now it seems to be interesting for people like us
jase
2020-06-09 08:45
Sardinia seems to be a good option. We have friends there and small hobby farm plots are dirt cheap
ahsmithers
2020-06-09 09:32
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joshuacolombi
2020-06-09 11:32
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karim
2020-06-09 13:52
@bountybairn Ireland Non Dom. You are taxed on remitted funds only. Good Schools for your daughter. Near UK.
albert
2020-06-09 22:02
Another source with a bit more detail (August 2020) https://www2.deloitte.com/content/dam/Deloitte/us/Documents/Tax/tax-globalinsight-190809.pdf
and something recent, the 2020 Tax Highlights
https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-italyhighlights-2020.pdf, page 5 of 13
albert
2020-06-09 22:26
@simon this looks interesting for active entrepreneurs (like me) as it specifically tackles active foreign-sourced income. It seems like 90% of taxable income is exempt, so 10% * [43% national + 1.4%? regional tax + 0.8%? local tax] = 4.52% on salary? Does anyone know if there are additional taxes like social security? And the actual rates for Sicily?
One concern I have is how would you convert ?business? income to ?personal? income? Would you form a US LLC/UK LLP, operating in Sicily, and take a salary/partnership income? instead of operating an Italian entity?
bountybairn
2020-06-09 22:49
thanks @karim have some Irish heritage also actually, but just missed out on dual citizenship by one generation, thats a good idea i'll look into it, any links would help but I am sure google will help
bountybairn
2020-06-09 23:01
@karim a quick search showing that worldwide income is taxed in Ireland, are you suggesting that the funds stay in a UK Ltd therefore wouldn't attract tax?
bountybairn
2020-06-09 23:11
This is an interesting option, following peoples. thoughts on this
albert
2020-06-10 01:22
Some follow up to my own questions.
Looks like you cannot own a company abroad due to CFC rules. I?m not familiar with CFC rules but I?d guess that a US LLC/UK LLP will be taxed as a business entity in Italy like a domestic entity. Can someone confirm?
Which means one would need to operate:
1. An Italian company and strip profits via salary but that will result in paying social security (the full amount or the taxable amount)? Salary extract may be limited to ?reasonable expenses?, meaning corporate taxes?
2. Operate as an individual, forego liability protection, probably not the smartest for some businesses
Also, there will be 0.2% tax on financial assets (e.g., savings account) abroad.
karim
2020-06-10 08:54
@bountybairn If you stay more than 183 days you will be resident in Ireland. You can be qualified a Non Dom Resident if you are not Irish and you keep your Domicile in a foreign country (Normally your country of birth or/and your country of citizenship). Then you will be taxed only on the money your bring in to Ireland. There is a levy if you earn more 1M?. But in any case, It's still a good deal. see some links : https://www.revenue.ie/en/jobs-and-pensions/tax-residence/what-is-domicile-and-the-domicile-levy.aspx , https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-01-21a.pdf
karim
2020-06-10 09:08
@albert I am not expert. But maybe US LLC/UK LLP pay you salaries and/or royalties to you personally in Italy. So no benefit left in US LLC/UK LLP and your earning could be taxed as personal income according to the new scheme. You have to check.
ivo
2020-06-10 09:44
@bigworld Maybe that works on the Ukrainian side, but you?d still need to sort this out with the authorities at the place where you reside. If you are lucky, the DTA regulates it and you only have to pay the difference between your personal income tax. If not, you will pay the 5% in UA on top of what you owe at you place of residency. The only way I?d see an application for the Ukrainian solution is when you do not have any other tax residency and need/want a place to pay some taxes. But at this point, you may as well go to Georgia and get the same thing with only 1% turnover taxation (though filing requirements are easier in UA from what I?ve heard).
bigworld
2020-06-10 09:51
Thanks @ivo Indeed to do things well, it's needed a DTA among the two countries and consider the tax residency tiebreak rules.
bartek
2020-06-10 09:57
most DTAs have as follows:
1. permanent home available
2. centre of vital interests
3. nationality
4. settle manually in each case
so first two are crucial in most cases :wink:
bigworld
2020-06-10 11:08
@simon do you have the contact of lawyer in Ukraine who can help with the Private Entrepreneur set-up?
simon
2020-06-10 20:33
@bigworld I?d recommend proceeding with caution regarding Ukraine as they are in the process of implementing a set of new rules that may impact those using the PE loophole: https://www2.deloitte.com/ua/en/pages/press-room/tax-and-legal-alerts/2019/2019-12-05-bill-1210.html
bigworld
2020-06-10 21:31
@simon just read it. I think it is more aimed to corporate taxes than personal taxes. I would expect they to implement CFC rules, but as long the tax residency for Personal Entrepreneurs remains as it is I'm OK with it.
bountybairn
2020-06-10 23:00
@jase never managed to sort it before lockdown tbh :neutral_face:
arkdeeplove
2020-06-11 15:42
si006
2020-06-11 17:08
Hi all,
I'm a resident of Macedonia, non-stripe country.
I have an Estonian company and I'd like to offer services on the US market. I've looked into setting up a Wyoming LLC that would be owned by the Estonian company so I can access Stripe and other banking and payment services available to US LLCs.
Does anyone have experience with similar setup and can anyone recommend a CPA?
alex720
2020-06-11 17:12
Maybe incorporate in a country that doesn't tax non resident businesses
alex720
2020-06-11 17:12
Eg Cyprus
alex720
2020-06-11 17:12
Which now has stripe
alex720
2020-06-11 17:12
And then file taxes for your Cyprus non resident company in Macedonia
p_patruni
2020-06-11 17:28
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si006
2020-06-11 19:21
@alex720, For European companies, including Cyprus, Stripe requires that the owner is a resident of a Stripe country. I'm not and Cyprus is not an option.
I'm targeting the US market and with a US LLC I can get stripe. Thank you for the response.
If you have a CPA to recommend, I'll appreciate it.
marziovit
2020-06-11 19:48
@si006 not for european companies but specifically for estonian companies Stripe requires the owner to be resident in a country where Stripe is available. https://support.stripe.com/questions/supporting-companies-that-registered-in-estonia-through-e-residency
si006
2020-06-11 20:41
@marziovit, thanks for the clarification. I'll look into it.
si006
2020-06-11 21:09
I still prefer to have a US LLC to cater to US clients. Does anyone have recommendations for a CPA who has experience with LLC (Wyoming) owned by foreign companies (Estonian or other)?
simon
2020-06-11 21:16
@si006 It?s a Macedonian accountant you will need. A US LLC, in a situation like yours, has no US filing / accounting requirements.
nsh
2020-06-11 22:39
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benjamin
2020-06-12 04:34
Anyone looking into having Thailand as a base there is an alternative to Iglu that I've come across. Shelter.global
Sent them a quick email. You can get a business visa, work permit and bill $1500USD a month through them.
After it's all said and done you'll pay $375 as their monthly fee and $44 in tax.
So you could live in Thailand legally and work for $419/month including your taxes.
The rest of your income you could be tax exempt depending on your business structures and lifestyle. Ie completing the work outside Thailand.
Might be a good option for some.
redareda9
2020-06-12 05:57
@frederic.scheffer
si006
2020-06-12 06:12
Thanks for the feedback. I was planning to use my Estonian company to open a US LLC.
- Apart from Form 5472 do I need to do any reporting for the LLC?
- Would my Estonian company have to get an EIN?
simon
2020-06-12 07:09
Only form 5472, and no the Estonian company doesn?t need an EIN.
karim
2020-06-12 13:58
Maybe just set up your US LLC directly as a personal owner. Use all expenses from US LLC and the remaining profit will be taxed at your level in Macedonia at 10% rate.
karim
2020-06-12 13:59
You just have to get EIN and fill 5472
danz
2020-06-12 15:46
Just came across this, looks interesting. 'foreign nationals will be able to obtain fiscal residency on condition that they spend sixty days each year' https://www.imidaily.com/latin-america/uruguays-new-tax-residency-program-to-open-on-july-1st/
si006
2020-06-13 13:42
@simon and @karim. Thanks for the feedback.
One more clarification. In my business plan I foresee generating revenues that will give rise to some ECI based on the US tax code. Specifically:
- Royalties: by selling through Amazon KDP or US publishers. This gives rise to withholding tax (30% for MK residents, 10% for ES company)
- Membership subscriptions: targeting US, EU and global customers to access exclusive content on recurring monthly or annual basis. I'm not sure if this would fall under the FDAP and constitute ECI. (I understand, these subscriptions may give rise to US sales and VAT tax once thresholds are reached and I'm fine with that.)
So, in this context is LLC owned 100% by Estonian company still a good option?
If I understand correctly from my research, this setup may give rise to US taxes (at graduated rates and can be deducted) and branch profit tax (fixed rate). If I understand the treaty correctly the branch profit tax would be 5% and would apply on the amount of US taxable income that is ECI.
I would appreciate your feedback.
simon
2020-06-14 20:04
@si006 Amazon should withhold tax on your royalties payments (at the rate set by the US-Estonia tax treaty), you do not need to report / pay taxes on those yourself. You can find the current rates for all countries here: https://taxsummaries.pwc.com/united-states/corporate/withholding-taxes
simon
2020-06-14 20:05
Membership sales are not ECI, as long as no work is performed in the US / via a US PE.
si006
2020-06-15 07:17
@simon thank you Simon.
burrup.lambert
2020-06-15 19:02
I'm finally updating my residency status and cutting ties with Australia. Can anyone think of additional financial institutions I need to notify (that would have a tax file number on file).
So far I have:
? traditional banks
? brokerage accounts
? tax office
? medicare
? electoral roll
Can anyone notice some glaringly obvious things that I might have overlooked? I'm compiling an excel spreadsheet finally that I can update when I move country again.
Also, what is everyone's solution for e.g if you have 3 Citibank accounts, Australia, HK and USA. Do you have the same tax file number (or numbers) for all? For e.g, Hong Kong thinks I am a resident there, so I would be under the impression that I should always have my HKID on file for HK banks + whatever country I am an actual resident of. I don't believe Citibank US has anything on file and Citibank Australia currently has my Australian TFN on file.
My main concern is the 3 different entities having conflicting tax file numbers.
fujimoto.fjc
2020-06-16 03:12
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jase
2020-06-16 16:36
Let me know if you manage to cancel Medicare. My experience was that I had to let it "expire". They refused to cancel it on the spot.
burrup.lambert
2020-06-16 22:17
Hmmmm. I'll let you know. If I recall when I contacted them about a year ago they said you can suspend it for 2 years while you are overseas, that might be what they are referring to.
jase
2020-06-17 06:26
Interesting. I was told there is no way to cancel it and it would expire either 2 or 5 years after leaving. (can't remember which)
trevorjames
2020-06-18 01:16
I just opened a Wyoming partnership and was advised it will have 0% tax because we operate the company and do the trade and business outside the USA.
My wife and I are partners in the Wyoming company and live on the MM2H visa in Malaysia, does anyone know if the profits we distribute to ourselves (to our Singapore personal account) from our Mercury account will be taxable in Malaysia? We were advised that the distributed profits could maybe be treated as dividends?
We haven't applied for the Malaysian tax number yet because we haven't spent 183 days here and we were also advised that we might not even need to do that because we aren't taking any salary here and have no income, only dividends (so far from my other company).
trevorjames
2020-06-18 01:26
And I was reading "Under the MM2H visa, expats are not required to pay tax on their income, no matter where it comes from, as long as it's remitted from overseas", so perhaps it's fine to distribute profits to ourselves and not file anything with Malaysia?
wice90
2020-06-18 08:19
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romaindepotter
2020-06-18 12:39
Hello guys, I'm looking for importing goods in UK, I'm a UK LLP owner, comes with this structure a VAT exemption of 70k GBP.
At this title would I have to pay the VAT at the UK customs while I'm still exempt ?
(For information I have my EORI number for importing and I don't have VAT number cause I didn't reach the threshold yet.)
7070140
2020-06-20 22:58
Hello, Would anyone know if there are any European countries which exempt local employment income tax for being not resident? (e.g. Singapore exempts all local (Singapore) employment income if lived in Singapore 60 days or less per year). Thank you for your kind help!
simon
2020-06-20 23:38
@7070140 I?m not aware of any EU countries with such exemptions (I only know of HK, SG, Malaysia).
7070140
2020-06-20 23:42
@simon Thank you for your kind and prompt reply!
994kaloyan
2020-06-21 09:54
As far as I know suspending it is the way to go
enimos
2020-06-21 13:04
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alexis.alfroy
2020-06-23 09:35
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providedsolutions.ad
2020-06-24 07:55
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sarah
2020-06-25 01:57
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elbriella
2020-06-25 12:04
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axel.gay1997
2020-06-26 01:40
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smuft84
2020-06-26 07:56
Anyone know if there is a maximum amount of time Thailand has to make a claim against a tax resident before they no longer have the option to?
simon
2020-06-26 18:13
@smuft84 The statute of limitations for tax in Thailand is ten years.
frederic.scheffer
2020-06-27 09:42
Hi!
Where is a good country to do a "Richard Branson". Go live there, buy a house and get 0% tax.
Bahamas, 500k USD house/appartment and you get residency and 0% tax.
Do you know anyone who actually did it?
Other islands in the Carribeans offering good deals (Say.. for less than 500k usd investment) that work in reality?
simon
2020-06-27 15:39
@frederic.scheffer St Kitts is a better deal as you get citizenship when you purchase a house worth over 200k USD (in an approved development). There is no personal taxation in St Kitts.
tiagomdreganha
2020-06-27 17:20
How attractive is this option tho? Are the developments actually worth the money / transactable after 7 years?
simon
2020-06-27 18:45
I?m not sure how attractive this option is from a real estate perspective, the main benefit is definitely the citizenship.
buynps.org
2020-06-27 22:52
@simon do you have any contacts or companies you recommend for such citizenship investments?
simon
2020-06-27 22:58
Henley is the way to go, they are behind most of the programs. https://www.henleyglobal.com
frederic.scheffer
2020-06-28 02:04
As you wrote on FS, Citizenship comes with the risk of being on tax audit lists? Or getting too much attention/getting a bit harassed by your native country?
Would it be better just settling for residency?
frederic.scheffer
2020-06-28 02:07
Oh and @tiagomdreganha yes, 200k for an approved development, might be really bad actually, like, this would be super overpriced and with maintenance fees even, for foreigners wanting citizenship.
frederic.scheffer
2020-06-28 02:07
I will go have a look at all the islands this winter
frederic.scheffer
2020-06-28 02:26
@simon what about running the business (eCom) from there? StKitts has corporate taxation. Would it apply to a UK or HK company?
Bahamas would be a better option from that point of view?
Thanks
simon
2020-06-29 05:10
For sure you?ll attract attention with a St Kitts passport. The OECD even requires that financial institutions run additional checks when using such passports.
frederic.scheffer
2020-06-29 05:12
Thanks for the info Simon
rtiagm
2020-07-03 07:31
Does anyone know if the W-8BEN is shared with the country of residence?
buynps.org
2020-07-07 12:47
thanks @simon! as a canadian citizen living in panama as a tax resident, is there any extra exposure in getting a St Kitts passport? what do you think?
buynps.org
2020-07-07 12:49
had no idea henley did these programs as well. i thought they just had the index!
simon
2020-07-07 20:45
@buynps.org Not much, as you will already be red flagged due to your Panama residency. In any cases, having those ?high risk? passports and residencies is only an issue if you are using them as part of a tax evasion strategy. If everything is done by the books, it?s only going to make it more of a hassle to open bank accounts, brokerage accounts etc (but definitely not impossible).
buynps.org
2020-07-08 00:51
@simon oh wow, yeah, I had no idea. it sounds like if everything is by the books - is it actually a disadvantage then to have such passport?
simon
2020-07-08 01:36
Like I said, it?s going to make it harder to open bank account etc. You have to weight that against the benefits (access to many Caribbean countries, tax benefits, visa-free travel to quite a few countries etc) and decide if it?s worth it for you.
simon
2020-07-08 01:36
simon
2020-07-08 01:37
Interestingly, you can travel visa-free to every European countries, even Russia, with a St Kitts passport.
buynps.org
2020-07-09 00:33
Cool, thanks simon!
buynps.org
2020-07-09 00:33
So sounds like I am forced to tell banks all my citizenships? I can?t just say what I want them to hear (ie. Canadian)
benjamin
2020-07-14 14:18
May be interesting to some. 7% tax rate. Mostly only worth it to older people really wanting to live in Greece.
https://greekcitytimes.com/2020/07/13/greece-introduces-a-single-tax-rate-of-7/
pierre.berthalon
2020-07-15 09:37
I know I'm a bit late for the US LLC Tax season.
I have a Wyoming LLC which had no activity, *except two small payments to activate the TransferWise account.*
pierre.berthalon
2020-07-15 09:38
Are they reportable transactions to file on Form 5472 or am I being paranoid ?
simon
2020-07-15 11:47
@pierre.berthalon You have to file form 5472 in almost any circumstances, as the state fees / registered agent fees etc are reportable transactions (Part V).
As for your two payments, if they came from your own money (not from the LLC?s money) then yes they would have to be reported.
simon
2020-07-15 11:48
The deadline is today but you can still file form 7004 for an extension if you need more time. The deadline for 7004 is also today.
pierre.berthalon
2020-07-15 14:18
Thanks for the help :ok_hand:
pierre.berthalon
2020-07-15 15:20
@simon Do you happen to know where am I supposed to fax the 7004 form ?
simon
2020-07-15 15:23
+1 8558877737 (make sure to include 1120 and Part V along with 5472)
pierre.berthalon
2020-07-15 15:35
I include 1120 and Part V along with 5472, *with the 7004 form ?*
pierre.berthalon
2020-07-15 15:37
I thought 7004 was used to ask for a 6-months extension of filing 1120 and 5472.
simon
2020-07-15 15:42
Ah no if you want an extension you just file 7004
pierre.berthalon
2020-07-15 15:44
But I can't find the fax number to send the 7004 form.
simon
2020-07-15 15:45
It?s the same number
pierre.berthalon
2020-07-15 15:49
Thank you!
bountybairn
2020-07-16 12:52
As posted under business, i am moving to Cyprus....planning on becoming non dom in the UK, what else may I need to consider specifically around taxation? https://freedomsurfer.slack.com/archives/C1CGFAMQ9/p1594903900373600
levithorntonxc
2020-07-16 19:35
I?m looking at setting up an IBC in Nevis for income generated from services provided to US customers, I am also a US citizen. Am I correct that if I don?t withdraw income from the IBC, I personally can?t be taxed, and as the IBC is a Nevis entity, it is also untaxed for income it earns?
michal.opoka
2020-07-16 19:49
it won't work as far as I know, check US CFC rules
simon
2020-07-16 21:42
@levithorntonxc Do you live / work in the US?
bobriakov.igor
2020-07-17 06:25
@levithorntonxc there were rumors that Nevis will introduce income tax for entities registered after some date. It may be that some clarification will arrive on this matter during this autumn
erik.hayton
2020-07-22 01:20
@simon, I recently set up our UK LLP (R&D Company) as a pass-thru entity for testing e-com automation software created by my Delaware C-Corp (Longer standing Dev Agency). Do you have any recommendations on researching this sort of pass-thru entity process, with these sorts of companies?
To my limited understanding, largely from the copy and comments from https://www.freedomsurfer.com/uk-llp/, the most efficient and fiscally responsible way to proceed would be: to have my UK LLP (R&D Company) handling all transactions (Stripe/etc), then to transfer profits to my Delaware C-Corp (Dev Agency) on a recurring basis; is this correct?
michal.opoka
2020-07-22 15:29
who owns the LLP? if it's your Delaware Corp and you be careful about rules regarding transactions with related entities
erik.hayton
2020-07-22 17:52
We set it up for my Swedish business partner, who is 100% remote, as I am. I believe I have to pay income tax on a portion of my Foreign Earned Income to the IRS, by my partner does not - hence the UK LLP to determine whose funds go where.
Our goal is to pay taxes properly, not avoid them. Do you know of a good resource for learning about taxation on related entities @michal.opoka?
michal.opoka
2020-07-22 18:13
@erik.hayton in that case you have to check US law and your partner needs to check Swedish law, there should be no tax in the UK unless you have permanent establishment there. I'm no expert on US taxes and you should talk with one, but if you work remotely for the LLP while being in US this income will probably qualify as US income not foreign, as for related entities you need to check Arm?s Length Standard https://www.irs.gov/pub/int_practice_units/ISI9422_09_06.PDF - it will have to be applied when you make transactions between your Corp and LLP. It could be easier if corp would own part of LLP and would get money as profit distribution instead of invoicing LLP for services
michal.opoka
2020-07-22 18:24
erik.hayton
2020-07-23 02:38
Thank you for the resources @michal.opoka, I?ll dig in.
bountybairn
2020-07-23 16:26
related to this, if I am working 100% remote in Cyprus what structure would be best....
Income is currently around 180k to a UK Ltd, I have a Wyoming LLC which are not yet connected (was formed by a purpose that passed by so its a bit of a spare shell right now) (I am beneficial owner single partner of LLC, my wife owns most of the UK ltd and I am switching to being an employee).....going to look into Cypriot tax rules but ideally id like to extract income for living there in the most tax efficient way. I am planning on being non resident in UK but i will need to visit occasionally for a few days at a time as part of the UK ltd co operation.
bountybairn
2020-07-23 20:03
So from what I can gather I can be a Tax Resident of Cyprus, and pay myself a dividend from UK company without ANY tax? If thats correct then great, but seems almost too good to be true. The DTA between UK and Cyprus has given me this impression.
What about CFC for the UK Ltd, maybe crushes this dream?
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/875089/Cyprus_UK_2018_protocol_in_force.pdf
nsh
2020-07-25 21:37
Hello everyone,
Very interesting posts!
I need a quick advice on the following please:
? I have a single member LLC registered in Wyoming with a bank account in NY @ Bank of America. I do not reside in the US.
? I collected payments from a customer in the US for tangible goods that shipped from Europe.
Am I liable for any taxes in the US? If not, do I have to report this income?
marziovit
2020-07-26 18:40
@simon will it be possibile to register an irish non-resident company in Cyprus instead of a UK LTD?
simon
2020-07-26 19:08
It should be possible with any of the countries listed here: http://mof.gov.cy/en/taxation-investment-policy/double-taxation-agreements/double-taxation-treeties
nsh
2020-07-27 00:27
@michal.opoka
Thanks for the post! :white_check_mark:
So I basically have to pay nothing. Just have to file 5472 and 1120.
michal.opoka
2020-07-27 00:57
@nsh In case your LLC have non-US bank accounts you will also have to file FBAR forms
nsh
2020-07-28 00:00
@michal.opoka Oh I see! My LLC has a US bank account in NY. I had to fly there by person to open it.
buynps.org
2020-07-28 01:12
Taxation in Thailand - looks like confirming that if you do any work in Thailand online you?re liable for taxes
https://youtu.be/m5KnAkCpul4
frederic.scheffer
2020-07-28 05:30
@buynps.org thanks for the info. Very useful.
rtiagm
2020-07-28 16:24
Can you do online work without a work visa ?
buynps.org
2020-07-28 16:40
Technically not from what I understand
buynps.org
2020-07-30 15:45
Hey guys - I booked a call with a Thai tax lawyer, to really get a deeper understanding of the Thai tax laws. If you have any questions feel free to post them here, happy to ask them for you
frederic.scheffer
2020-07-30 23:43
It might be very probably that different lawyers give different answers, in my experience, for various reasons (different opinions, incomplete knowledge but need to sound like an expert, trying to sell various services/different sales strategy).
But eh, the big ones:
1- Best practice for keeping tax residence in Thailand with only spending 2 or 3 months a year in Thailand and the rest in other countries (without exceeding 183 days in 1 country) ? Goal = not get tax on foreign income when you remit it 1 year later.
2- How to fill the tax report to remit this money 1 year later ?
3- How to remit the money in practice ? Say you want to remit 300 000 USD. That would probably trigger warnings if they arrive in Bangkok Bank or any Thai account. What would be a good way? Or maybe just remit it in your home country but then, which Thai documents do you use to make sure you prove your home country that no tax is due on these moneyz? That's an important one as it is the main goal of this whole thai residence if you want to take advantage of the foreign income not taxed if remitted the year after.
4- How to prove that there is no Permanent Establishment in Thailand, if you are ever asked in the future by the Thai government ? Need solid defense ready in advance
That's all I can think of now.
frederic.scheffer
2020-07-30 23:44
I am curious to get all answers. In the next weeks I'll probably pay Mazars and KPMG for some advice as well and will be happy to share
buynps.org
2020-07-31 01:46
cool @frederic.scheffer - have you seen this?
https://www.mazars.co.th/Home/Doing-Business-in-Thailand/Tax/Thai-sourced-income-and-residence-rules
buynps.org
2020-07-31 01:46
it sounds like any work done in thailand is local sourced?
buynps.org
2020-07-31 01:46
even if company is foreign
frederic.scheffer
2020-07-31 01:48
No, its about your income, not the company
frederic.scheffer
2020-07-31 01:48
" If such income is considered foreign sourced income (income derived from work performed outside of Thailand, business conducted outside of Thailand, or property situated outside of Thailand) it will be taxed in Thailand only if: i. an individual is a Thai tax resident; and ii. such individual brings such income into Thailand in the same calendar year that he receives it."
From this article
frederic.scheffer
2020-07-31 01:48
"From the above rules, for instance, if a Thai tax resident receives foreign sourced income overseas on 31 December 2015, and deposits it in his foreign bank account, and then transfers it to his Thai bank account the next day (1 January 2016, the calendar year after that in which he received the income), the income would not be taxed in Thailand."
buynps.org
2020-07-31 03:25
@frederic.scheffer hmm i hear you - how do we get around this?
> income derived from work performed outside of Thailand
buynps.org
2020-07-31 03:25
> If such income is considered foreign sourced income (income derived from work performed outside of Thailand
buynps.org
2020-07-31 03:25
I will confirm all with the lawyer as well, great questions
frederic.scheffer
2020-07-31 03:28
Yeah so the idea is probably to spend only 2 or 3 months a year in Thailand (not working, enjoying the foreign income you made). And the rest of the year out of Thailand working (making money)
frederic.scheffer
2020-07-31 03:28
You can ask them about this
buynps.org
2020-07-31 03:36
hmm yes
koshis
2020-07-31 10:15
Hey @frederic.scheffer @brendan did you guys have any success ? Also in similar situation
frederic.scheffer
2020-07-31 12:36
Nope. Im going to contact larger lawyer/audit firms soon and ask
buynps.org
2020-08-03 04:19
@frederic.scheffer just finished talking to him. I don?t know if he knows what he is talking about.
buynps.org
2020-08-03 04:20
> 1- Best practice for keeping tax residence in Thailand with only spending 2 or 3 months a year in Thailand and the rest in other countries (without exceeding 183 days in 1 country) ? Goal = not get tax on foreign income when you remit it 1 year later.
You have to spent 183 days or more to keep Thailand tax residency
> 2- How to fill the tax report to remit this money 1 year later ?
He was saying not to worry about this stuff, that practically they don?t have enforcement capability..
> 3- How to remit the money in practice ? Say you want to remit 300 000 USD. That would probably trigger warnings if they arrive in Bangkok Bank or any Thai account. What would be a good way? Or maybe just remit it in your home country but then, which Thai documents do you use to make sure you prove your home country that no tax is due on these moneyz? That?s an important one as it is the main goal of this whole thai residence if you want to take advantage of the foreign income not taxed if remitted the year after.
He said to send it to your own personal account first offshore then to your Thailand so Thai can?t see it as income? (don?t take this as tax advice lol)
> 4- How to prove that there is no Permanent Establishment in Thailand, if you are ever asked in the future by the Thai government ? Need solid defense ready in advance
He told me not to worry about this again
buynps.org
2020-08-03 04:22
again, i don?t recommend following that advice he give.. please don?t take it as tax advice
buynps.org
2020-08-03 04:22
It sounds like from his point of view, that Thailand doesn?t care at all
buynps.org
2020-08-03 04:22
I would look for another tax lawyer and get proper answers
buynps.org
2020-08-03 04:36
this article seems more helpful
buynps.org
2020-08-03 04:36
Residence rules
*For the purposes of taxation, how is an individual defined as a resident of Thailand?*
A resident is defined as a person present in Thailand for an aggregate of 180 days or more in any given tax year.
*Is there, a de minimus number of days rule when it comes to residency start and end date? For example, a taxpayer can?t come back to the host country/territory for more than 10 days after their assignment is over and they repatriate.*
No.
*What if the assignee enters the country/territory before their assignment begins?*
Provided assignees have not commenced work in Thailand, there should be no tax and immigration issues.
buynps.org
2020-08-03 04:37
Salary earned from working abroad
*Is salary earned from working abroad taxed in Thailand? If so, how?*
Salaries receive from employment exercises outside of Thailand are exempt from Thai tax, if not paid in or remitted into Thailand within the same calendar year it is received and provided the cost is not recharged into Thailand.
frederic.scheffer
2020-08-03 04:47
@buynps.org yes, typical Thai lawyer who just tells you no to worry. And then... when you need to prove that you paid taxes properly to Thailand or your own country, you will maybe have problems.
Not professional.
frederic.scheffer
2020-08-03 04:48
A lot of experts just speaking without knowing and without experience.
buynps.org
2020-08-03 04:52
@frederic.scheffer yeah, dang. have you spoke with a few thai lawyers??
buynps.org
2020-08-03 04:52
I feel like i just wasted my money on this guy
buynps.org
2020-08-03 04:52
he didn?t even clarify what was local vs foreign sourced
frederic.scheffer
2020-08-03 05:08
I have. Utterly incompetent, it's scary.
frederic.scheffer
2020-08-03 05:08
You can see they have no idea what they are talking about.
frederic.scheffer
2020-08-03 05:09
Thats why I will just deal with Mazars/KPMG/etc.
buynps.org
2020-08-03 06:04
yeah, wow
buynps.org
2020-08-03 06:04
did you ever talk to mazars/kpmg?
frederic.scheffer
2020-08-03 06:05
Not for Thailand
redareda9
2020-08-05 02:17
Haha thai style : ?Chill Bro, Thailand is easy country, land of smiles, just no worry?.
redareda9
2020-08-05 02:20
@buynps.org ?You have to spent 183 days or more to keep Thailand tax residency?
Not really, you just have to do it once. After that, the next years, you just have to make sure you don?t qualify as tax resident somewhere else.
bountybairn
2020-08-05 09:07
Meeting with a local Cypriot specialist about me moving to Cyprus and how to manage my affairs with UK limited, Wyoming LLC whilst living in Cyprus and managing my businesses which will generate passive and active income from Cyprus. Will post any broader messages etc here
marziovit
2020-08-05 09:10
Are you going to register the limited with the Cyprus tax authorities? If yes keep us updated on costs and requirements. Thanks
marziovit
2020-08-05 12:54
@simon if you use an Estonian OU as a parent company that receives dividends from subsidiaries you don't need to register for VAT and do any accounting, right? You only need to file an annual return and that's it.
simon
2020-08-05 13:11
@marziovit Correct. An Estonian OU used as a holding company is a very low maintenance structure.
marziovit
2020-08-05 13:22
@simon You still only need to file an annual return even if you pay yourself a salary?
simon
2020-08-05 13:26
Yes, unless you are an Estonian resident (in which case you need to file monthly returns / remit tax and social charges).
buynps.org
2020-08-05 13:27
@redareda9 sounds about right :stuck_out_tongue: :stuck_out_tongue:
buynps.org
2020-08-05 13:27
What do you mean you just have to do it once?
marziovit
2020-08-05 13:29
@simon one final thing. If you use the OU as a partner in a LLP and you sell through the LLP, all the income that will flow to the OU will be subject to 20% tax upon dividends distribution, correct?
simon
2020-08-05 14:01
All LLP profits attributed to the Estonian OU will be.
simon
2020-08-05 14:01
Although you can pay yourself a salary to avoid the distribution tax.
redareda9
2020-08-05 14:49
Being qualified as tax resident in Thailand
redareda9
2020-08-05 14:50
Once you get it, it becomes your residence ?by default? unless you qualify for a new residency
redareda9
2020-08-05 14:51
So it means that you don?t have to spend 183 days every year, only the first year, if I?m not mistaken
buynps.org
2020-08-05 14:54
i see, from what i understand it?s on a per year basis
buynps.org
2020-08-05 14:54
maybe the second year you?ll become a perpetual traveler?
redareda9
2020-08-05 15:25
Yeah you?d keep your last residency historically
redareda9
2020-08-05 15:26
I don?t see a reason to be qualified as a tax resident based on your residency
redareda9
2020-08-05 15:26
citizenship*
bountybairn
2020-08-05 22:04
@marziovit No idea yet, these are running businesses and I am relocating to will see what advice the this specialist gives but I'll ask about the costs of a local company if its not already covered in 'the plan'
benjamin
2020-08-06 03:06
I'd be very careful with thinking you can just qualify 1 year then automatically qualify every year after that. Better to stick to the 180 days a year in case of an audit by your citizenship country.
frederic.scheffer
2020-08-06 03:07
Yes this makes sense.
buynps.org
2020-08-06 03:25
yes agreed to the above as well
marziovit
2020-08-06 16:00
Question about accounting in UK for a LTD branch: If open a LTD in UK, become a non resident director, move to a country of my interested and setup a branch using the branch exemption regime, which documents do i need to file in UK if i don't trade in UK and i don't transfer any profit there?
simon
2020-08-06 18:31
@marziovit Dormant accounts and a confirmation statement, assuming you have been approved by HMRC for an exemption from corporation tax.
marziovit
2020-08-06 19:00
Why wouldn't HMRC approve an exemption from corporate tax?
simon
2020-08-06 20:32
@marziovit If you cannot prove that the company is paying tax in a treaty country
marziovit
2020-08-06 20:51
@simon i'm torn between using UK LTD or Estonian OU to establish a branch in a high tax country, what would be your choice? I would chose LTD for the prestige but i have the feeling that is simpler to deal with OU accounting.
simon
2020-08-06 20:56
@marziovit I?d definitely go with the LTD. Once you are approved for the exemption, you do not have to deal with HMRC ever again (as long as your situation doesn?t change).
marziovit
2020-08-06 21:00
@simon the problem is that i could need a whitelabel supplement company to dropship for me and they are from UK, this would certainly trigger something in Uk, right?
simon
2020-08-06 21:06
If they are an independent agent, no.
marziovit
2020-08-07 12:38
The only thing that would trigger UK corporate tax is if i have UK customers, correct?
simon
2020-08-07 14:02
No, it?s if you work in the UK or have operations there (under your control).
simon
2020-08-07 14:02
Having UK customers does not create a UK tax liability.
marziovit
2020-08-07 14:43
Wait, you lost me. Are you telling me that If i' sell to uk customers invoicing from the LTD branch located in another country, i don't have to pay any corporate tax in UK?
buynps.org
2020-08-07 15:01
@simon that?s for a UK LLP with no ECI? Or UK LTD as well?
simon
2020-08-07 15:08
You pay tax where you run the company / perform work, not where it is registered. Where your clients are located has no impact on this.
simon
2020-08-07 15:09
@buynps.org both, although with an LTD you?ll usually have to apply for treaty non-resident status with HMRC while with the LLP it?s automatic.
buynps.org
2020-08-07 15:15
@simon right, so for example if you have a Canadian corporation, the permanent establishment rules would force you to pay tax first in Canada on the corporate level, right?
marziovit
2020-08-07 15:16
@simon since the company will be run in another country does it make any difference if i register a branch selecting the the branch exemption option without applying for the treaty non-residence status or do i have to also apply for the treaty non-resident status with HRMC?
simon
2020-08-07 15:38
@buynps.org If you have a UK LTD but run it from Canada (no UK operations), you?ll pay Canadian corporation tax (not UK corporation tax).
simon
2020-08-07 15:43
@marziovit You should apply for treaty non-resident status (not the branch exemption) as you have no UK operations (as a treaty non-resident, you?ll be exempt from all HMRC filings). The branch exemption would be your best option if you had both UK operations and foreign operations (and you wanted to exempt your foreign operations).
buynps.org
2020-08-07 15:43
@simon ah ok, makes sense. what if you run a Canada corporation from Cayman islands (and have no presence in Canada)?
simon
2020-08-07 15:45
@buynps.org Similar (as per the tax treaty) but not an ideal setup due to the resident director requirement in Canada.
marziovit
2020-08-07 15:45
If you are resident in Cayman the best thing for you would be to use a partnership probably.
marziovit
2020-08-07 15:48
@simon I presume having UK customers or independent agents is outside of what's considered "UK operations"?
marziovit
2020-08-07 15:51
Can i still have a bank account in UK? PayPal UK? Stripe UK or do i need to open a bank, PayPal and Stripe in the treaty country?
simon
2020-08-07 15:53
Correct.
You can use UK banking, although you should bank in EUR / USD (it?s not necessarily a problem to use GBP but it?s better to avoid it).
buynps.org
2020-08-07 15:56
@simon interesting, I thought the corporate level would get hit with a tax first if there is no tax treaty? Like if you ran a USA C-Corp from a non-treaty country?
buynps.org
2020-08-07 15:56
Make $1M profit -> Pay tax on the corp level -> Pay out the dividends after tax -> Pay tax again on personal level (if any)?
simon
2020-08-07 16:05
@buynps.org There are tax treaties between nearly all major countries.
And yes, in the example above you?d pay Canadian corporation tax and then personal tax on whatever you distribute to yourself.
buynps.org
2020-08-07 16:07
@simon ok, thanks, yeah that makes a lot of sense
marziovit
2020-08-07 18:23
@simon can i send you an email asking more questions on the treaty non resident status? I could need your help with registering such a LTD in near future.
simon
2020-08-07 18:34
My email is
frederic.scheffer
2020-08-08 05:54
@simon a UK LLP needs to be a resident somewhere ? And if thats the case, and for a e-com business that would be the place from which the Director runs the business?
Same question for a HK LTD claiming offshore status:it needs to be resident somewhere? And if thats the case, and for a e-com business that would be the place from which the Director runs the business?
Thanks
buynps.org
2020-08-08 05:59
@frederic.scheffer do you mean if you are a perpetual traveler and running a UK LLP/
buynps.org
2020-08-08 05:59
?
frederic.scheffer
2020-08-08 06:08
I want to understand the rules in theory, and in practice.
I don't think perpetual traveler works as an answer if your home country or the country where the company is incorporated asks you questions.
I would like to find some solid solutions
simon
2020-08-08 08:48
@frederic.scheffer Technically speaking, a HK company claiming offshore status should be resident somewhere else (which makes sense, as claiming offshore status does imply that its run from somewhere else).
In the case of transparent entities (LLP, LLC, LP), there is no tax residency issues for the company itself, as it does not exist for tax purposes.
You are right that tax-free perpetual travel, in theory, shouldn?t be possible. In practice, however, it is because many countries (especially the territorial taxation ones) don?t care about compliance outside of their borders. If you are a Malaysian tax resident, for example, but work only while outside of Malaysia, you will not have to pay any taxes there and Malaysia won?t care if you paid taxes abroad on your foreign sourced income as it?s not their problem.
redareda9
2020-08-08 11:04
@simon I think what @frederic.scheffer means is, coming both from France, we know that France can qualify someone as French tax resident if there is no substance somewhere else. Even if we spent a lot of time somewhere else with no active assets in Franc e. Correct me if I?m wrong.
frederic.scheffer
2020-08-08 11:44
@simon in the case of Malaysia/Japan (territorial taxation) and Thailand (foreign income not taxed if remitted the next fiscal year):
Do they really don't care ? I mean, they could try to requalify you as working in the country, to earn tax on your income and on your company.
If they do, what is the legal defense?
benjamin
2020-08-08 11:54
@frederic.scheffer i've never heard of anyone being challenged by Thailand and I think the other two are low risk. But you don't know what will happen in 5-10years.
So my understanding is that it would be best to make your company not make a profit by paying salaries to yourself while outside your tax home.
It's much easier to prove work performed outside the country with work contracts etc. Which removes risk on tax of that income. So making sure your company doesn't make a profit is also a good move, if possible.
Interested if anyone can poke holes in that set up though.
frederic.scheffer
2020-08-08 11:55
Well if you pay yourself a salary, you have personal income. In what country did you pay tax on that personal income? In what country have you done that work ?
Not sure
frederic.scheffer
2020-08-08 11:56
On the contrary I try not to pay myself a salary, in order to pay myself dividends later when I find a good solution.
Not sure if this is the best strategy but this way I am not sending myself any personal income
benjamin
2020-08-08 11:59
That's always the big question. I'm sure western countries would question that for sure. But being a tax resident of Thailand or Malaysia, I don't think they care what happens outside their border. Not yet anyway.
It's also a good option to have all profits going to a holding company (if you can afford to) that can be cashed out at a later date when living in a true tax haven or having a better non grey tax set up.
simon
2020-08-08 12:13
@frederic.scheffer You should not setup your tax residency in a country where you spend significant time in. You should setup your tax residency in a ?convenient? country (like Portugal, Malaysia etc) and spend most of your time traveling, staying in countries as a tourist. That?s the idea behind perpetual travel and the five flag theory.
simon
2020-08-08 12:14
If you spend significant amounts of time in Thailand and work from there, your income will be liable to tax there and your companies will likely be deemed to have PEs there.
frederic.scheffer
2020-08-08 12:15
@simon if my home country (France) asks where is my residence and I am not staying in any country for more than a few months, they might apply French residency maybe?
frederic.scheffer
2020-08-08 12:16
If I establish my tax residency in Thailand but only spend 3 months a year there, it will be hard to defend as a residence place to my home country maybe?
simon
2020-08-08 12:19
@frederic.scheffer If you are from a country that is likely to challenge a non-residency claim, it makes a lot of sense to setup your tax residency in a country that will deem you a tax resident even with minimal time spent in-country. Portugal is a good example as you can qualify (and get a tax residency certificate) based on having a ?permanent? home there even if you spend little to no time there. France is very unlikely to refuse a Portuguese tax residency certificate.
simon
2020-08-08 12:23
With that said, it?s probably very unlikely that France would go after you anyway. Tax agencies have very limited resources and usually only go after people that are easy targets or when they think the payout will be worth their time and efforts.
frederic.scheffer
2020-08-08 12:23
@simon so Portugal seems one of the best options for a French citizen, correct ?
What about Caymans? I would like to send myself substantial dividends in the next few years
simon
2020-08-08 12:27
Portugal is likely a better option, as it will not raise the red flags the Cayman islands would. Dividends received from foreign sources are usually exempt in Portugal. https://www.pwc.pt/pt/fiscalidade/2017/pwc-non-habitual-tax-residents.pdf
simon
2020-08-08 12:27
Another benefit is that you can literally just show up and register as a resident, as you are an EU citizen.
bountybairn
2020-08-08 15:26
So had a brief discussion with a tax adviser based here in Cyprus. The following are summary points relevant to me as UK citizen so always worth checking your own situation.
1. Residency is easy for me as currently EU and they are streamlining the 'MEU3' process to speed this up. You need to be local, and if you have the right docs you can get your residency card within an hour
2. My UK Ltd which pulls in around 160k from UK B2B work is able to pay dividends to me tax free for 17 years whilst I reside in Cyprus but non dom tax status
3. I will need to inform HMRC in order to keep clear that I am Resident elsewhere (forgot the form ref but meeting the guy in a few weeks when our new home will be ready) he said HMRC would indeed check entry to the UK to ensure I didnt go beyond 183 days in the UK
4. Setting up a Cypriot company is relatively easy, he quoted 1000 euros, which i thought was maybe a bit steep but I cannot read greek so an agent is my only option probably - will explore further when i am back in a few weeks
5. He suggested paying me a salary of around 19,000 eur a year to get access to the social security services such as health care which I am ok with (Tax free band is 19,500)`
6. Internet speeds are fine, report from Nomad Capitalist from couple years back suggested it was poor but I had good speeds on my devices, and there is fibre available though not across the whole island
7. Suggested it made no tax difference whether is paid fees between UK Ltd and a new Cypriot Company or just paid directly from the existing company
8. He wasnt immediately clear on position of the Wyoming LLC but said he would come back to me - i would think this would come into it as its disregarded on US side so just need to work our how Cyprus would class the distribution (Dividends are tax free by salary is not for Non Domiciled foreigners in Cyprus, so I think there may be potential for the LLC income to be treated more like a Salary than a Divided - no sure if @simon has any thoughts on this?
buynps.org
2020-08-08 16:42
> Foreign-source self-employment or sole trader income derived from an eligible occupation (see below), royalties, capital gains and investment or rental income will be exempt from Portuguese tax as long as they may be taxed in the source country either under a double taxation agreement or under the OECD model tax convention.? In addition, such income must not be deemed Portugal-sourced under applicable Portuguese law, and must not be sourced from a blacklisted tax haven.
@simon hmm it says `income will be exempt from Portuguese tax as long as they may be taxed in the source country either under a double taxation agreement` - does this mean Portugal would want to see you paid tax on this somewhere? What happens if you have a foreign owned US LLC in this case?
buynps.org
2020-08-08 16:52
```Other income
Foreign source dividends, interest, capital
gains and rental income, together with
self-employment and professional income
(in this case, only if derived from high value
added activities), can be exempt from PIT if:
The income can be liable to tax in the
country of source, according to the
applicable Tax Treaty or to the OECD Model
Tax Convention; and
? It is not deemed derived in Portugal; and
? It is not deemed obtained in a tax haven.```
> https://www2.deloitte.com/content/dam/Deloitte/pt/Documents/tax/NHR/EN-NHR-flyer-general2018.pdf
simon
2020-08-08 18:13
@buynps.org As long as the income isn?t derived in Portugal / black listed countries, it will be exempt. You do not have to pay tax in the source country (hence why they say ?may? instead of must).
marziovit
2020-08-09 13:06
@bountybairn how much he quoted for the management costs of the Cypriot company?
redareda9
2020-08-11 07:12
@benjamin Make sense but how your citizenship country could have any rights in claiming taxes if your last tax residency is Thailand for example. I know in theory a requalification could be possible but so far only USA and Eritrea can claim taxes based on your citizenship.
redareda9
2020-08-11 07:12
What would be interesting to see is a practical case of a ?perpetual traveler? being audited. So far we?re only talking about theory.
frederic.scheffer
2020-08-11 07:20
Yes all this is theory. The reality is that a 55 years old guy from France, working for the tax office might say that your residency does not have substance and therefore you are by default resident of France.
redareda9
2020-08-11 07:27
I?m just curious to know how it?d be enforced.
I know France defines what a tax resident is (owning assets OR family OR spending > 180 days) but I didn?t see them defining what a tax resident is NOT and how they would have rights on someone who doesn?t have substance elsewhere.
redareda9
2020-08-11 07:28
When I?m thinking about spending only 1 year in Thailand, you should still pay taxes to them and give yourself dividends/salary in your Thai bank account so it should be enough for it to be considered ?substantially enough?.
benjamin
2020-08-11 08:13
@redareda9 if you get challenged by your citizenship country as being a perpetual traveller and not having a true home, they will normally require a current tax residence certificate from Thailand.
To get this certificate in Thailand you need to prove you've been in the country for 180 days during the tax year.
Plus have other relevant documents.
I could be wrong, but you'd want this to come from the year in which they're challenging you which won't be possible if you haven't stayed 180 days that year.
Of course this is all theory, but better to stick to the letter of the law so there aren't any surprises in 5 years time if revenue departments go crazy or have more resources to chase people.
https://www.rd.go.th/publish/21978.0.html
redareda9
2020-08-11 08:19
@benjamin Yeah it makes sense. But it?s possible that your citizenship country won?t ask for a tax residency certificate but for a tax filing report (proof that you paid taxes in Thailand).
redareda9
2020-08-11 08:20
Otherwise it means that you must stay 183 days in a single country every year or you?re not legal
redareda9
2020-08-11 08:20
It doesn?t make sense
redareda9
2020-08-11 08:21
if I want to live 4 months per year in a country, 3 times per year. (so in 3 different countries), why would it be illegal.
benjamin
2020-08-11 08:21
@redareda9 that's possible. But having the tax filing report and residence certificate is a safer bet.
There are much better countries than Thailand for becoming a tax resident that doesn't require 183 days in the country.
benjamin
2020-08-11 08:23
Cyprus or Malaysia might be a better option in your situation as you can get by with 2 months in Cyprus. Or average of 3 months in Malaysia.
Then just treat Thailand like your playground. Not your tax home
elsamadrolle
2020-08-11 14:07
But my understanding of Portugal under NHR is that if you are a resident here you will struggle to deny that your effective place of management is here, thus the income will be deemed to be taxable in PT even if arriving from elsewhere. I was advised by a local accountant to just set up as self-employed and pay the 20%. I was also advised that anything above 250k globally declared, which you have to under NHR, you have to state your worldwide income, is almost 100% certain to be investigated. So the Portuguese scheme is attractive but difficult to qualify without substantial presence elsewhere and proving your effective place of management is not here, despite having a lease or owning a place (both needed to get NHrR)
elsamadrolle
2020-08-11 14:10
(When I say « here », I am currently in Portugal myself, weighing the pros and cons of residency. And I am French so close to the problem!)
buynps.org
2020-08-11 14:20
@elsamadrolle how about the ?Foreign source dividends?? if you open a company abroad and manage it from Portugal?
frederic.scheffer
2020-08-11 14:24
Good points. Makes sense and seems realistic.
Have you thought about staying in Portugal only about say 3 months a year and the rest in other countries?
From the point of view of tax office: other countries for work. Portugal for mini retirements. Im French too
frederic.scheffer
2020-08-11 14:25
That will fall under "managed from Portugal".
elsamadrolle
2020-08-11 14:34
I did.. I asked the accountant if I could deduct the days I was not in Portugal. He didn?t see to think that?s possible but it makes sense to me that it might be. I was also told that it?s very much up to the accountants I interpretation... so mine may be too conservative. Would like to stay on right side of the law though.
buynps.org
2020-08-11 14:38
@frederic.scheffer ok, i see. due to PE laws right?
> Under Portuguese tax law, any fixed place of business in Portugal through which the business of an enterprise is wholly or partly carried on is deemed to constitute a PE in Portugal.
elsamadrolle
2020-08-11 14:43
Having said that my accountant did say that depending on the type of income and services you offer as self-employed, some types can be totally exempt (they get creative) which can help lower the 20% to closer to 15%. The creativity varies year by year apparently because the laws change constantly.
simon
2020-08-11 15:12
I was told that it?s fairly easy to exempt foreign-sourced income, if it is well documented that the income arose outside of Portugal.
simon
2020-08-11 15:14
Yeah, place of management rules. You?d be able to exempt your dividends only if they were paid by a foreign entity managed / run from outside of Portugal.
elsamadrolle
2020-08-11 15:15
I?m a consultant working from home with clients outside the EU. Accountant is coming back to me with an estimate of what that would look like, he asked to see my exact contracts and list of services. I will report back to this thread when I hear back from him!
buynps.org
2020-08-11 15:26
Thanks for the share @elsamadrolle
bountybairn
2020-08-11 19:25
@marziovit I didnt catch this as ran out of time, i am planning to get fully set up there in a few weeks when i move so will share more info then
elsamadrolle
2020-08-12 14:30
Just found this article on Italy. There is 10% social security that applies to salary « under normal rules ».
https://taxing.it/extension-of-regime-for-impatriates-70-tax-relief/
tiagomdreganha
2020-08-12 16:32
Pugster is right, unless you have a business with solid substance outside of Portugal this isn't a good solution. I only know one guy doing the 0% tax on dividends right, he gets his dividends from UK entity with 2 other owners/directors (which are not Portuguese residents).
His lawyer at the time was adamant about having a majority of non-portuguese directors so they can't claim place of management. Solo-director of a foreign entity while living in Portugal doesn't fly AFAIK.
The thing with Portugal is that things can "slide", but they have at least 5 years to come back and inspect you and when they do it is fine after fine + interest on whatever they deem unpaid. (speaking from experience unfortunatly).
The problem with self-employed is that it's 20% flat rate income tax + 21.4% Social Security. But hey, better than being a local... I'm paying 35%+21.4% all the way up to 49%+21.4%
simon
2020-08-12 22:52
@elsamadrolle So I guess you?d have to pay 4.52% + 10% for a total of 14.52%? That?s not world beating but for a major western European country it?s pretty good! Obviously that is if you are a remote worker / freelancer. If you own businesses things could get complicated.
buynps.org
2020-08-12 23:55
@tiagomdreganha interesting, are you open to sharing what happened / how the exposure was?
> (speaking from experience unfortunatly).
simon
2020-08-13 00:19
@tiagomdreganha That?s mainly for people based in Portugal I guess? Most of the people I know who are registered as NHR spend 11+ months abroad (and have no economic / business connections to Portugal).
asarun72
2020-08-13 03:28
@simon if they spend 11 months a year abroad , they can?t claim Portugal tax residency right ?
asarun72
2020-08-13 03:28
@simonHow do they verify that ?
buynps.org
2020-08-13 03:34
@simon can you get a Portugal tax certificate if you are 11 months abroad? does that count with the NHR program?
marziovit
2020-08-13 06:05
I've sent you an email! :slightly_smiling_face:
simon
2020-08-13 09:35
You can qualify either based on time spent in the country or by having a home there (for example, renting an apartment).
https://taxsummaries.pwc.com/portugal/individual/residence
simon
2020-08-13 09:37
@asarun72 Random / targeted audits
tiagomdreganha
2020-08-13 10:52
@buynps.org mostly a lot of naive underinvoicing at my early years of self-employed where I didn't know what I as doing, so mostly unpaid VAT and personal income tax. I ended up paying the VAT, more than 20% in fines and 4% per year of interest which averaged out at 10%. Plus accountant + lawyer and my mental sanity.
tiagomdreganha
2020-08-13 10:54
This country may have a shitty gov / tax system but it's amazing to live. That's why I'm still paying a bucked load of taxes, idk if I'm ready to only spend 2-3 months out of the year here.
tiagomdreganha
2020-08-13 10:59
Correct @simon . I guess it would be easier to avoid "place of management" if you don't spend much time here, but I'd say you would still need a solid reason/substance to keep the company wherever it's registered at.
elsamadrolle
2020-08-13 11:12
Under NHR in Portugal you can avoid social charges as long as you pay into another social security system. I?m trying to figure out what that means exactly.
tiagomdreganha
2020-08-13 11:13
AFAIK that only works if you're coming from an EU country, you can choose to continue contributing there for a limited amount of time.
Btw self employed payments cap out at 1100?/month in Portugal, quite high but at least there's a cap. ( Your max monthly income considered for SS is around 5000? which @ 21.4% = +/- 1100? )
So the 20% flat rate + 1100?/month SS might actually be decent for high income self-employed people
elsamadrolle
2020-08-13 11:14
@simon yes for 5 years, then provided you bought something (even something small) you would get bumped up to 50% of salary taxed, + 10% for another 5 years. Unless you had a bunch of kids! :heart:
elsamadrolle
2020-08-13 11:14
Only in Italy...
elsamadrolle
2020-08-13 11:15
That?s where I was told the 250 threshold kicks in le they generally leave you alone up to 200k, you can start to worry once you get above 250 (but no guarantees either way)
bhugbhug
2020-08-13 14:08
So even if the self employment income is foreign sourced and work performed outside portugal (then tax exempt), you'll still owe 21.4% capped at 1100?/month under NHR? I guess there is no point pursuing this scheme if you are under 6 figures then
simon
2020-08-13 14:13
@tiagomdreganha Portugal has social security agreements with a number of non-EU countries, you can find the details here: https://www.pwc.pt/en/pwcinforfisco/tax-guide/2019/social-security.html
bobriakov.igor
2020-08-14 07:22
anyone with experience setting Wyoming LLC for non-US residents?
jase
2020-08-14 07:32
Yep I have done 3 this year
jase
2020-08-14 07:33
Wyoming Agents + Traveling Mailbox + hello fax for EIN + Mercury bank
jase
2020-08-14 07:34
First one you do takes about a month due to EIN
mb
2020-08-14 07:43
@jase Any experience with filling the 5472 form? Is it easy to fill in from your experience? (https://onlinetaxman.com/who-must-file-irs-form-5472/)
jase
2020-08-14 07:44
Haven't done that yet @mb, @simon gave me the heads up on it though, all seems quite straightforward
mb
2020-08-14 07:45
Btw, for anyone interested, you can setup a LLC as part of a 'Series LLC': https://otoco.otonomos.com/ using an Ethereum wallet. I guess the only benefit I see is saving on registered agent costs. I think they just opened the Wyoming LLC too (aside from Delaware):
https://otoco.io/
marziovit
2020-08-14 07:46
@jase are you using Stripe? or PayPal?
jase
2020-08-14 07:52
Stripe @marziovit
marziovit
2020-08-14 07:54
I'm asking because i read this comment from Simon and basically abandoned the idea of using an LLC
jase
2020-08-14 07:56
I think he's talking about Stripe Atlas.
jase
2020-08-14 07:56
They no longer register US LLCs for non-residents.
jase
2020-08-14 07:56
They will register a C-Corp for a non resident
jase
2020-08-14 07:56
but they are tax inefficient for non residents
jase
2020-08-14 07:56
So you need to do the "hard work" yourself (or pay someone else)
marziovit
2020-08-14 07:57
Ok so i totally misunderstood the comment. I thought that Stripe was not registering anymore LLC owned by non residents
jase
2020-08-14 07:58
Yeah there's some subtleties in there
bobriakov.igor
2020-08-14 07:59
@jase thank you for answer. Are there any particular hints to do in order to get highest possible privacy with this setup?
jase
2020-08-14 08:01
I'm not concerned about privacy myself, so I can't help you there sorry.
bobriakov.igor
2020-08-14 08:01
got you. Thanks anyway
marziovit
2020-08-14 08:04
@jase Are there any particular requirements to open a stripe account for non-us residents?
mb
2020-08-14 08:20
From what I know, Stripe Atlas has been registering C-Corp LLCs since start? E.g. those were never the 'single member' type of LLCs AFAIK.
mb
2020-08-14 08:24
I might be wrong, just that's what I remember from reading the multiple references on Hacker news (Y combinator).
simon
2020-08-14 08:30
@mb They did register single-member LLCs (disregarded) for a little while. I?m not sure why they stopped offering them.
As for the blockchain LLCs Otonomos sells, they are not ?regular? LLCs, registered with the secretary of state. They may work in some circumstances but aren?t a workable substitute for most businesses at the moment. I had lunch with the guy behind Otonomos a few years ago in Singapore, it?s quite interesting what they are planning to do with the blockchain.
mb
2020-08-14 08:40
Ah with Han?
mb
2020-08-14 08:44
Happened to chat with him couple of weeks ago, didn't know we could speak the same language, just mid way conversation (Dutch / Flemish). My understanding was, that essentially the 'child' LLC of the 'master' series LLC works as a regular LLC and has its own responsibilities. I did read something about not all states recognising the 'Series LLC'. But you're saying this is not ideal nonetheless?
The primary reason I found it interesting was to either use such an entity for crypto only payments (e.g. no bank needed) or to see if it could be part of a DAO (but still very experimental - see the BBLLC Vermont https://www.gravelshea.com/2019/06/dorg-launches-first-limited-liability-dao/)
But the required form 5472 form (and it's potential penalties) put me of a bit on that.
simon
2020-08-14 08:44
@mb Yes
mb
2020-08-14 08:45
And basically anything crypto/US related, which I just don't have the time/funds to fully investigate potential liabilities/
simon
2020-08-14 08:45
That is indeed the main use for such entities at the moment, if you need a bank account, Stripe etc or if you want to shelter assets you will be better off with a ?normal? LLC.
mb
2020-08-14 08:46
Yeah, I'm on the same line of thought. Especially because of the low cost of a Wyoming LLC, no need to expose yourself to an experimental (that's how I see it atm) series LLC.
mb
2020-08-14 08:47
Nonetheless I did find it interesting you could register an LLC with your wallet address :slightly_smiling_face:
mb
2020-08-14 08:47
And if you ask me, that's only the beginning.
simon
2020-08-14 08:49
Yeah definitely, but unfortunately things move slowly when government is involved so it may take a while yet before we can reap the benefits from such new technologies. Same as with central bank digital currencies, many countries are looking to introduce them but I personally doubt they will become mainstream for a while yet.
mb
2020-08-14 08:52
Agreed. I think at most what can be done, assuming you're strictly dealing with crypto, is that you have these sort of decentralised entities (without a legal 'real world' wrapper). As things are right now, as I understand from the lawyer at the company I work for, a DAO is nothing more than an informal association, without it being a legal separate entity. That's what OpenLaw is trying to achieve I guess: https://medium.com/@OpenLawOfficial/the-era-of-legally-compliant-daos-491edf88fed0
elsamadrolle
2020-08-14 09:23
Actually it depends on what category of self-employment you fall under in Italy. Unfortunately in my case (IT consultant prob closest to what I do).. 25% social charges. I would fall under (as several professions do) ?gestione separate? of the general INPS scheme. Employees get hit with 10% because their employers cover an even bigger contribution, so self-employed have to make up for that.
https://taxing.it/italian-social-security-rates-inps-gestione-separata-2020/
clr
2020-08-14 10:24
Another use I find interesting for the blockchain Series LLC is to hold domain names for small projects where there is not much at stake.
pragmatic
2020-08-14 11:24
Can't you apply for an EIN online? I think I did that for my C-corp a couple years back
pragmatic
2020-08-14 11:24
Also Travelling Mailbox vs Anytime Mailbox? @simon seems to recommend Anytime on this website
jase
2020-08-14 11:35
Splitting hairs I assume. EIN only if you are American or already have an EIN
simon
2020-08-14 11:51
You need an SSN / ITIN to apply for an EIN online
simon
2020-08-14 11:52
I do not have experience with Travelling Mailbox, I have been using Anytime Mailbox for a few years and am very happy with the service
mb
2020-08-15 07:09
@clr because of the low cost / simplicity of the setup or?
clr
2020-08-15 10:58
Yes, mostly because of that and because, after all, the ICANN or national registry WHOIS requires data of the entity that holds the domain name and maybe you don?t want to use your personal name and address. So you could set up ?burner? companies for each domain name you purchase. Of course, one could always use fake data for the WHOIS but, if caught, they could take the domain away from you. Whereas with this setup, it would be more difficult to legally challenge.
clr
2020-08-15 11:01
If the domain registration and hosting are both paid with crypto, the only link with the ?meatspace? for which you need a legal identity is the WHOIS data.
pragmatic
2020-08-16 07:55
@mb Huh the Vermont BBLLC sounds really interesting. How does one actually register that? So Vermont passed laws that allows on-chain governance, ownership etc of an LLC? Aren't there tax implications of receiving tokens, which are in that case shares of a registered LLC?
kareem.elharony
2020-08-16 21:11
Hi All,
I'm Egyptian living in Saudi Arabia ( No income taxes ) and doing online business in middle east ( All my transactions comes from Saudi Arabia | UAE for the time being )..I want to have US account to use for payment of suppliers and future extension using stripe or any other payment processors in my shopify website.
I can see that forming LLC in US is good solution for me..if i will get bank account and accepted by payment processors etc.
What's the taxation scenario in this case ? Should i file 5472 form ? 1040NR ? Or nothing at all ?
simon
2020-08-16 21:14
@kareem.elharony There will be no US taxation as long as no work is performed in the US. You?ll have to file form 5472 every year, and a blank 1020.
kareem.elharony
2020-08-16 21:14
Thanks @simon :slightly_smiling_face:
kareem.elharony
2020-08-16 21:15
Can i file them on my own or i need some agent ?
simon
2020-08-16 21:17
You can file them on your own, although I recommend using an agent for the first year for form 5472 to make sure it?s filed correctly.
simon
2020-08-16 21:18
You can use my LLC registration service, if you want, as I handle the filing for form 5472 as part of it.
kareem.elharony
2020-08-16 21:19
OK , Sure it would be better.
alex720
2020-08-16 21:20
Realistically how easy is it to achieve 0% tax with a Singapore company?
kareem.elharony
2020-08-16 21:20
Are you going to offer physical address as well as EIN in this package
alex720
2020-08-16 21:21
If you have no customers and no employees in Singapore, is the tax 0% if the company uses say TransferWise as its bank account?
alex720
2020-08-16 21:21
Because afaik TransferWise isn?t in Singapore, and only money remitted to Singapore is Singapore sourced afaik.
Process payment on PayPal -> withdraw to TransferWise -> send to traditional bank account outside of Singapore for safekeeping
alex720
2020-08-16 21:22
Not sure if my understanding is correct
simon
2020-08-16 21:24
@kareem.elharony Yes, a local address is included (and you can receive mail there).
simon
2020-08-16 21:25
@alex720 Do you plan to use TransferWise?s SGD banking details? If so, that is likely to trigger the remittance rules as the account is held at DBS.
alex720
2020-08-16 21:25
No just the usd
alex720
2020-08-16 21:25
Then send to personal account as dividend or another bank outside Singapore, for safekeeping
simon
2020-08-16 21:28
You should be fine then, if all business activities took place outside Singapore, and no funds were ever remitted.
alex720
2020-08-16 21:28
Do you know of anyone using a similar setup
alex720
2020-08-16 21:28
Seems ideal
simon
2020-08-16 21:28
It would be simpler to use a HK company, however, as there is no remittance rules.
alex720
2020-08-16 21:28
PayPal has 2.5% withdrawal fee for Hong Kong
alex720
2020-08-16 21:28
For usd
alex720
2020-08-16 21:29
Pretty significant since most suppliers want to be paid by bank transfers , won?t accept PayPal
alex720
2020-08-16 21:29
And profit margin isn?t huge
simon
2020-08-16 21:31
You could setup a payment processing subsidiary, on top of a holding company (either in HK or elsewhere). For example, a UK LLP (lower processing rates with Stripe, PayPal with USD support etc) with a HK company (decent banking that you can access due to no remittance rules, no tax on foreign source income).
simon
2020-08-16 21:32
I don?t see the benefits of Singapore if you can?t bank there and make use of their tax system.
alex720
2020-08-16 21:32
OK
alex720
2020-08-16 21:33
Thanks
simon
2020-08-16 21:34
If you get an ITIN, you can use a US LLC instead of an LLP. This gives you near complete privacy.
alex720
2020-08-16 21:35
Unfortunately we would risk having effectively connected income with a us llc
alex720
2020-08-16 21:35
Since we hire some programmers in USA
alex720
2020-08-16 21:35
And have our hosting there for some websites , and 70% of customers are American
alex720
2020-08-16 21:35
Doesn?t seem worth the risk
simon
2020-08-16 21:46
You could use a BC LLP, same tax benefits as a UK LLP but with fewer yearly filings and more privacy. You can link a USD bank account to PayPal Canada, and to Stripe Canada.
ggiampieri
2020-08-16 22:34
Does Stripe Canada support EUR payouts?
simon
2020-08-16 22:35
@ggiampieri Only CAD and USD.
ggiampieri
2020-08-16 22:36
Thanks @simon then only alternative is UK LLP
simon
2020-08-16 22:37
For EUR, yes. And obviously companies setup in Eurozone countries.
ggiampieri
2020-08-16 22:41
One way or another every one tries to cut off that 2% the Queen always gets it right
simon
2020-08-16 22:45
You are lucky if PayPal only takes a 2% cut :stuck_out_tongue_winking_eye:
benjamin
2020-08-17 05:53
First time I've seen a company say you can be a Thai tax resident without the 180 day stay. Not sure if they're correct, but maybe worth talking to them if your visa allows you to work in Thailand and you're wanting to stay less than 180 days.
https://sherrings.com/personal-income-tax-in-thailand.html
frederic.scheffer
2020-08-17 06:06
@benjamin they also did not mention that foreign income will not be taxed in Thailand if an individual brings such income into Thailand in the next calendar year that he receives it.
Their text is not written in a very logical way as well.
frederic.scheffer
2020-08-17 06:07
@benjamin I have a call with KPMG today and more next days (PwC, EY, and some Thai law firms). Will keep u updated
benjamin
2020-08-17 06:11
@frederic.scheffer I noticed that as well. I wouldn't trust the article without some type of proof of those claims.
What questions are you hoping to get answered from those firms?
frederic.scheffer
2020-08-17 06:14
How to distribute dividends to myself, while staying legal in regards of my passport country France, of my current residence country Thailand and also Hong Kong where my holding company is. While trying to not pay tax on these, using Thai law
benjamin
2020-08-17 06:19
@frederic.scheffer Nice. Let me know how it goes
mb
2020-08-17 07:02
From your experience, do they ever enforce accuracy of WHOIS data? Other than e-mail address that is.
tatelev
2020-08-17 08:46
hi, I am trying to research the subject of ?State Income Tax? for foreign owned US LLC?s
tatelev
2020-08-17 08:46
Since many years I have accepted that my foreign owned US LLC is exempt from FEDERAL income tax (IRS), and used the famous lawyer Stewart Patton?s rationale for this (https://ustax.bz/non-us-entrepreneurs/)
tatelev
2020-08-17 08:47
But what happens with each STATE?s Income taxation for a foreign owned US LLC?
tatelev
2020-08-17 08:48
(I am asuming that these State Income Taxes are NOT what is refered to commmonly as Sales Tax. Please correct me if I am wrong)
simon
2020-08-17 09:13
@tatelev Usually, you won?t have to pay state income tax if you run the business from abroad (although you may still have to pay franchise tax etc).
ggiampieri
2020-08-17 09:14
@simon 2% on top of 3.5% same applies with Stripe for currency exchanges. 5.5% makes no sense (trying to fix it) as its probably close to the cost of the single product :face_with_rolling_eyes:
tatelev
2020-08-17 09:25
thanks @simon do you happen to know any texts/articles that ellaborate on this? The ones I had as ?bible? to base my exemption from IRS Federal Tax are not clear on this
tatelev
2020-08-17 09:26
also since my business is mainly Amazon FBA, I am specifically looking to find out how the concept of Nexus plays out if at all
simon
2020-08-17 09:38
You?ll have to look at each state individually. For example, here are California?s rules (see Doing business in California): https://www.ftb.ca.gov/forms/misc/3556.html
tatelev
2020-08-17 09:51
thanks @simon just read this document for California and unfortunately there is no mention to a US LLC owned by a a foreigner, so I?m still lost
simon
2020-08-17 10:03
If you are doing business in California, you must file a California return and if you aren?t, you don?t have to file. The link above shows what doing business in California means.
tatelev
2020-08-17 11:23
??An LLC is ?doing business? if any of the LLC?s members, managers, or other agents performs activities in California on behalf of the LLC?. I am not sure if Amazon fulfilling my orders for me from a fulfillment center located in California would be included in this definition. I am also not sure if me paying a third party warehouse located in California to store my products is included in that definition
tatelev
2020-08-17 11:24
possibly a tricky domain. If anybody has legal clarification on this or has found content clarifying this subject, please share
simon
2020-08-17 11:26
No, as they are not dependent agents.
tatelev
2020-08-17 12:01
Thanks, but not fully convinced yet. Would like to read more opinions/texts confirming this. Might drop Stewart Patton a line to see if he can clarify if his article about ETBUS, etc is also applicable to states franchise tax
simon
2020-08-17 12:34
You can ask the state tax authorities directly, if you want confirmation.
simon
2020-08-17 12:36
You can also give the small business line at the IRS a call, they are usually helpful.
jase
2020-08-17 15:23
Is it possible have a foreign address on an ITIN?
jase
2020-08-17 15:23
Or a foreign or local address preferable?
simon
2020-08-17 15:35
Yes, you can use a foreign address but if you plan to use the ITIN to build US credit it?s better if you use a US address (as the address will be listed on your ITIN letter).
jase
2020-08-17 15:36
Noted, thanks @simon
buynps.org
2020-08-17 16:06
@frederic.scheffer @benjamin they mention that for locals working in thailand? i think for tax purposes that would be auto-taxed because it?s local income
buynps.org
2020-08-17 16:06
if they go there to work
buynps.org
2020-08-17 16:07
@frederic.scheffer interested to hear about your call with KPMG and others!
replay
2020-08-18 16:10
Hi. I have a situation for which I couldn't find any good information online:
I'm tax resident in Paraguay (and I'm physically working from here) as a contractor for a company in New York. Now this company has granted me a bunch of stock options and is probably going to go public eventually. I'm pretty sure that in Paraguay I'll not have to pay any taxes when that company goes public and I start exercising my options and selling the resulting shares as long as I never send any money into Paraguay, but I'm not sure if there's any US tax which I'll have to pay in that situation. I'm US NRA (nationality & citizenship is Switzerland, working and living exclusively in Paraguay).
alex720
2020-08-18 16:43
Anyone here have experience obtaining a transfer pricing study in USA to use a USA company to process payments for an offshore company?
alex720
2020-08-18 16:44
Transparent llc is not an option because we would likely have effectively connected income
buynps.org
2020-08-18 17:02
@alex720 i almost had one done,
buynps.org
2020-08-18 17:02
what is your desired goal?
alex720
2020-08-18 17:04
I want to use a USA company to process payments from customers for a small fee, then send most of the revenue to an offshore/zero tax company who will pay all business expenses and end up with most of the profit. @buynps.org
buynps.org
2020-08-18 17:42
@alex720 where is the business managed from? why do you want ECI?
alex720
2020-08-18 17:56
panama, no tax on panama side I already confirmed with accountant
70% of our customers are in USA, we have two programmers in USA who only work for us (so debatable if they are contractor), some of our hosting is in USA
I was told it is not advisable to use a transparent llc when there is a high risk that it would have eci and thus be taxed as a us company
buynps.org
2020-08-18 18:25
@alex720 what % do you see yourself transferring out of the USA company with the transfer pricing study? did you look around for more info yet?
alex720
2020-08-18 18:30
Not yet
alex720
2020-08-18 18:30
no idea what is the norm for this type of arrangement
michal.opoka
2020-08-18 22:15
@alex720 Check this, https://ustax.bz/non-us-entrepreneurs/ I don't think you have any US tax liability as long as your programmers are not employees/dependent agents, maybe you could get a ruling from IRS
buynps.org
2020-08-19 00:56
@alex720 yeah, i think there?s a lot of room for play - maybe talk to stewart patton?
alex720
2020-08-19 01:13
Thanks guys
michal.opoka
2020-08-19 01:28
I also suggest talking to Steward, or any other experienced US tax attorney, transfer pricing is a complex subject, not an easy solution
tatelev
2020-08-20 13:33
@simon the small business line at IRS? I have had to call for different reasons to IRS and they are a disaster, usually it is old ladies with bad temper and no knowledge at all, a waste of time and energy, and they give bs advice and replies. Maybe I am always calling the wrong place?
tatelev
2020-08-20 13:33
what is that IRS small business line phone number?
simon
2020-08-20 13:43
The number is , you can call free of charge using Skype. If you get one of the unhelpful old ladies, ask for a supervisor.
asarun72
2020-08-20 17:01
For proprietary and tech related TRademarks it?s quite difficult to go after transfer pricing. For physical products or common device related it?s not easy
asarun72
2020-08-20 17:02
Google for example has put its ad business I believe in Netherlands and issues license to google Inc USA to run ads and takes big commission as royalty and moves billions offshore
buynps.org
2020-08-20 17:31
From what I spoke about TP, you can TP the management and IP.. where everything is being managed
buynps.org
2020-08-20 17:31
from this angle
buynps.org
2020-08-20 17:31
what do you think @asarun72
buynps.org
2020-08-20 17:31
?
asarun72
2020-08-20 17:32
It?s possible if you put in good work and set up . But if your business involves buying and selling products or selling consulting or IT works this may not work.
tatelev
2020-08-20 20:05
So far I have always been calling , which I was told that it was the ?International Business Unit? : but percentage of old ladies is too high. I?m not sure if it is in practice the same one as the one you mentioned. I?ll give it a try to see if it is any better
frederic.scheffer
2020-08-22 06:53
For ecommerce businesses selling to multiple european union countries without having a EU company. How do you deal with VAT? Have u setup a EU daughter company? Working with agents?
felix
2020-08-22 06:59
You can get an EIN without being an American. Did that last year successfully.
frederic.scheffer
2020-08-22 08:28
Thanks. Easy and working well?
marziovit
2020-08-22 08:39
@frederic.scheffer unfortunately i don't have direct experience with them
frederic.scheffer
2020-08-22 08:55
Anyone with direct experience with this? Using Shopify?
koshis
2020-08-22 11:35
Hey @simon
Just reading back through this thread on UK Ltd's.... If I setup a UK ltd, and then apply for Treaty Non Resident status, there won't be any tax obligations or filing obligations in the UK?
And I will be able to open and operate a UK bank account (multi currency)..
Do you know which banks will accept this setup? They don't have issues with the UK LTd being non-resident?
I'm assuming it will need a UK address and proof of such, for bank account opening.
simon
2020-08-22 12:53
HSBC accepts non-resident UK companies, I?m not aware of any other banks that do. You can also use TransferWise and similar services.
For the address, you can use the registered address. There is usually no need for a proof of address, although a personal proof of address may be needed.
koshis
2020-08-24 08:48
Thanks @simon great intel as always!
bountybairn
2020-08-24 12:58
Am I right in thinking that I can use my LLC for US customers and remain disregarded as long as the work is performed outside of the US?
simon
2020-08-24 13:17
@bountybairn Yes, what matters is where you work, not where your clients are located.
frederic.scheffer
2020-08-24 13:26
What about US Sales tax for ecommerce? If shipping from China or shipping from US warehouse?
frederic.scheffer
2020-08-24 13:26
That could get someone with a LLC doing dropshipping / ecommerce with US customers in trouble if taxes not paid accordingly in each states, no?
simon
2020-08-24 13:29
@frederic.scheffer Some states require that you register for sales tax once you?ve reached a certain annual threshold. For example, 500000$ in California.
simon
2020-08-24 13:30
Where your company is registered doesn?t usually matter for sales tax purposes (you?ll have to register even if your company is non-US).
felix
2020-08-24 14:43
Thank you for sharing your insights, Simon. We are considering to convert our Single-member LLC in Wyoming with a foreign shareholder to a Multi-member LLC with two foreign shareholder (which are corporations). I read that the LLC will be automatically taxed as a partnership and is not a disregarded entity anymore. Does anyone knows if we are liable to withholding tax or general corporate tax? The work is still performed exclusively outside of the US in the same way as we did it with the SMLLC, but the shareholder/member structure will change.
simon
2020-08-24 14:54
@felix A US partnership with no US resident partners only has to withhold US tax on ECI. No ECI = no US tax liability.
yuli
2020-08-24 18:16
Once can argue quite easily, though, that an eCommerce activity (For example, selling on http://Amazon.com) is ECI, no?
100% of customers - in the USA.
100% of inventory - in the USA.
100% of marketing - in the USA.
Only the actual owner/employees is outsides
I consulted with approx. 10 lawyers about it, and only Stewart: https://ustax.bz/non-us-entrepreneurs/ claimed that it doesn't have to be ECI as long as the actual employees/owner/director are outside of the USA.
buynps.org
2020-08-24 18:31
@yuli how were the opinions of the other lawyers other than Stewart?
buynps.org
2020-08-24 18:31
I also spoke to stewart and can confirm he said it?s not ECI
yuli
2020-08-24 18:36
@buynps.org Basically, 9 out of 10 lawyers said that it is very ECI connected when everything is 100% in the USA, even if the actual employees are not physically present in the USA (This was a specific advise for eCommerce, since all of the inventory if physically stored here and fulfilled from the USA)
yuli
2020-08-24 18:36
So it was 180 degrees the opposite from Stewart :slightly_smiling_face: I am wondering if anyone actually was "audited" or checked and then Stewart's advice 100% worked and was valid? Or if they know additional lawyers rather than only 1 on the internet which reads the tax-book laws in that way?
simon
2020-08-24 19:01
Here?s an explanation from the IRS. In short, if you sell products manufactured outside of the US, to US customers, the income is not ECI (even if the product is located in the US at the moment of the sale). If the product was manufactured in the US, the income is ECI (in most cases).
simon
2020-08-24 19:01
In some cases, IRC 865 may apply which makes things a bit trickier but the above should apply to most of you.
yuli
2020-08-24 19:09
Thanks for sharing that @simon. The fact it is directly from the IRS pages is strong evidence, yep. I was consulting on that topic approx. 2 years ago when I sold a USA eCommerce business with a bunch of lawyers and was getting mixed opinions (i.e 90% for it is ECI vs. 1 it is not) - maybe they were wrong.
But those benefits, if indeed that is 100% good to structure it this way is relevant I guess as long as you live in low-tax jurisdictions (just for example, Panama) to potentially enjoy those benefits. Otherwise, if you are a resident of a high-tax country anyway, that doesn't help much.
michal.opoka
2020-08-24 19:11
I think it's still based on 1942 court ruling about Mexican radio station broadcasting into US https://www.leagle.com/decision/1942387127f2d2601321
buynps.org
2020-08-24 19:15
@yuli what kind of lawyers did you consult with? in my experience consulting with US tax lawyers I also got a ton of answers based on their field.. expat lawyers, or people in international, etc
yuli
2020-08-24 19:16
@buynps.org basically USA Tax lawyers I find on Google - this was pretty random and I wasn't looking just for expact or other type of specialty lawyers.
buynps.org
2020-08-24 19:30
@yuli hmm, so what?s your ultimate take? do you agree with simon?s interpretation with the irs code?
buynps.org
2020-08-24 19:31
hey @frederic.scheffer - how did the call go?
yuli
2020-08-24 21:12
I have no idea :slightly_smiling_face: Overall, the IRS interpretation seems pretty straight forward I have to say. If it would be 100% relevant to me, I would run it by extra lawyers to get extra opinions and would show it to them. It's not mine to "decide". If I will get multiple same opinions it would have made me feel much safer (That's me I guess)
Currently did start a new business which is USA LLC - but the owner is Israeli and lives in Israel - it is a new Amazon business of mine, but I cannot put my name there currently (I am the nomad who has low personal tax) because my account banned on Amazon, so there is no need to me to do those extra checks.
buynps.org
2020-08-24 21:21
cool, which country did you end up picking for your low personal tax @yuli?
yuli
2020-08-25 18:35
Panama. But I am currently working on moving living in Canada.
elsamadrolle
2020-08-26 10:41
Update on Portugal and NHR: I finally spoke to a good accountant. The first two years of NHR you can set up as self-employed with the simplified accounting regime up to 200k euros and benefit from a large % discount as they want to help you set up the company (exact amount depends on the activity), so its only a fraction of 20% tax that you pay even though you do have to pay social security (in my case 50% of that income is exempt from tax the first year, 35% exemption the second). Anything over 200k euros can be invoiced through offshore and as long as you can associate/prove that income to travel time working elsewhere, and pay yourself dividends, they can be tax-free. So for me it might work something like this, if I am in Portugal 8 months of the year I get charged tax (a portion of 20%) on that income after exemptions, then I pay social security on that income. Then for the remaining 4 months that I am outside Portugal I invoice through a non-PT company and pay myself dividends, which are then not taxed in PT under NHR. This explains why I was told every year is different and there should be a new strategy each year. Hope this helps!
marziovit
2020-08-26 10:52
I found it too convoluted
simon
2020-08-26 11:02
@elsamadrolle Thanks for sharing! Is social security calculated on the reduced amount for the first two years?
bartek
2020-08-26 13:05
Any chance to have a list of activities and % of their reduced income for calculating income?
Or maybe some contact to accountant with his/her pricing (can be by DM if you prefer to)
bartek
2020-08-26 13:08
found something, not sure if it is current, but seem so:
https://www.eurofinesco.com/en/our-publications/sole_trader/1-simplified-regime/36-e2-sole-traders-a5-tablet-colour-cover-13th/file
page 13
elsamadrolle
2020-08-26 13:17
No but it?s capped at 1,119 euros per month so 13,428 euros per year.
elsamadrolle
2020-08-26 13:20
Also first year of trading exempt then 21% applied to 70% of income up to the capital
elsamadrolle
2020-08-26 13:20
Cap! Not capital
elsamadrolle
2020-08-26 13:21
Actually full disclosure those are the guys I used!. They took forever to come back to me but I think the advice was good. Yes their stuff is current
bartek
2020-08-26 13:22
haha, nice :slightly_smiling_face: ok so I need to check to which bracket my activity belongs to and make some calculations, many thanks on that
tiagomdreganha
2020-08-26 14:53
The simplified accounting regime taxes you based on revenue not profit.
For sales of products, 15% of the revenue is deemed as taxable profit for income tax, and 20% for Social Security (and then you pay 21.4% of that). Capped at 3300?/quarter.
For services it's around 70 to 80%, not sure.
This is what I use for my eCommerce activity but I've had to register a PT company because my sales this year increased way over the 200k.
tiagomdreganha
2020-08-26 15:01
Correct the first year you are exempt, then 21.4% on the taxable income (which for Social Security in case of sale of products is 20% of revenue). You can reduce/increase the amount by 25%, so it ends up being 16% effective SS rate, 3.2% of revenue (for products), capped at 3300?/quarter.
If you invoice the whole 200k on the same quarter you only pay 3300? the following quarter, and then the minnium 20? payment on the quarters where you don't invoice anything at all.
For income tax, NHR is 20% flat rate, and for sales of produts it's 15% of revenue, so effective rate is 3% of revenue.
The bad part of this regime is that it is capped at 200k/year, you can go up to 250k on a single year but not on two consequent years.
Sounds like a good option to combine with the offshore company as long as you can prove you're out of the country when managing it.
bartek
2020-08-26 15:08
Selling services are currently 75% of revenue, is that correct?
tiagomdreganha
2020-08-26 15:09
Correct
elsamadrolle
2020-08-26 15:19
Thanks Tiago it?s complicated but actually attractive once you can get your head around it. A good Portuguese accountant definitely helps
frederic.scheffer
2020-08-31 03:22
1h40 call with KPMG Thailand, talking to the Tax partner directly.
Topic: Paying oneself with dividends in Thailand and pay almost 0 tax, and do this legally. Be protected legally from Thailand AND your home country.
Reminder of rules about foreign sourced income in Thailand: income derived from work performed outside of Thailand, business conducted outside of Thailand will not be taxed in Thailand if an individual brings such income into Thailand in the next calendar year that he receives it. This is what is interesting for nomads and could allow paying 0 tax on a major part of your profits.
Source: https://www.mazars.co.th/Home/Doing-Business-in-Thailand/Tax/Basis-of-Thai-personal-income-tax
Answers from KPMG:
A. THAI RESIDENCY: Every year, need to spend at least 183 days in Thailand to have the residency from the Thai point of view. Get a TIN number and make your annual tax declaration, and get a tax certificate (KPMG can do tax return 35k THB per tax return + tax certificate 20k THB per certificate)
Warning: 2-3 months is not enough to keep the residency, it's 183 days for EACH year according to KPMG Tax partner.
B. WHERE TO PAY DIVIDENDS: Only bring to Thailand what you need to. No reason to store the money in Thailand (except if you want to use it in Thailand). You can transfer the dividends from your company to any personal account of yours in the world (outside Thailand, can be Europe, HK, Singapore, etc.).
Keep all proofs of these dividends being paid + bank statements, so you can show your home country that these were foreign income and thus not subject to tax during your residency in Thailand. This way you can then legally get these funds to your home country or next place of residency and have the proofs that these funds are legal.
C. BE READY TO PROVE YOUR SITUATION TO YOUR HOME COUNTRY:
i) Pay some tax in Thailand, to get a Thai tax certificate, to show your home country that you have been a resident. Example: remit 20 000 USD per year to a Thai bank and pay tax on this.
ii) Keep track of your passport stamps to show how long you stayed in the country.
iii) Have a long term rental or own a condominium (not necessary to own a place, long term rental is ok). Better than just staying in hotels. You can still stay in hotels if you enjoy it but better if you have a long term rental even if you don't stay much there. Keep all documents.
D. HOW TO SHOW THAT WORK WAS DONE OUTSIDE THAILAND (to keep this income as foreign income):
i) Stay in Thailand 6 to 8 months a year. The rest of the year can be spent in China, Europe, wherever you do your business. Keep track of travel stamps.
In my case, e-commerce, its about checking suppliers in China, making deals there, going to do marketing in Europe/US where the customers are.
ii) Have 0 or an insignificant amount of customers in Thailand
iii) Do not have any deals, board of director meetings, documents signed from Thailand.
Basically you want your time in Thailand to be off-time. Mini-retirements. So no work can be attributed to your time in Thailand.
Thailand does not check this but I asked them to be future proofed.
buynps.org
2020-08-31 03:57
thanks for the share @frederic.scheffer!
buynps.org
2020-08-31 03:59
> i) Stay in Thailand 6 to 8 months a year. The rest of the year can be spent in China, Europe, wherever you do your business. Keep track of travel stamps.
> In my case, e-commerce, its about checking suppliers in China, making deals there, going to do marketing in Europe/US where the customers are.
so basically, one would be taking the angle you are only in thailand during the off-time/vacation for the 6 months? the ?work? is done in the months not in thailand?
> ii) Have 0 or an insignificant amount of customers in Thailand
what is the benefit of this? does it contribute in ECI some how?
buynps.org
2020-08-31 04:00
it sounds like a lot of hassle.. if you are on the border of 6 months, why not just spend like 5.5 months there and become a tax resident of another country - or have no tax residency?
frederic.scheffer
2020-08-31 04:01
The goal is to be more than 6 months there, to benefit from 0% tax on foreign sourced income. Please read the beginning of the post
frederic.scheffer
2020-08-31 04:03
Correct. Work is done outside Thailand.
ECI: I think that this is for US citizens. I think US citizens are taxed on worldwide income, so cannot use this strategy I described.
frederic.scheffer
2020-08-31 04:05
Also, @buynps.org, in my opinion there is no such thing as "no tax residency". If your home country audits you, you will be requalified as a tax resident of your home country most probably.
buynps.org
2020-08-31 04:12
@frederic.scheffer hm yeah -
buynps.org
2020-08-31 04:12
> Stay in Thailand 6 to 8 months a year
longer than 6 months but around or less than 8 months?
buynps.org
2020-08-31 04:12
the benefit is the 2 months extra right?
buynps.org
2020-08-31 04:13
thanks!
frederic.scheffer
2020-08-31 04:13
Yes, to show that your work is done out of Thailand.
buynps.org
2020-08-31 04:13
i was hoping there was a way you can stay inside thailand, report somehow you are managing a company from within thailand, and it would be fine
frederic.scheffer
2020-08-31 04:14
Well then this is not foreign sourced income. You would have a Permanent Establishment in Thailand as you are managing a company from Thailand.
buynps.org
2020-08-31 04:15
even though it?s hard for them to prove.. if you run an internet business, if you send emails inside thailand that?s technically now local sourced
buynps.org
2020-08-31 04:15
yeah
diegoreymendez
2020-09-02 14:41
I?m trying to learn more about holding companies but while there?s a lot of info online, I?m finding it difficult to understand if this scheme would make sense for my particular situation.
For context:
? I?m currently in Argentina but planning to move to Italia and keep my existing clients (US based).
? I was wondering if I could reduce my salary in half at the operative Company, and then have the rest saved through the holding.
The main doubts I have are:
1. At what level of income does this scheme start to make sense?
2. Does this type of scheme make sense as a single owner? Does having my wife as a partner in the holding company help?
tatelev
2020-09-07 07:03
Good morning! Does anybody have any feedback on how to solve the Amazon USA seller / Legal entity settings for foreign owned U.S LLC ?
tatelev
2020-09-07 07:04
Amazon makes you do the tax interview as an individual, non U.S Person? and write as legal entity your name, last name and the address of your country of origin, which ends in a form W-8BEN filled
tatelev
2020-09-07 07:07
I?ve never seen a problem with my amazon account?s ?Legal entity? showing as my name and lastname in the backend, until now?. Amazon has started since September 2020 displaying to customers each seller?s details and address. Instead of showing my LLC?s name, they use the value of the ?Legal entity?, so they are showing as ?Business Name? my first and last name to customers
tatelev
2020-09-07 07:08
so now I see a problem with that, but I just don?t know how to change it, since my amazon?s tax interview seems to be filled properly
tatelev
2020-09-07 07:08
any ideas?
simon
2020-09-07 08:39
@tatelev Have you tried reaching out to them?
tatelev
2020-09-07 08:54
@simon nobody knows anything in Seller Support, they just give always the same copy paste answers which are basically this:
tatelev
2020-09-07 08:55
"?Hello from Amazon Selling Partner Support,
I understand you would like your Business address to be displayed to the buyers.
I see that you have entered the name ?[MyName&Lastname]? as Legal Entity. For a Professional seller, the legal entity is the name your business is registered under. Therefore, it should be entered as ?[MyLLCName]? instead of the existing one.
You can change the seller information displayed to customers in your seller account at any time by completing the following steps...?
tatelev
2020-09-07 08:57
and the steps that they copy&paste are total bs and disregard the fact that they trigger a new tax interview which is where you fill that information. And in that tax interview the choices to make are very simple. ?Individual? or ?Business? and ?US Person? or ?Non US Person?
tatelev
2020-09-07 08:58
in this tax interview below the choice ?Individual? ?Business? it reads ?_?Individual?_ includes Sole Proprietors or Single-Member LLCs where the owner is an individual?
tatelev
2020-09-07 09:00
and the second choice is obvious: ?Non US Person?
tatelev
2020-09-07 09:02
that is the tax interview. Depending on what options you choose in first two questions, the end result will be one form filled with your information or another
tatelev
2020-09-07 09:03
If you choose ?Individual? and ?No? to US Person, the form *W-8BEN* will be auto filled with the rest of the information you fill
tatelev
2020-09-07 09:04
This has always seemed right to me
tatelev
2020-09-07 09:05
It is just that Amazon uses that ?Full Name? as my ?Legal Entity? and has also started since this September displaying that ?Full Name? as my business name to customers
tatelev
2020-09-07 09:09
Amazon, in the backend of my Seller Account in a different place also has two settings ?Official Registered Address? and ?Business Address?. In both of them I filled my LLC name together with its US Address
tatelev
2020-09-07 09:11
on the information that is now shown to customers in my amazon storefront, it appears my name and last name besides ?Business Name? (it gets it from my Legal Entity which came from information filled on my tax interview)
tatelev
2020-09-07 09:11
and besides ?Business Address?, my LLC?s US address is shown
simon
2020-09-07 20:13
So there is no way to manually set a store name, that isn?t the name in the W-8BEN? That?s strange, I wonder if US sellers using LLCs are also facing the same issues (with their personal names also being used when they file their W-9).
yuli
2020-09-08 00:46
@tatelev I do not know if it's helpful, but on an Amazon account I have, that legal entity it described as the actual legal entity itself, I do not remember what or how I have done it - that's just the way it's been
yuli
2020-09-08 00:47
I used the following law firm to purchase this AMZ account - perhaps you can write to them to ask: perhaps?
gbroome
2020-09-08 02:30
@tatelev This is another typical Amazon issue and I doubt you'd get a sensible answer from them. I have the same issue. If you follow things correctly and fill out the tax interview as their guidance notes say then yeah they will now display your personal name as the legal business name. I think it only impacts non US based single member LLCs because if you select US taxpayer then there's also a doing business as field. I think the only solution is to have the LLC member a foreign corporation or partnership rather than individual. I think I'll change this on my account but I hope that doesn't trigger any further Amazon issues. Would love to know if there is any other work around though.
tatelev
2020-09-08 05:37
@yuli thanks, I don?t fully understand your message. What do you see when you check in Seller Central in ?Settings > Account Settings > Legal Entity? in ?Legal business name? and in ?Place of establishment address??
tatelev
2020-09-08 05:45
@gbroome ?I think the only solution is to have the LLC member a foreign corporation or partnership rather than individual? Do you mean just selecting these options on the tax interview eventhough your LLC is a U.S Disregarded Entity? I think you could get into trouble because of that, because the IRS form that will be automatically filled by Amazon according to your choices in the tax interview, changes to a different form. Let me know also if you discover anything
gbroome
2020-09-08 08:47
@tatelev I mean formally changing who the single member owner is to an overseas corporation or partnership. Then maybe you can select business in Amazon rather than individual. Although then there's almost no need for the LLC anyway. You could just use the overseas entity. Bit of a pain though and that can cause other issues.
tatelev
2020-09-08 08:48
thanks @gbroome for clarifying. I don?t have an overseas entity
tatelev
2020-09-08 08:50
yes, the whole point(for me) of operating through a US LLC was to look as much as a US business as possible, while at the same time getting the ease of use and simple compliance requirements of an LLC, and without having tax obligations in USA
gbroome
2020-09-08 09:10
@tatelev yeah unless we can figure out the name issue in Amazon a better structure might be to have a UK LLP own the US LLC or vice versa. It's still low compliance and no US tax obligations. But if you need to change the business address to the uk they might start charging VAT on fees. There should be an easier way, I'm not sure Amazon would understand though or care much.
benjamin
2020-09-08 09:36
Does anyone have a resource that show which countries do/don't recognise entities like LLP/LLC as transparent flow through entities?
Finding it hard to find information on which countries recognise them as transparent. Rather than just a corporate entity.
yuli
2020-09-08 16:46
As I said, I see the actual company name and company address of mine. It is possible somehow apparently.
tmclayson
2020-09-09 09:19
If I were to setup a cyprus llc with a nominee director, would this be sufficient to avoid the "effective management" clause while living in Portugal as an NHR?
If not, what else is required for a cypriot company to remain tax resident in Cyprus? The company would primarily be receiving passive income from a US LLC.
vinodgn0088
2020-09-09 11:22
@tmclayson, Your name will appear on UBO register anyway and Portugal will find out that you are actually managing it. You need at least two real directors resident in Cyprus ( not nominees), a physical office and an employee who answers the emails and handle the phone calls. If you have NHR status in Portugal, then you can enjoy tax free dividends on this setup, Else you will get big tax bill due to CFC laws in Portugal.
tmclayson
2020-09-09 12:32
@vinodgn0088 Thanks, that's helpful. Do the requirements on this vary country by country? For example, I was told by someone in the same profession currently in Portugal that if instead of the Cyprus company, I had a UK company with 2 additional directors (friends or family who live outside of Portugal) then that's sufficient.
So in this scenario, the two other directors might live in Germany and the UK respectively, then there's not really a single location, so why is it deemed to be "effectively managed" from the UK?
Or would both directors need to be in the UK?
vinodgn0088
2020-09-09 12:57
You can use UK LTD too. But make sure that the director's meeting are held in UK, there is a real office and a real employee. Also, the person in Germany shouldn't be doing any other work on this UK LTD as it is better to avoid a PE claim by Germany. But, note that the UK Ltd will be paying UK Corporate taxes which is higher than Cyprus Ltd
vinodgn0088
2020-09-09 13:02
A UK Ltd is by default tax resident in UK because of Incorporation. However if it is managed from a different country and is governed by a DTAA then UK allows change of corporate tax residency to the other country. A company need to be resident somewhere. If you prefer to avoid red flags in Portugal, its better to have company Incorporated in a country where it is tax resident as well. Also, if you want to receive dividends tax free in Portugal, the source country must have the right to tax dividend and have DTAA with Portugal
tatelev
2020-09-09 21:46
@gbroome I found a solution. Select .http://com.mx (Mexico) from the top country picker in Seller Central to go to the Mexico account
tatelev
2020-09-09 21:46
once in the Mexico account go to ??Configuracion > Informacion de cuenta > Entidad juridica?
tatelev
2020-09-09 21:47
you should see your name and last name there, change it to your LLC name and save
tatelev
2020-09-09 21:48
then go back to your USA account, you should be good to go, provided you have your LLC name and us address in ?Settings > Account settings > business address? :)
gbroome
2020-09-10 03:25
@tatelev that's a great solution! Thanks, much appreciated.
tatelev
2020-09-10 14:36
@gbroome the only thing is that I do not know what this workaround affects, apart from showing your LLC instead of your name in your storefront
tatelev
2020-09-10 14:37
after this workaround, the ?Legal Entity? is changed, but without doing the tax interview again
tatelev
2020-09-10 14:37
so not sure what is the implication of this
tatelev
2020-09-10 14:39
any thoughts on this?
tmclayson
2020-09-10 15:04
Thanks for this, really helpful.
sterk
2020-09-11 07:33
One of the affiliate networks i work with is asking for a W-9 form? I have a Wyoming LLC and I am a non-resident.
sterk
2020-09-11 07:33
Do I need one, and where do I get it?
nikolay
2020-09-11 07:55
Download from IRS, fill it in via PDF, send it to everyone that asks in the future.
sterk
2020-09-11 07:56
But do I need one if I am not a US resident?
nikolay
2020-09-11 08:20
The W9 is about your WY LLC, not you as an individual.
nikolay
2020-09-11 08:20
So, yes you need it.
sterk
2020-09-11 09:09
Thanks.
simon
2020-09-11 09:53
You need to fill form W-8BEN, not W9
simon
2020-09-11 09:53
W9 is only for US residents
sterk
2020-09-11 10:24
Thanks Simon
alex720
2020-09-11 15:32
Wonder if affiliate networks charge royalty withholding tax for payments to non residents without treaties
alex720
2020-09-11 15:32
Not sure what the income is classified as
asarun72
2020-09-11 16:35
I think he is getting paid under his business name. So it should be w9 correct ? @simon
simon
2020-09-11 16:40
If it?s a disregarded entity, you fill the tax interview as if the entity didn?t exist (so W-8BEN if the owner is a natural person non-resident and W-8BEN-E if the owner is a legal entity non-resident).
simon
2020-09-11 16:42
You?d only fill a W9 if the LLC had elected to be treated as a C-Corp or if it had multiple members (partnership).
tmclayson
2020-09-12 14:09
With a Wyoming LLC, if I use a fulfilment centre in the US (ShipOffers in this case) to ship orders to customers (Health Supplements) would this classify as "engaging in business" and therefore create a tax liability?
We would have no employees there, and no work would be done (by me) there however.
I had planned the Wyoming LLC to be owned by a UK LTD, which in turn would pay me in dividends in Portugal, so in this setup I would only be liable for the UK corporation tax.
simon
2020-09-12 14:13
@tmclayson No, this will not usually create US ECI. Do note that running those two companies full-time from Portugal will likely create tax liabilities there (place of management rules).
tmclayson
2020-09-12 15:16
For the UK LTD I had planned on having two UK based directors and potentially an office if necessary, and hold any board meetings there.
So would I need a similar setup for the US to avoid place of management rules? Or can it be made so that the UK company controls the US one and pay tax there (which is what I hoped)?
Or do you have a better suggestion on how I can structure this US business together with NHR in Portugal? I need the LLC there to get US merchant id numbers (which I am told are kind of a prerequisite for the business, as international mids fail too frequently).
Suppose I don't even need the UK company if I have to have directors in the US...but then that would create a tax liability there?
simon
2020-09-12 19:17
If you have UK based directors, and your involvement in the company is kept secret (to make it look like you are a passive shareholder), you should be fine with the US LLC + UK LTD setup (assuming the UK based directors are also the ones managing the US LLC, listed on bank accounts etc). It?s obviously not a compliant setup but it?s very low risk.
nikolay
2020-09-13 08:43
Do you put the EIN of that US LLC anywhere on the W-8BEN or W-8BEN-E?
simon
2020-09-13 08:46
No, just your personal details (or that of your holding company, if applicable).
nikolay
2020-09-13 08:48
And still input the US LLC name under ?Name of disregarded entity receiving the payment (if applicable, see instructions)??
simon
2020-09-13 09:02
No, the US LLC should not appear anywhere on the form. That?s why it?s referred to as a disregarded entity, it?s disregarded for tax purposes.
nikolay
2020-09-13 09:10
Does the US LLC itself need to gather W-8 forms for payments it does towards other companies for expenses?
simon
2020-09-13 09:24
No, not usually.
nikolay
2020-09-13 09:29
In which cases would it need to?
simon
2020-09-13 09:50
If it pays out certain types of income that might be subject to withholding tax. If it goes over the annual threshold for certain types of payments etc.
tmclayson
2020-09-13 14:52
Thanks.
What is the definition of 'UK based'? Is the term synonymous with tax resident? And is the rule simply 'a majority of non Portugese', so if I am not one of the directors, it could in fact be a single UK based director?
seb.malek
2020-09-13 16:45
it means individuals which are tax residents of the UK
mb
2020-09-14 07:10
Question: I have an UK LLP, with two natural members. Is there an issue with allocating profits on a monthly basis to each of the member? E.g. UK LLP invoices for 10K a month > Distributes 5K to each member on a monthly basis.
Will there be any issues with HMRC in terms of seeing this as some type of salary? Both members are non UK residents.
simon
2020-09-14 08:52
@mb You can distribute profits from an LLP as often as you want. Also, salaries paid to non-residents for work performed outside of the UK are not subject to any UK tax / withholding.
mb
2020-09-14 08:53
Great, good to know!
mb
2020-09-14 08:53
Can it be distributed simply by transferring the funds as is, or does it require an invoice from each member?
simon
2020-09-14 09:33
There is no need for an invoice but all members should agree to the distributions (preferably in writing, in case there is a dispute between the members in the future).
tmclayson
2020-09-14 19:13
Am I correct in thinking that if I were living in Cyprus as a nom dom, I could pay myself primarily in dividends from my Cypriot company tax free - so I'd only end up paying the 12.5% corporate tax?
I keep reading contradictory information on this. Some places say foreign source dividends, some say foreign and local.
And in which case there would be no issue with my US LLC?
simon
2020-09-14 19:35
@tmclayson All dividends are exempt, local and foreign.
vinodgn0088
2020-09-15 02:54
@tmclayson, If you plan to run a US LLC from Cyprus don't forget about the "place of management" rules which could make the US LLC tax resident in Cyprus.
tmclayson
2020-09-15 03:00
That would be beneficial no? Part of the reason why Cyprus is probably better for my purposes - I wouldn't have to have any sort of complicated structure or worry about place of management since Cyprus has a generally favourable tax regime vs other countries.
tmclayson
2020-09-15 13:42
Hi @bountybairn When are you planning to move to Cyprus, and what area you going to set up in? Would also love to know the management costs you were quoted if possible. I'm planning a move next year sometime.
bountybairn
2020-09-15 14:26
@tmclayson I am here now, Paphos (the more laid back of the cities on the island) meeting adviser on Thursday so will be sure to take notes.
marziovit
2020-09-15 14:30
I like kato paphos :slightly_smiling_face:
simon
2020-09-16 23:49
Grant Thornton has published a list of Covid-19 related tax measures, it covers most countries. It?s a great resource for anyone who has spent significant time in a country this year as a result of travel restrictions and is worried about the tax consequences. https://www.grantthornton.global/en/insights/supporting-you-to-navigate-the-impact-of-covid-19/individual-and-employer-tax-considerations-for-coronavirus/
bountybairn
2020-09-17 13:14
I am in Universal @marziovit - partof Kato Paphos I believe, certainly right next to the bit nearest the sea. Its lovely here, been 31-36 degrees and clear blue skies for weeks, the sea is warm to swim in, food is great and I have 100mb down and 30 up wireless fibre - no complaints at all
bountybairn
2020-09-17 13:16
Kato being lower Paphos, Pano Paphos being upper Paphos AFAIK
alex720
2020-09-17 22:00
does getting an EIN for a foreign corporation create a US tax liability?
alex720
2020-09-17 22:00
what are the pros of cons of getting an EIN for a non-USA company?
alex720
2020-09-17 22:00
a bank is asking for one
seb.malek
2020-09-17 23:29
no it doesn't
asarun72
2020-09-18 17:15
Thanks @simon this will the same for getting paid as a non resident company from stripe too ?
simon
2020-09-18 17:46
@asarun72 Yes (assuming we are talking about a US LLC owned by a foreign company)
tmclayson
2020-09-22 07:40
Hi @bountybairn, can you share the insights from your meeting on Thursday when you get a minute?
simon
2020-09-26 20:51
@simon has renamed the channel from "taxation" to "taxation-personal"
simon
2020-09-26 20:51
set the channel topic: Everything related to personal taxation
alex720
2020-09-26 20:51
Anyone know how to get an itin without forming a USA company?
ivo
2020-09-27 13:35
@alex720
REASONS FOR APPLYING FOR AN IRS ITIN:
1. Nonresident alien required to get an ITIN to claim tax treaty benefit
2. Nonresident alien filing a US federal tax return
3. US resident alien (based on days present in the US) filing a US federal tax return
4. Dependent of US citizen/resident alien
5. Spouse of US citizen/resident alien
6. Nonresident alien student, professor, or researcher filing a US federal tax return or claiming an
7. exception
8. Dependent/spouse of a nonresident alien holding a US visa
9. Exceptions:
10. Third Party Withholding on Passive Income ? Foreign Partners in a US Partnership ? Interest bearing bank deposit accounts ? Receiving US distributions like pensions, annuities, rental income, royalties, dividends, etc.
11. Wages, Salary and Honoraria payments; or Scholarships, Fellowships and Grants; or Gambling Winnings; with Tax Treaty Benefits Claimed.
12. Third Party Withholding of Mortgage Interest
13. Third Party Withholding ? Disposition by Foreign Person of US Real Property.
simon
2020-09-27 13:51
You can get one by signing up for a service that will pay you royalties, and asking them for an ITIN letter (you will use the letter as your justification). Such services include music publishing, book publishing etc
alex720
2020-09-27 14:22
Can you recommend a service that will supply the itin letter without having an income or though the platform @simon
simon
2020-09-27 16:36
I?ve heard of people using Smashwords for that
alex720
2020-09-27 16:36
Thank you
ivo
2020-09-27 17:47
If you hold a US bank account, the interest you receive on your savings account is enough reason to apply for an ITIN
frederic.scheffer
2020-10-03 05:45
Hi guys.
What would you do in this case:
I am trying to pay a French resident to make marketing videos for our YouTube. Would be a half time to full time contract.
He is very interested.
He has a French company to bill me (I use a HK company). However, basically half of his money will disappear if he pays himself via salary or dividend using the French company. What would be a better solution? He should change residency ? Use a foreign company as a holding? Or, i guess, there is not much to do if he wants to stay in France and he should just optimize his French company as much as he can?
frederic.scheffer
2020-10-03 05:47
About 5000? per month payment
aimee
2020-10-03 11:17
Hi guys - Thanks for this great resource, I have recently joined.
I am trying to figure out the best structure for a new online-only business selling courses/memberships.
I am American and Australian...currently living in Australia, but planning to return to America in the next few years.
My business partner is Italian and living in Spain.
We are 50/50 partners.
I want a structure that limits our personal liability and ensures that we each are independently responsible for the taxes on our share of profits.
I was thinking either UK LLP or BC LLP. What are your thoughts on the better structure for this situation? Thanks so much!
marziovit
2020-10-03 11:40
UK LLP since Stripe accounts created in Canada con only receive payouts in CAD and USD
simon
2020-10-03 12:08
@frederic.scheffer if he works in France, he is pretty much out of luck. He could move to a lower tax country or he could commute to a lower tax country to work (France has a territorial taxation system for companies, and lots of DTAs).
simon
2020-10-03 12:14
@aimee Both structures offer similar tax benefits. If you have a US credit file, the BC LLP will work better as you?ll have access to more payment processing services (most payment processing services in Canada can run a credit check on a US credit file), banking will be easier (lots of banks have a presence in both the US and Canada), no return has to be filed in Canada if there are no resident partners / Canadian income (vs a nil return in the UK) and there is no publicly searchable registry.
As Marzio said, however, the UK LLP is a better option if you want to bank in EUR, GBP, CHF etc.
aimee
2020-10-03 19:31
@simon @marziovit Thanks! Yes, I have a good credit file in the US personally. I?ll debate the currency issues with my partner...I like the simplicity and privacy in Canada, and don?t feel limited as long as USD payments are an option. Thanks for the help!
buynps.org
2020-10-04 04:02
@simon the problem with BC LLP is there?s no tax ID? How to get around this to use it with stripe/paypal?
koshis
2020-10-04 07:59
@simon so a BC LLP is anonymous to the phblic? :thinking_face:
simon
2020-10-04 08:51
@kevin.ogier You can use the LLP registration number in lieu of a tax ID with most services.
@koshis It?s not anonymous but searching the registry involves having to submit a request (usually in the mail), pay a fee etc.
bountybairn
2020-10-05 10:57
Update: I met with a local lawyer today and have a fully run down of costs, summary is around 7k euro would get you a package of services which would let you run the company anonymously if you are actually living here (this was the focus of conversation as its my situation, i think the 'offshore' situation is perhaps somewhat different.
Ongoing costs for accountancy, book keeping and annual filing 2,600 euros per year (included in the the above 'start up' costs)
Many types of income are exempt from tax for a Cypriot company, including Distributions from overseas companies & capital gains on disposal of assets in company name, though income from IP based assets would be charged at 2.5%.
He confirmed the 0% tax on dividends paid to the beneficial owners too.
Will do a better write up and more details when I get a chance.
buynps.org
2020-10-05 18:10
@simon hmm interesting - because they ask for a BN
buynps.org
2020-10-05 18:10
but LLP?s don?t have BN?s right?
simon
2020-10-05 18:57
You can get a BN but using the LLP number is fine. Same for Ontario LPs (I have a number of Ontario companies and used the Ontario registration number for everything, even with TD).
seb.malek
2020-10-05 18:58
@bountybairn any info in regards to US LLC taxation in Cyprus?
seb.malek
2020-10-05 18:59
+ are you the sole director of your UK Ltd?
seb.malek
2020-10-05 18:59
(i.e. wouldn't the Cypriot taxman claim it's tax resident in Cyprus due to place of effective management?)
simon
2020-10-05 19:01
@seb.malek That is what you want, so that you can pay the 12.5% tax instead of the UK?s 19%.
seb.malek
2020-10-05 19:01
oh, yeah
seb.malek
2020-10-05 19:01
:smile:
seb.malek
2020-10-05 19:02
I wonder how are foundation distributions taxed...
buynps.org
2020-10-05 19:18
Cool, thanks!
bountybairn
2020-10-06 08:01
Im not sure on foundation distributions, but his words were 'the list goes on' with regards to income which is 0% here....
asarun72
2020-10-07 17:57
Came across websites applying EIN for a fee without needing a responsible party?s ssn or TIN
asarun72
2020-10-07 17:57
How this works ?
alex720
2020-10-07 18:00
Form SS-4
asarun72
2020-10-07 18:02
I know form ss4 needed to be filled in to apply for EIN
asarun72
2020-10-07 18:02
Do you know what you will in for 7b ?
asarun72
2020-10-07 18:02
IRS now expects SSN or TIN and its mandatory
simon
2020-10-07 18:07
No TIN is required if the responsible party is a non-resident
simon
2020-10-07 18:08
For US residents a SSN or ITIN is required
asarun72
2020-10-07 21:24
That?s good to know. I thought non us residents/citizens need to apply TIN first
asarun72
2020-10-07 21:24
Isn?t that what we discussed here sometime ago ?
simon
2020-10-07 21:32
It?s required when applying online but not via postal mail / fax. That?s a good thing because it takes forever to get an ITIN (at the moment it can take more than 6 months).
asarun72
2020-10-07 21:38
Yeah now it makes sense . They guarantee they will get EIN for $69 in 2-3 days saying they have a IRS direct contact
nemanja.mirkovicru87
2020-10-12 10:27
Under Malta GRP (https://www.ccmalta.com/malta-global-residence-programme) do you automatically qualify for tax residency when you get approved or you still need to spend 183 days or show ties?
jason
2020-10-12 13:58
@nemanja.mirkovicru87 nice link, interested in Malta as well. Can't answer your question as an authority, but I have always assumed those residency programs would automatically make you a tax resident.. if you anyone knows/learns different I would love to know more.
simon
2020-10-12 14:37
Malta doesn?t have a 183 days requirement, they instead rely heavily on domicile rules. In short, if you have most of your ties there and a permanent home, you?ll likely be deemed a tax resident. https://taxsummaries.pwc.com/malta/individual/residence
jason
2020-10-12 17:17
I have read Malta has a 5k minimum tax for "non-domiciled" residents
simon
2020-10-12 17:51
@jason That?s correct, you must pay at least 5000? in taxes
jason
2020-10-12 18:04
@simon and that's a somewhat new thing I believe, I have found outdated websites that said you didn't have to pay anything.
simon
2020-10-12 18:09
Yeah the minimum tax is a recent addition. I recommend reading this brochure, it explains pretty well how taxation works in Malta: https://cfr.gov.mt/en/inlandrevenue/legal-technical/Documents/Guidelines%20on%20The%20Remittance%20Basis%20of%20Taxation%20for%20Individuals%20under%20the%20Income%20Tax%20Act.pdf
jason
2020-10-12 18:23
Thanks, I will definitely review that.. Malta vs Portugal.. hrmm..
nemanja.mirkovicru87
2020-10-14 10:37
I'll definitely let you know if I learn new things
nemanja.mirkovicru87
2020-10-14 10:40
Got it. The lawyer said if you show ties you can spend less than 6 months.
He couldn't really answer if that would be 2 or 3 or 5 months.
He also said that even if you have pretty much everything you can imagine in Malta you are still non-dom unless you spend like 20 years there and declare yourself domiciled in Malta.
nemanja.mirkovicru87
2020-10-14 10:41
15k for non EU :wink:
benjamin
2020-10-14 11:06
Is there a general rule with how long you can spend in the US or UK when you have a LLC or LLP? Would going there for a month on holiday create a tax liability because of source income? What's the general practice to follow to ensure you don't create a liability?
simon
2020-10-14 12:56
@benjamin Same as any other countries, don?t stay long enough to qualify as a tax resident and you?ll be fine (most countries tax work performed within their borders but when it comes to remote work it?s nearly impossible to enforce).
mikeseo
2020-10-15 01:56
https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test
I think as a tourist you can stay around 4 months a year without owing taxes
frederic.scheffer
2020-10-19 09:51
UK LLP: has anyone confirmed with tax experts that you won't be challenged by HMRC for sending the profits to yourself or another company, and not paying tax in the UK?
I understand the logic, I understand how it is interpreted but has anyone got a confirmation by people who are experts?
frederic.scheffer
2020-10-19 10:14
Could, for example, HMRC exert a right to ask the beneficiary owners where the tax has been paid?
simon
2020-10-19 11:39
@frederic.scheffer No, they have no jurisdiction over other countries / whether you are compliant there (and from my numerous talks with them, don?t seem remotely interested).
frederic.scheffer
2020-10-19 11:41
@simon thanks. How often would a LLP with non-resident partners (companies or individuals) be audited by HMRC?
Any info from accountants with a lot of experience about that?
simon
2020-10-19 11:51
No accountant has significant experience with this, as LLPs are rarely used in the UK and even more so by non-residents (and when they are, it?s usually private equity funds and the like).
If you have no UK income and are a non-resident, the risk is close to nil. Even if you are audited, all you have to prove is that you are a non-resident and performed no work in the UK.
I?ve filed thousands of self assessment returns for LLP partners over the years and with the exception of the occasional one getting lost in the mail, haven?t run into any issues.
frederic.scheffer
2020-10-19 11:52
Thanks Simon
leehodg
2020-10-21 17:57
@here does anyone have experience with UK tax residency after leaving the UK to perpetually travel and be "non tax resident anywhere" whilst working online?
I know the Statutory Residency Test (https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt) is very definitive about what makes you a tax resident, and I pass the "first automatic overseas test" by not being in the UK more than 16 days in a tax year. However occasionally online you read "you can't be a tax resident of nowhere" and that western countries are pushing for you to have a 2nd residency before they accept this.
I asked on the HMRC (UK tax office) community forums and they did tell me that the SRT test is all that matters, and that 2nd residency would only come into play if I was trying to use a DTA to some effect (e.g. triggering tax in another country), so I feel like I'm 99.99% good and I genuinely should not file UK tax returns. However, articles like https://nomadcapitalist.com/2019/08/23/nomad-tax-trap-living-nowhere-harder disconcert me from time to time
Next year I plan to take steps to become resident in Costa Rica/Nica so at that point my situation would be much clearer, but I'd hate to wake up one day to a huge backdated tax bill
buynps.org
2020-10-21 18:57
Using a USA LLC (no ECI) - what if there was a partnership that had an ownership of:
? 30% Canadian tax resident
? 70% other tax resident
Would the 30% ownership of the Canadian tax resident cause some kind of PE and tax liability for 100% of the profits for Canada?
simon
2020-10-21 19:45
@buynps.org Compliance will depend on where the work is actually performed. If not in Canada, the Canadian partner will have to report his / her share of the profits on their Canadian return. If in Canada, you?ll likely have to file a partnership return (and the foreign partners Canadian returns, if they are attributed any Canadian income).
simon
2020-10-21 19:50
@leehodg If you pass the first / second test, and have no other UK income (rental income, for example), you will have no UK filings / liabilities. You can continue using your UK NINO / UTR when opening bank accounts but should not claim any treaty benefits.
buynps.org
2020-10-21 19:56
thanks @simon!
buynps.org
2020-10-22 02:16
@simon if the canadian performs work in canada, is it possible to ?taint? the other 70% and cause a tax liability there? assuming both are doing work in their respective countries
simon
2020-10-22 12:20
It?s possible, if the other partners receive parts of the profits generated in Canada.
leehodg
2020-10-22 13:49
I've been thinking about how to structure things. Next year I plan to move to either Costa Rica/Nicaragua. Not solely because of territorial taxation, but of course that helps :slightly_smiling_face:.
The years when I've been tax resident in the UK (my country of birth) I operate as a sole-trader (freelance IT consultant) with clients mostly in the UK/USA for context and with profits less than UK VAT threshold (~£85k). The UK VAT situation is quite attractive to me for that reason, and a lot of my clients are there.
It seems my options are:
? *UK LTD*: Not good for when I move to CR as I'd still be charged UK corporation tax I think :x:
? *UK LLP*: Transparent for tax purposes and would be good except I am just one person and min membership is 2 I believe. Otherwise this would have been great as it wouldn't be treated as a tax entity in its own right, the tax burden would pass to me as an individual, and living in a territorial tax country would mean 0 tax. :x:
? *US LLC*: I think this would also be transparent and shift the tax burden to me, and no min number of members to form one? I don't think have US clients would mean it becomes eligible for US taxation (?). The only doubt I currently have is whether I'd have to start charging clients VAT/GST (?) :question:
? *Estonia e-residency*: Seems easy and cheap to setup and manage. As far as I can see however I'd still have to pay estonian corporation tax of 20% when I withdrew funds, and without VAT breaks, even if I was living in CR and even if the work was not done on Estonian ground and it was with foreign clients. I almost might as well use the UK LTD over this :x:
? *Costa Rican corp*: Some brief consult with an accountant there over email, suggested maybe I could just set up a CR company and treat income from foreign clients as foreign income to the company and not pay taxes on it. The good is that I'd file taxes to CR each year and it would be very "above board". The downside is this company would look less reputable to clients, and if I really had a CR bank account connected to it (not sure necessary) then maybe payments would stall :question:
I know people mention HK a lot too, but at my level I'm not sure I could afford to incorporate there. I also heard Bulgaria has low (10%) taxes, but that still seems potentially worse than US LLC in my situation.
Is there anything else I should consider? Thanks for any help!
mb
2020-10-22 14:00
@leehodg As for UK LLP you can also have a second partner be 0%. And that can be a natural or legal (foreign) entity. Lots of options. But ask Simon for details there.
marziovit
2020-10-22 14:16
I agree, UK LLP would be your best bet.
marziovit
2020-10-22 14:23
@mb do you know if a LP could be a partner of a LLP? I was thinking that @leehodg could be the single partner of a Ontario LP, add the Ontario LP as the first partner of British Columbia LLP and add himself as the second partner of a British Columbia LLP so that everything could be tax free and if Lee would handle this using Simon services he would end up paying only $97 yearly. This of course would not work if he has clients in Canada.
simon
2020-10-22 14:35
@leehodg You could use both a UK LLP and a CR corp (you?d be partner 1, the CR corp partner 2). This way, you?d get the best of both worlds (you can attribute 100% of the profits generated while in CR to the CR corp, 100% of the profits generated while abroad directly to yourself).
Ah and regarding VAT, only sales where the place of supply is the UK are liable. If you work from central America, your sales will not be VAT liable (and will not count towards the £85000 threshold).
marziovit
2020-10-22 14:38
@simon just out of curiosity can a Ontario LP be partner of a LLP or the single member of a US LLC?
simon
2020-10-22 14:40
@marziovit Sure, a BC LLP also.
marziovit
2020-10-22 14:41
@simon and in case the ON LP is the single member of a US LLC is still treated as a disregarded entity?
simon
2020-10-22 14:56
Yes, who is partner doesn?t have any influence on the treatment of the US LLC / UK LLP.
leehodg
2020-10-22 15:13
@mb @marziovit @simon thanks!
@simon just to clarify:
1. Could I open the CR corp on a temporary residency? (it would take me ~3 years to get permanent residency I believe).
2. You mentioned the best of both worlds: attributing 100% of the profits to the CR corp when in CR and 100% when abroad to myself. In the first case of attributing the profits to the CR corp when doing work living in CR, would that still count as foreign income as be tax exempt?
Good to know about the VAT thanks!
Would you recommend this UK LLP with CR as a partner over the US LLC? I didn't yet see any issues with the US LLC and it seems simpler if I don't work on US soil? (although not sure if US clients affect my tax eligibility)
simon
2020-10-22 16:17
1. I?m not sure, you?d have to ask a CR immigration lawyer.
2. Using an LLP will not affect how the income is taxed in Costa Rica.
I personally prefer the UK LLP over the US LLC. As a UK citizen, it will also be a lot easier to apply for business credit cards, bank accounts, payment processing etc. In both cases, there will be no UK / US tax as long as no work is performed in the UK / US (physically there).
leehodg
2020-10-22 17:20
@simon thanks very much. Maybe it's a dumb question but IF I couldn't set up the CR corp until I was permanent, and went down the US LLC road, I couldn't attach a UK business account to it I guess?
Would also setting up a corp in Panama with the $5k bank deposit (and being from a friendly nation) also serve as the 0% partner or would that be way too much hassle compared to the other ideas (US LLC, Ontario LP etc etc)
simon
2020-10-22 19:39
You could setup both a UK LLP and a US LLC (the US LLC would act as the second partner). This has the advantage of allowing you to apply for US business credit cards (they offer excellent sign up bonuses, up to 5 miles per $ spent and have no forex fees). AmEx is a popular choice because they can do credit checks in the UK (so there?s no need for US credit history).
Panama would work too but it?s overkill and unnecessarily expensive (and doesn?t offer access to US banking).
leehodg
2020-10-22 20:32
@simon thanks. Sounds like a good setup. Is it possible to open the US LLC without a US postal address? (and with just one member)
simon
2020-10-22 22:35
The LLC itself needs to have a US address but the member does not.
mike
2020-10-22 23:03
With the MM2H program you?re a resident but not a tax resident until you spend 183 days/year in Malaysia.
Therefore, could you spend 5.5months/year working on your offshore company while in Malaysia and it not matter?
Or is it better to have Malaysia as your residency and only work on your biz while you?re outside of the country?
ivo
2020-10-23 07:24
@leehodg @simon Simon?s suggestion of UK LLP + CR SRL sounds very solid. I have a Costa Rican SRL and you can open it without any residency there. Though in that case you may need a 2nd local director (at least that?s what we have, but I?ve set up the business w/o ever setting a foot into the country).
leehodg
2020-10-23 10:04
@ivo oh, great! Thanks. Do you have any suggestions for a lawyer (or otherwise) whom I could contact to go about getting that process started?
leehodg
2020-10-23 10:20
@simon also I'm wondering if I should just go with the US LLC. It just seems like the simpler idea unless I'm missing something? Since it's a single entity instead of 2. I don't need a 2nd partner involved etc. The only complication I know about so far is I'd need a US postal address. I presume there are ways around this however?
I know bank accounts are the other drawback with this you mentioned too, so I suppose it depends on that too.
marziovit
2020-10-23 10:32
@leehodg bank account will not probably be a problem if you go with http://mercury.co and then when you'll fly CR you'll stop in US and open a bank account in a physical bank.
marziovit
2020-10-23 10:33
The problem will be with payment processors. Depending on your business model PayPal will be impossibile to open without a US SSN. I think Stripe will look for an utility bill or something that shows you are US based.
marziovit
2020-10-23 10:37
Another option for you, even easier would be to open a Ontario LP, assign the CR SRL as the general partner and you as the limited partner.
marziovit
2020-10-23 10:40
With this setup you will have ZERO annual filings and you will not have to mess with IRS
marziovit
2020-10-23 10:40
The problem with Canada is that you will have to fly there to have a bank account open
marziovit
2020-10-23 10:43
Also it goes without saying that sending an invoice to customers from a canadian company immediately is perceived more reputable than an invoice sent from a Delaware company because we all know what's going on there, right?
buynps.org
2020-10-23 16:17
When I had asked my bank, BMO if they could open a bank for an Ontario LP, with two foreign partners, they immediately said no, and it was a huge red flag. Any ideas?
@marziovit
marziovit
2020-10-23 16:23
@buynps.org Well @simon said that's possibile to open a bank account for a Ontario LP. Have you tried asking other banks?
marziovit
2020-10-23 16:27
Also, i was reading the BC partnership act and "it seems" that a BC LP doesn't expire after five years like the ON LP. It says that you could indicate when the partership will expire in the partnership agreement. If this is true then you don't have to pay for the renewal! :slightly_smiling_face:
buynps.org
2020-10-23 16:28
@marziovit I asked TD and they didn?t seem to understand this LP structure, but said they can do it. It was a low level person
buynps.org
2020-10-23 16:28
the other issue was getting some kind of tax identification number for Stripe or paypal
marziovit
2020-10-23 16:29
Have you tried using the partnership number as the tax identification number?
marziovit
2020-10-23 16:31
LOL how they didn't understand a limited partnership?
simon
2020-10-23 16:58
You can use the registration number as your tax ID, at least it worked for me with TD (and several others that I know have opened accounts as non-residents). The partner(s) have to go in person, however, and that?s not possible at the moment.
leehodg
2020-10-26 15:38
I recently had a call with an accountant to run through my plans to structure things. He suggested as a single IT consultant I could just set up a UK Ltd, whilst living in Costa Rica, then avoid the 19% corporation tax by paying myself almost all the profits as salary. Then in CR the salary wouldn't be taxed due to their territorial system. He said this would be OK upto £120k salary per year roughly and above that I'd need to consider something else.
This appeals to me as with the LLP I'd need to setup a foreign entity as the partner, which is slightly more work/complexity. Having the UK Ltd would also be a boost for reputation.
Just wondering if people here think this advice is sound and any pros and cons vs the LLP route?
leehodg
2020-10-26 15:41
@simon I was reading your article https://www.freedomsurfer.com/myths/ and myth 7 has me a little worried. As a freelancer the income I derive is from foreign clients, but it's not passive income. It would derived from work done on CR soil even if remitted from a UK Ltd/LLP and from billing US/UK clients. Would I potentially get myself into trouble because of the territorial tax=no tax assumption?
jason
2020-10-26 15:56
@leehodg curious about your questions as well, I've heard of similar situations for expats in Belize, that technically you aren't supposed to work there, but enforcement is extremely lax and as long as you don't go around advertising the fact that you are actively working / consulting you should be fine.. (not legal advice obviously, just what I've heard)
simon
2020-10-26 16:18
@leehodg @jason Territorial taxation takes into consideration the place where your work is performed, not where your clients are located or where your company is registered. If you work from Costa Rica, your income will be CR-sourced. With that said, a lot of accountants in central America report all income received from foreign clients / companies as foreign-sourced (even if its not, technically-speaking) and I haven?t heard of anyone getting in trouble so I?d guess you?ll be fine.
leehodg
2020-10-26 16:38
@simon thanks. I presume the situation is identical for Nicaragua and Panama too? (I'm pretty flexible and would consider residency in most central american countries outside of Honduras/El Salvador)
It just worries me a little if I have to rely on them not investigating/looking the other way. Would probably have a heart attack if I did that for five years then got a massive backtax bill. I would almost rather pay 10% or something small upfront if it's airtight legally than take a bigger risk on 0%, but maybe I worry too much
simon
2020-10-26 16:43
Yeah, their tax systems are similar. For sure it?s a bit dodgy, reporting local income as foreign-sourced, but I doubt the tax authorities will care (they are critically underfunded / lack resources to pursue international cases).
leehodg
2020-10-26 16:48
@simon yeah, I am imagine they wouldn't care and it's a relatively safe bet to make I suppose.
If I was feeling particularly risk averse, would there be any low-tax (<15%) structures you'd suggest out of interest? or wouldn't they really exist in my situation (small business...I don't have a spare £100k lying around etc etc)
buynps.org
2020-10-26 16:50
hmm@simon do you think there is more exposure in:
1. getting tax residency, and reporting local sourced income as foreign sourced (in a territorial tax country)
2. or staying as a perpetual traveller and be a tax resident of no where?
simon
2020-10-26 17:57
@leehodg You could establish residency in a low tax country, domicile your company there (for example, a UK LTD) and stay in central America as a tourist (or resident but keep quiet about working there). Cyprus is a decent option with a flat 12.5% corp tax (no personal tax on dividends) but qualifying as a tax resident requires 60 days spent in the country every year.
simon
2020-10-26 17:58
@buynps.org The ideal strategy is to qualify as a tax resident in a territorial taxation country but spend most of your time traveling (with no work performed while in the territorial taxation country).
bountybairn
2020-10-27 13:07
@leehodg Cyprus is a great place to live :wink: :smile:
My main frustration is that they have a very Mediterranean approach to getting things done, very laid back and opening accounts etc can be problematic unless you have everything there with you. But once you are up and running its pretty stress free, good food and weather, after 5 years you can apply for permanent residency without investing 6 figures or more.
marziovit
2020-10-27 13:16
@simon how can you be tax resident somewhere if you are constantly traveling? For example how do you became tax resident in HK? Have you applied for a business / investor visa by opening a company there?
yaron.been
2020-10-27 14:30
@simon
Is there somewhere a list of all the territorial taxation countries and the ease of obtaining a tax residency in them?
gastan
2020-10-27 21:40
You can for example be permanent resident of Panama. It is fairly easy to get it, if you are from friendly nations.
Then you need to show up every 2 years to keep the status. Other than than you can travel as you (or COVID) like
leehodg
2020-10-27 21:41
@bountybairn is it easy to get residency is cyprus? I always thought it was fairly difficult for some reason (like needed a big investment)
alex720
2020-10-27 21:41
150k slow track, 300k fast track for a residence permit
leehodg
2020-10-27 21:42
:eyes: yeah...would be ruling that out at the moment, haha
alex720
2020-10-27 21:42
maybe you can get a work visa by sponsoring yourself from your company.. there are likely other options
alex720
2020-10-27 21:43
and the above is a real estate investment not a donation
gastan
2020-10-27 21:43
Also I've heard you can fairly easy get residency in Dominican Republic, where you get 4 year card, and you only need to show up before card expires, to get a new one...If you dont, you will be charged on the time spend in expiration...
Ofcourse... shall you need to prove something (to your present high tax gov) beyond showing your residency cedula... it may be trickier...
But I heard Panama can give you cert of tax residency (where you show shopping receipts, or 183 days/year presence based on passport stamps...)
simon
2020-10-28 01:59
@leehodg Cyprus is an EU country so as long as you move there before Brexit, you will get residency without having to qualify the way non-EU citizens have to.
simon
2020-10-28 02:02
This Wikipedia page has a list: *https://en.wikipedia.org/wiki/International_taxation*
bountybairn
2020-10-28 14:25
@leehodg as Simon says if you are UK based and move before Christmas you should be ok - assuming you arent planning on claiming any social security support for living. Foreign income is the basis of my residency, meeting on Monday but expected to be a formality - I have a lease, local bank account, medical cover, and foreign income to cover living costs. Currently I am technically an EU citizen so with the above theres no real risk of being rejected.
bountybairn
2020-10-28 14:27
Locally they are extending the deadline till the end of January but there is a waiting list. in some areas of the island.
marziovit
2020-10-28 14:40
@gastan where did you get that 4 year card info? Can you show me a link?
buynps.org
2020-10-28 16:43
@simon what do you think of the anguilla program? $75k USD flat tax for tax certificate, with only 45 days minimum stay per year? 5 years to british citizenship
gastan
2020-10-28 20:00
@marziovit sorry, dont remember, I guess some newsletter (Offshore living letter). but I have email of immigration lawyer in case you wanna check it out.
yaron.been
2020-10-28 20:46
Awesome. This is gold :slightly_smiling_face:
Thank you
simon
2020-10-28 23:07
@buynps.org It seems way too expensive, you could instead get a free St Helena self employment visa, spend 90 days there every year (to maintain tax residency) and apply for St Helenian status and UK citizenship after five years. St Helena is a territorial taxation ?country? so you could do this tax-free.
marziovit
2020-10-29 04:31
yes please give, give that email. Thanks
julienduteurtre
2020-10-29 19:56
@simon Does getting an ITIN in the US would trigger any taxation in the US ?
simon
2020-10-29 20:17
@julienduteurtre No, nor does it create any filing liabilities.
sergiy.shlykov
2020-11-02 19:41
Do u know anyone who went this route? Seems like a somewhat reasonable path towards doing this if u are ok with hibernating for 3 mo out of the year
simon
2020-11-02 21:00
I don?t know anyone who has gone this route. I?ve read blogs of people who have moved there full-time, however, and it seems reasonably easy and a pretty interesting place to live too.
buynps.org
2020-11-02 21:02
Seems pretty underground too, right? Never heard of St Helenian
simon
2020-11-02 21:19
Yeah it?s definitely not a mainstream destination. I recommend listening to the Extremities podcast, they have a number of episodes that were recorded on the island.
simon
2020-11-02 21:21
@sergiy.shlykov You don?t even need to hibernate, St Helena will be connected to a Google-owned undersea fiber cable in 2021 giving it what will likely be the highest internet speeds per capita in the world. They are also famous for their coffee, supposedly one of the best in the world. Good combination for a work-focused stay.
frederic.scheffer
2020-11-07 07:40
Which countries can you be officially working from and still have 0% tax? (With a US LLC or UK LLP or HK TLD)
Can you have place of management in Panama and pay 0% tax?
Bahamas?
Cayman islands?
Others?
Thanks!
danz
2020-11-07 08:18
Many, look for territorial taxation countries
frederic.scheffer
2020-11-07 09:12
Territorial taxation = foreign income not taxed. If I am not mistaken, if you work from that country officially, then your place of management is in that country => you need to pay tax there.
frederic.scheffer
2020-11-07 09:13
I am talking about countries where you can clearly work from there as a digital nomad, and legally pay 0%. Without having to pretend you are not working from that country.
simon
2020-11-07 20:22
@frederic.scheffer If you want to live / work full time from that country, you?ll have a go with a true tax haven. There?s a bunch in the Caribbean, some Pacific countries as well. The UAE is also an option.
frederic.scheffer
2020-11-08 04:24
@simon thanks. Yes, don't want to get challenged for "where the work has been done". And also looking at the option of selling my business and legally pay 0% on that sale.
buynps.org
2020-11-08 04:39
@simon which option there is the best to get a tax certificate? because some places like cayman islands don?t offer this right?
simon
2020-11-08 15:00
@kevin.ogier The UAE is the easiest option at the moment, from both a visa and tax certificate perspective.
frederic.scheffer
2020-11-09 04:55
@simon there has been no changes recently? UAE is still a solid option to legally work from as director of a HK LTD or UK LLP or US LLC, and pay 0% tax on salaries/dividends/sales of assets/shares ?
Thanks a lot. Dont want to be in a grey zone
simon
2020-11-09 13:51
@frederic.scheffer They recently introduced a remote work visa that costs only 287 USD and is valid for a year (much better deal compared with the freezone company route). https://www.visitdubai.com/en/business-in-dubai/dubai-for-business/work-remotely-from-dubai
simon
2020-11-09 13:53
There?s no individual taxation in the UAE and no corporate taxation for non-oil businesses.
frederic.scheffer
2020-11-09 13:55
@simon that is amazing. Looks like my 2022 plan. Thanks a lot
sergiy.shlykov
2020-11-09 14:44
As per FAQ, theres a $5k USD monthly income requirement when applying. Could not see a minimum stay requirement on the landing page. Can this one be used as a paper residency much like Panama?s? @simon
mb
2020-11-09 15:43
Curious about the actual residency required. I suppose one has to have real accommodation and stay in the country for a certain amount of time? E.g. if you don't will it affect a possible renewal the following year?
mb
2020-11-09 15:45
So would that mean that in theory you'd go there at least twice a year?
tiagomdreganha
2020-11-09 15:50
One visit every 6 months has always been the case for Dubai, it's not specific to the remote work visa
buynps.org
2020-11-09 16:58
@simon this looks like a great program, simple to get too. any idea about getting a tax certificate, what?s needed?
mb
2020-11-09 16:59
I'm currently trying to see if I take up a tax residency/PE in order to run a holding with subsidiary companies.
? My main activities are mixed bag of design/dev services, e-commerce websites selling (digital) drop-shipped goods and crypto trading/staking.
? Revenue >100K - 200K
? Prefer residency somewhere in the EU with social security. Otherwise open for options outside the EU.
? It is desirable to hold IP assets in a holding.
? I'm currently officially not a resident anywhere (perpetual traveller) with an EU passport and plan to keep traveling/stay low.
In order to minimise any tax liabilities while being in a grey zone, I'd like to plan for a tax residency.
Some options I have investigated (not complete and correct me where I have it wrong) (thread :point_down:)
mb
2020-11-09 17:00
? Portugal (NHR) - Have been eye-ing the program for a couple of years now. I'm not sure if I can get away with living most of the time outside of the country while managing my Holding and get a salary/dividends/capital gains from it tax free. Seems like a lot of gotchas? Also afraid it might end up being a tax trap, whenever I want to exit the country at some point (EU exit tax?). If all of this wasn't a concern, I like the fact it's still in Europe and I happen to have family there and speak/read Portuguese which potentially could be helpful for several reasons.
? Czech Republic - 19% corporate tax/15% dividend tax (15% capital gains or 0% if asset held for >3 years). When routing some revenue through a self-employed trader license, you'd effectively pay 12.6% tax (incl. social security etc) with 48K USD income or 20% with 100K USD. Accounting services last I checked weren't too cheap and doesn't look like it's as easy as managing things online like Estonia. An appt. can be rent for relatively cheap.
? Malta - Seemed quite involved with the 6/7 rule to get an effective rate of 5%. Also as I read here you'd have to pay at least 5K a year. Also not sure on prices for accounting. A plus is the English language and flights from Europe being affordable. Otherwise it seems doable to not live there while remaining tax resident on paper?
? Cyprus - 60 day rule - 12.5% corporate tax and no tax on dividends. Lax enforcement of foreign owned companies? Although not an issue given I could run the holding from Cyprus and e.g. send profits from Estonian subsidiaries to the Cyprus holding? - Get 19.5K euro tax free and pay social security on that amount. Otherwise travel not too expensive from Europe but perhaps accounting services more expensive?
? Bulgaria - 10% corp. tax / 5% on dividends distribution - Capital gains 10%. Setting up a company inexpensive - not sure on accounting costs. Travel/renting an appt is relatively cheap.
? Estonia - 20% tax on distributed profits, no dividend tax on the dividends from the Estonian company. In case of regular dividends paid, corporate income tax of 14/86. Lots of online services at affordable prices. Simon told me the yearly maintenance costs can be low if you decide to do things yourself online. Has a holding regime. Perfect for tax planning and re-investing profits. Not sure yet how I'd come out on the social security costs. It's in Europe and travel is easy.
? Lithuania - 5% corp. tax for <300K EURO gross annual revenues. 0% the first year. Dividends taxed at 15%. Capital gains 15%/20%.
? Irish / UK non-dom (remittance based) ?
Otherwise, the direct alternatives I've seen outside Europe mentioned here:
? Panama residency - 0% tax on foreign income? Don't need to travel there often it seems? I understand/speak Spanish. Otherwise, low reputation.
? Dubai remote worker visa (1 yr) - Low costs for the visa itself and needs 2 visits a year. I understand I need to rent accommodation there? Wonder how costs would compare with the other options, taking into accounts things like accounting/accommodation/flights.
? Hong Kong - Difficult? Expensive in comparison? Otherwise, better reputation?
Appreciate your thoughts here. I'm currently undecided. I see advantages in terms of a simple setup like Estonia and/or Cyprus. Portugal NHR seems elaborate and tricky. But curious if you are better informed to give better advice. Thank you.
simon
2020-11-09 18:48
@kevin.ogier you need to spend at least six months every year to qualify for a tax certificate.
bartek
2020-11-10 07:33
Don't know your preferences, but don't look only for taxes when you plan to get a tax residency as you will have to spend more than half a year in that place. For me, when I had to choose, I also take into a calculation the weather, climate in general. As much as I love for example Czech or Estonia, weather there is a no go for me... as Portugal is on top of your list, it may be the best route to follow, but again, it's very individual. Malta has also nice weather but it is a place where after shorter than 1 month you have nothing to do, nowhere to go... Cyprus could be good as it has only 60d of requirement to stay, but humidity there and temperatures, oh man.
Generally tax-wise, all of those options are nice (maybe in CZ you won't save as much as in the others), so it really depends on other factors :wink:
mb
2020-11-10 08:43
Thank you for sharing @bartek . To be frank, my intention is not to actually live in any of these countries, but only stay the minimum amount of time / or at least pass residency on paper.
bartek
2020-11-10 08:45
so Cyprus will be the best probably, because of 60d requirement, but you have to be careful to not 'pass' tax residency requirements in any other country :wink:
just make sure you can actually handle 60d in Cyprus :wink:
mb
2020-11-10 08:47
Yeah, the 60d requirement sounds ideal. I guess in case you don't actually spend 60 days in Cyprus, the scenario you'd get in trouble is any other country challenges your tax residency? Which then you'd have to proof your Cyprus residency?
mb
2020-11-10 08:50
Otherwise, also not a big issue to actually stay there 60 days in a year..
bartek
2020-11-10 08:52
hmm I think you have to stay 60d to get tax residency there and it is really easy to proof, as when you arrive od departure by the plane, they will check your passport etc.
Then if you have tax residency in Cyprus AND you won't pass requirements to have tax residency elsewhere, you are safe and no other country can 'touch you' with their claims to pay taxes there, as you are resident in Cyprus and you paid taxes there
bartek
2020-11-10 08:53
regarding stay for 60 days... it just seems like that :stuck_out_tongue: for me Cyprus even for 3 weeks was very fatiguing
bartek
2020-11-10 08:54
but I personally don't like that much heat, humidity and basically no pavements and nowhere to go really
mb
2020-11-10 09:03
That's my same thinking of not actually wanting to reside there.
frederic.scheffer
2020-11-10 11:34
@simon concerning UAE, with a Offshore status HK LTD company, would that company get PE in UAE if I live in the UAE and manage it from there? If it gets PE in UAE, does it need to charge the 5% UAE VAT to customers? This UAE VAT appeared around 2 years ago
bountybairn
2020-11-10 12:25
I would say Cyprus also, depends on what kind of lifestyle you want. There is a lot here but some of life is just typical island stuff - postal service a bit slow, getting stuff delivered online sometimes not possible / takes a week, bureaucratic public services.
On the plus side, its warm, lots of outdoor stuff to do (Beaches and Skiing / Snowboarding about 45 minutes apart), very diverse communities,
Accountant depending on transactions would cost around ?2400 per year. Not cheap but you can easily save this in tax (IP based profits are 0%, Trading 12.5%) Formation of a Cypriot holding company is c. ?1400 to do via an Agent. (which is sort of necessary unless you can read greek)
ggiampieri
2020-11-10 15:00
If you care about flights, have a look at Wizz air next year flight plan to/from Abu Dhabi. For example Milan to Abu Dhabi one way stopover in Sofia, from 45?. And from Dubai to Manila 170? round trip with Cebu.
mb
2020-11-10 15:13
Yeah I see Sofia -> Abu Dhabi return ticket 60 euros.
simon
2020-11-10 15:20
@frederic.scheffer In almost any cases, running a company from a country different from where it is registered will create a PE. As for VAT, it only applies locally (sales to local clients).
koshis
2020-11-11 12:55
If you are really concerned about your "home" country challenging you on the companies PE, you could establish a registered branch office in one of the UAE freezones. Different industry and freezones have different licensing and fees but it would give you the piece of paper you would need. Also AFAIK the VAT for UAE only applies if you are selling to UAE customers
burrup.lambert
2020-11-12 23:51
maxsuur
2020-11-13 15:36
Great news
burrup.lambert
2020-11-13 19:10
Looks like it's still only 22% instead of 44% but it's something.
benjamin
2020-11-15 12:51
22% not bad, not good. Good news if you want to live full-time in Greece. I wonder what countries will be next. Seems like competition is heating up
timorshait
2020-11-18 19:47
Hey all, I?ve a question about taxation/residency. Do you need to become a tax resident (reside for 183+ days) in order to have the country?s taxation rules apply to you? For example, If I'd go to Singapore (where no capital gains apply), register at the their tax office and spend 3-4 months there doing stock investing. Will I enjoy the no tax on capital gains? Or you first need to reside 6 months before being able to do this? Of course any regular income is taxable and paid as usual.
simon
2020-11-18 20:23
@timorshait Technically, local rules usually apply regardless of how long you stay / what your immigration status is.
In reality, you won?t be able to register for a local tax ID unless you have a good reason for it (work permit, local company etc). Even if you were able to get a local tax ID, it would be risky to file a local return that reports income if you were there as a tourist (no work permit). Without filing a local tax return you wouldn?t be able to claim treaty benefits in your country of tax residency and would have to report your income there. Also, do note that only income that can be attributed to the country you are visiting would qualify.
timorshait
2020-11-18 20:31
Thanks @simon, that?s now clear. I?ll expand on this notion and ask how will the following scenario work, with different circumstances but similar principal:
In Portugal (currently) there?s no tax on cryptocurrency, as it?s treated as a regular currency. And so, you can convert crypto to fiat freely. If I hold crypto, and would like to convert it to fiat in Portugal, can I move there and register for a local tax ID, and then convert the crypto? Will I be able to do that as soon as I get a hold of my tax ID? I?ve European passport which allows me to register and work there If I wish to do so. Also there?s no issue for me to stay longer than 6 months and become a tax resident for the rest of the year. The main thing I?m looking for is ability to realise crypto profits tax-free with a fairly short amount of time.
mb
2020-11-18 20:38
As for Portugal, was briefly looking into it myself:
https://cointelegraph.com/news/no-tax-for-you-why-crypto-traders-and-miners-might-head-to-portugal
```"The sale of Bitcoins is not taxable under IRS in relation to the Portuguese tax system, namely within the scope of the category E (capitals) or G (gains), except when, due to its habituality, it constitutes a professional or business activity of the taxpayer, in which case it will be taxed in accordance with category B."```
```To put it simply, a casual retail trader doesn't need to pay taxes for these trades. However, if you're a company trading Bitcoin as a service or for yourself, or if you are an individual who earns your income from trading activities, you need to pay taxes. When it comes to salaries being paid in Bitcoin or crypto, these are fully taxed the same as they would be with any other currency. But not all countries make it as easy to receive salaries in crypto, as Igor Samohin, a product manager at PaymentX, told Cointelegraph:```
mb
2020-11-18 20:40
So my understanding is, if the source of your crypto is from professional services (while tax resident in Portugal) then it's taxed. Otherwise, if you already had the crypto and *then* become tax resident in Portugal, I'd say it wouldn't be taxed. But that's just my brief understand. Curious on thoughts of others here.
timorshait
2020-11-18 20:43
Thanks for this @mb. I had a look on this article as well, and I understood this the same. There are currently two main countries I might look on moving to, one is Portugal, and the other is Germany. I hold a German citizenship, which I'm not sure if is a benefit or a merit in this situation. With Germany you need to have the crypto in your possession for at least 12 months for it to be tax free. That's not an issue, but I'm not sure if you need to first be in Germany for a year, or it can be realised as soon as you obtain a tax ID, considering that you've held the crypto for longer than 12 months. I'm trying to plan a few steps ahead which I assume you do too.
mb
2020-11-18 20:44
Is the crypto 'registered' or just sitting in some 'anonymous' wallet?
simon
2020-11-18 20:44
You have to be careful if your assets were bought before your move as some countries will tax gains realised from the sale of assets bought before moving abroad (the UK has a five year rule for example).
mb
2020-11-18 20:45
I wonder, if it is 'unregistered' and you become tax resident of either Germany or Portugal, and you suddenly 'declare it', if it effectively will be seen as income.
timorshait
2020-11-18 20:45
What do you mean as 'registered' crypto?
mb
2020-11-18 20:45
In Germany, if you hold the crypto asset(s) for longer than 12 months, you don't pay tax on any capital gains. Which is a distinction of course
mb
2020-11-18 20:46
I mean are you officially resident of a country?
timorshait
2020-11-18 20:46
@simon the crypto assets were bought after I've left the UK, and after the date I'm applying for a split year treatment. I hope that in this case it will be ok?
mb
2020-11-18 20:46
Do they know you hold those crypto assets. I.e. have you declared them?
timorshait
2020-11-18 20:47
I am not a resident at the moment, and the crypto assets have not been declared. They have only been bought, but not traded with.
mb
2020-11-18 20:49
I see, so the question then is, if you were to register in Germany/Portugal with your existing crypto assets (as your declared income), will they ask questions of where the wealth comes from?
I'm actually in a similar situation, although, I don't plan to convert my crypto to fiat anytime soon.
mb
2020-11-18 20:49
While being a perpetual traveller that is.
mb
2020-11-18 20:50
Portugal has been brought up a couple of times to me. Including a German lawyer saying that she sees a lot of people going to Portugal for that reason. Just wary on the details and how things are really in practice.
timorshait
2020-11-18 20:51
I don't plan on realising the profits as well anytime soon, perhaps in a year's time it'll be worth considering, but planning ahead can always help. I'm not sure if they would ask any questions regarding this, it's definitely worth inspecting to make sure there will be no potential issues
simon
2020-11-18 20:51
If they were bought after you left the UK, you?ll be fine
tobievandyk
2020-11-19 00:38
Hi @simon. Just curious how you would maintain a tax residency in Malaysia without living there. Do you have to spend 90 days a year there?
simon
2020-11-19 00:56
For Malaysia you should spend 182+ days every second year to maintain tax residency (for example: 182+ days during year one, 1 day during year two, 182+ days during year three etc).
bobriakov.igor
2020-11-25 10:06
recently I've spotted the comment in Reddit regarding 'foreign source income" being tax-free, if remitted in a next year, and the guy said this rule is limited to passive income only(dividends, rental income, pensions, etc). - https://www.reddit.com/r/digitalnomad/comments/jx7wav/best_way_to_pay_no_tax_as_a_digital_nomad/gcx0h2x?utm_source=share&utm_medium=web2x&context=3
can anyone comment on this topic, i.e. in what cases one can have tax-free 'foreign source income' in Thailand?
simon
2020-11-25 16:21
@bobriakov.igor All foreign sourced income can be exempt in Thailand if the remittance rules are followed. It?s important to understand, however, that foreign sourced refers to work performed outside of Thailand (or income that arise outside of Thailand), not foreign company / clients. Someone working from Thailand, even if via a foreign company and for foreign clients, will be liable for Thai taxation.
marziovit
2020-11-28 13:00
Does anybody know which countries in EU treat UK LLP / Canadian LLP as opaque entities?
mb
2020-11-28 13:21
In the Netherlands it depends. Try translating this one https://ondernemersplein.kvk.nl/limited-liability-partnership-llp/ (sorry i am on mobile now)
marziovit
2020-11-28 13:29
@mb thanks!
marziovit
2020-11-28 13:35
This is page is awesome (even if incomplete) https://www.gov.uk/hmrc-internal-manuals/international-manual/intm180030
marziovit
2020-11-28 13:36
@simon do you know if CA LLP is treated as transparent or opaque in UK? I'm asking because Jersey and Kazakstan LLP are treated as opaque but US LLP as transparent?
simon
2020-11-28 16:19
@marziovit They are treated as transparent, same for regular partnerships and LPs.
The list above is indeed useful but should not be treated as definitive as for example, US LLCs can be deemed transparent in the UK if they make the election (as per Anson vs HMRC).
marziovit
2020-11-28 16:33
@simon thanks! Is there a way to find out which countries treat UK LLP or CA LLP as opaque?
simon
2020-11-28 16:52
Not directly, but you can find out how countries treat their own equivalents (that will give you a good idea how UK and CA LLPs would be treated).
For example, Denmark treats equivalent entities as transparent: https://read.oecd-ilibrary.org/taxation/the-application-of-the-oecd-model-tax-convention-to-partnerships_9789264173316-en#page85
While Belgium has no concept of tax transparency: https://read.oecd-ilibrary.org/taxation/the-application-of-the-oecd-model-tax-convention-to-partnerships_9789264173316-en#page78
marziovit
2020-11-28 17:05
@simon this is fucking great! In the BC LLP partnership act it says that the LLP could be named as "Société à Responsabilité Limitée" so is it safe to expect that in France it will be treated as a limited liability company?
simon
2020-11-28 17:27
@marziovit It?s fairly safe to assume so, and it?s also safe to assume a BC LP would be treated as a SCS.
frederic.scheffer
2020-11-29 11:59
Interesting. And in Dubai (UAE)? Any idea? And Panama?
marziovit
2020-11-29 12:35
@frederic.scheffer i would say that both in UAE and Panama it really doesn't matter because one is a 0% tax country and in the other foreign income is exempt.
marziovit
2020-11-29 12:41
@simon do you know if those rules are still relevant today? I'm asking because the book is from 1999, in the meantime world has changed. For example i found https://www.ibfd.org/Consultancy-Research/Tax-Treatment-Foreign-Entities-Germany-and-Spain that talks about Spain and states the opposite of what i found in the OECD book.
omocha_10
2020-11-29 13:15
How does Panama/UAE would work for a perpetual traveler who doesn?t want to spend much time in those countries as a tax residence?
omocha_10
2020-11-29 13:16
Or for the case, Paraguay too...
marziovit
2020-11-29 16:59
Both would work just fine, to keep the residency in UAE you will have to show up once every 6 months and in Panama once every 2 years.
ivo
2020-11-29 17:08
@marziovit resident ? tax resident
marziovit
2020-11-29 17:14
@ivo right, to get a tax residency certificate in UAE you will have to spend 183 days there, in Panama not quite sure
omocha_10
2020-11-29 19:18
In theory it n Panama I understand you must spend time there, but as a perpetual traveler not sure how it would be in reality...
frederic.scheffer
2020-11-29 20:03
Can you really run say a UK LLP or US LLC from Panama and thats it, no tax on all that income?
frederic.scheffer
2020-11-29 20:03
I thought it was not so straight forward
frederic.scheffer
2020-11-29 20:03
I have no problem to be based either in UAE or Panama for 6months a year.
felix
2020-11-29 20:23
Hi everyone! I am researching for a while the *perfect personal tax setup for a perpetual traveler* (someone who is staying for 2-3 months in 4-5 countries a year, but has a tax-free home base somewhere and is only tax liable there). I had residences in different places around the world, but never really found the perfect fit in combination with the UK LLP/US LLC setup. Somehow it was always in the grey zone..
I am looking at the following variables (please add yours if I am missing out on anything):
? Foreign sourced personal income must be excluded even when I am in the country of residence/tax residence and working.
? Tax residency must be relatively easy to obtain and maintain and in a reasonable time period (as mentioned Panama requires 6/12 months a year which is quite long if you plan to travel)
? Grey zone scheme such as flying under the radar, etc. are not an option. I would like to build something that has a certain foundation and legal stability
? Location of tax residency/residence can be anywhere in the world
Until now it looks like only Dubai checks all the boxes. Singapore seems to tax foreign sourced personal income when your company has a corporate tax rate below 15% / such as UK LLP or US LLC). I am curious about your suggestions and how you would ?geek out? this model.
simon
2020-11-29 20:47
@felix Dubai requires 6 months every year for tax residency, the visit once every six months thing is only to keep the residency visa active.
It?s also important to note that if you work from a territorial taxation country, your income will be deemed local and usually will be liable to tax. Working tax-free while in your country or tax residency is only possible in true tax havens (places like Cayman, UAE etc) or when making use of special exemptions (HK, Malaysia and Singapore).
If that?s alright with you (paying local tax on your local income), Japan is probably going to be your best option. Thanks to the startup visa multiple cities offer, it?s fairly easy to become a long-term resident and there?s no physical presence requirement for tax residency (you only need to have a home available to you in Japan year round). Japan taxes non-permanent residents on their Japanese income only.
omocha_10
2020-11-29 20:47
What about if you want to withdraw money from your US LLC/ UK LLP while being resident of Malta/Panama/Paraguay?
Do you have to pay any taxes?
I believe Malta has a 5.000 euro minimum tax...
simon
2020-11-29 20:48
@omocha_10 If you are a Panama tax resident but performed no work while in Panama, you will pay no Panama tax.
simon
2020-11-29 20:49
Same for most other territorial taxation countries (Malta isn?t a territorial taxation country).
omocha_10
2020-11-29 20:50
How many days a year a perpetual traveler must stay in Malta/Panama/Paraguay if he wants to be a tax resident in those countries?
simon
2020-11-29 20:51
In Europe, territorial taxation countries include the UK and Ireland (if you file as non-dom). Switzerland too but they have a high minimum tax.
simon
2020-11-29 20:53
Malta isn?t a good option for most. As for Panama, there?s no physical presence requirement for permanent residents with local ties (such as Friendly Nations visa holders). Paraguay is 120 days.
omocha_10
2020-11-29 20:54
Why Malta isn?t a good option? How do you become a non-dom in Ireland or UK while having EU citizenship?
simon
2020-11-29 21:00
@omocha_10 Malta has high tax rates (not to mention a minimum tax), requires local ties and offers no benefits over similar non-dom regimes in Europe (such as the UK?s).
As the name implies, you must be deemed to be non-domiciled in the UK to qualify for non-dom taxation. In short, the UK must not be your permanent home. As a non-dom, you only pay UK tax on your UK income and income you remit to the UK (similar to Singapore).
felix
2020-11-29 21:01
Hi Simon! Thank you a ton for your answer. I think my visa in Dubai was valid for 24 months when I had the employment visa in Dubai. Not sure how that affects the tax residency status though.
Do you have additional information or links on HK, Malaysia or SG? Japan sounds like a great option to consider. I will definitely check that out.
omocha_10
2020-11-29 21:09
But if you are a non dom in UK, but you need not to have your permanent home over there, how do you avoid not being ?reclaimed? as a tax resident from other countries?
While being a non dom in UK how would you set up an investing brokerage account or Internet bussines? In a US LLC?
simon
2020-11-29 21:16
You need to spend six months in the UAE every year to qualify as a tax resident. The length of your visa doesn?t matter for tax purposes.
For HK, Malaysia and Singapore, individuals are exempt from local taxation if they limit their stays to under 60 days annually (under the 60 days rule). You can only realistically make use of the exemption in HK and Malaysia as they are the only two that allow tax residency qualification with under 60 days spent in the country (in Malaysia, only every second year).
simon
2020-11-29 21:19
@omocha_10 You simply have to avoid qualifying in any other countries.
A US LLC would work as would Canadian transparent entities, IBCs etc.
omocha_10
2020-11-29 21:23
And you can withdraw money from the brokerage account/internet business from the LLC in form of salary or dividends paying 0% tax?
simon
2020-11-29 21:29
You can transfer profits to yourself from the company account tax-free (LLCs cannot pay dividends and paying yourself a salary doesn?t make sense in this context). Your accounts must all be foreign (non-UK) and you cannot bring in profits during the year they were received in (you should only spend your savings when in the UK, to avoid triggering remittance taxation).
omocha_10
2020-11-30 00:11
And for things like driving license, buying and insurance a car, which country will be the residence, UK?
Mobile number UK too?
Sounds very good.
Ireland would be the same?
simon
2020-11-30 00:29
You can get a UK license, car, mobile etc. Same for Ireland
yaron.been
2020-11-30 06:14
@simon
Can you elaborate a bit about the requirements for getting a visa for Japan?
Do you know of anybody who has done the process?
simon
2020-11-30 06:18
This guide covers the basics:
https://medium.com/@sasha.kaverina/how-to-get-a-startup-visa-to-build-a-company-in-japan-a-complete-guide-99c890d58c02
I plan to apply once the pandemic is over, I love Japan and the tax benefits as a non-permanent resident are excellent.
mb
2020-11-30 07:12
It seems like Ireland is a bit better in terms of the non-dom regime? E.g. the UK one seems limited for 12/14 years? And if you're a EU citizen, with brexit it will be easier to travel to Ireland?
mb
2020-11-30 07:41
mb
2020-11-30 07:42
"Why not just stay in EU and move to Ireland and get the non-dom status there? The non-dom status there is better as its indefinite. You can move there also freely as an EU citizen which maybe not possible in UK after brexit. We also don't know what is happening with UK after brexit. The UK tax laws will almost certainly change and a push to have non-doms pay the non-dom fee earlier into their residency is a possibility.
Please note in general non-dom status is suited to passive income earned abroad. So acting as a shareholder and receiving dividends offshore is fine. However for offshore active income and acting a director you will go to war with HMRC. You are best to then get approval from HMRC of your tax plans via a local tax advisor if you are serious. Or simple ask a tax advisor to confirm your model is correct for non-dom status as CFC rules are a pain."
rtiagm
2020-11-30 08:55
I think the business needs to be somewhat connected with Japan and then there?s the renewal process which is unclear. With a 5 million yen business visa they expect your company to be making a certain amount after a few years, although that is somewhat subjective like many things in Japan. Also after 5 years you are taxed on your worldwide income. At least that?s how it worked in recent past.
jason
2020-11-30 20:44
I'm working on my paperwork for the Panama FN visa right now, hoping to use it as my tax residency flag in the future..
jason
2020-11-30 20:45
I'm nowhere near a tax expert though.. and I'm honestly making a lot of assumptions about how all this works
simon
2020-11-30 21:02
@mb Non-dom status should be used in a similar way to tax residency in a territorial taxation country. No work should ever be performed while in the country, to ensure there is never any such issues.
mb
2020-11-30 21:20
Yes, was just reading about that specific aspect. So in that case. As a non-dom, you should provide documentation/proof that the work was done abroad? Can it work in practice?
simon
2020-11-30 22:32
@mb You do not report foreign-sourced income, only remitted income / UK income. I know people that are UK non-dom so it certainly works, at least if your work allows for it.
burrup.lambert
2020-11-30 22:47
Let us know how you go Jason! I wasn't going to bother on another residency until after quarantine and travelling is easier but maybe I'll start too.
p.rawson100
2020-11-30 22:50
@simon Re Panama, if you held the FNV, what would be sufficient to demonstrate local ties in order to qualify as tax resident?
simon
2020-11-30 23:22
This will vary on a case by case basis but usually a permanent address, local bank accounts, phone number etc. It also helps if some of your trips start / end in Panama (to make it look like it?s your home)
jason
2020-11-30 23:38
@simon do you know what would trigger a government to start looking into this? For example I'm an Italian citizen who has never lived in Italy (and don't plan to), what would prompt them to even look into someone's tax residency. The consulate would have my registered address on file, but I wouldn't expect them to keep tabs on where i'm spending the majority of my time..
simon
2020-12-01 00:30
@jason If you?ve never filed an Italian tax return, the chances are nil (or close to). Usual triggers include a claim of non-residency, a treaty benefits claim and a tax exemption claim (FEIE for example).
alessio.zazzarini
2020-12-01 04:42
Hello Everyone, I was looking at the NHR program in Portugal. Does anyone know if it is possible to hire an agency that can do the paperwork without travelling there. I can?t travel there because I am stuck in another country due to the Covid.
mb
2020-12-01 05:52
So as long as you:
- Don't remit foreign funds
- Don't do the physical work while in the UK
You simply don't report that income? Wonder if it works the same for managing a non UK company: E.g. being non-dom managing an Estonian company. Even while being abroad when effectively managing it, would the HMRC claim it to be a UK resident company if I'm the sole director?
p.rawson100
2020-12-01 11:19
Thanks Simon. Do you know of any good law firms who could help with the FNV?
eddieringleb
2020-12-02 11:20
I would recommend Cyprus as well, it is more laid back and easy to communicate with the Government. Bulgaria can be tough but its nice as well. Income earned in Portugal from any black listed country will cost you 35% tax as well with a lot of other little things which make it not as great
lu.taglialatela
2020-12-02 11:27
Depends, you need at least a physical address where to register your residence
lu.taglialatela
2020-12-02 11:28
As far as I know there?s no one providing NHR entirely from remote
lu.taglialatela
2020-12-02 11:28
But I?d be glad to be wrong
eddieringleb
2020-12-02 11:32
Hello there you all ; I'm European but a PT and non-resident. Things are getting tougher and am busy setting myself up in Cyprus to have a bit more stability and papers to show. A few flights and no ferries make it very difficult to get there in these times as well. *How and where can I set up a supplement company as a non resident and operate until am settled in Cyprus?* _Thanks_
lu.taglialatela
2020-12-02 11:34
Cyprus providers will be happy to incorporate your company as a nn resident entirely from remote, then, once the storm has passed, you?d be able to get there and modify the company docs with your new Cypriot residency
eddieringleb
2020-12-02 11:37
@lu.taglialatela I have not heard back from my accountant since everything is postponed until Brexit is dealt with. A few places are in lockdown as well which does not help and I would like to get that product on the market right now.
lu.taglialatela
2020-12-02 11:40
I?m still setting up companies Eddie through my local accountants, maybe it takes more than usual but we usually get things done
lu.taglialatela
2020-12-02 11:41
I?m not sure I?m allowed to share my contact here, I guess You?ve to ask Simon first if I can
felix
2020-12-03 12:51
Thank you a lot for sharing this Simon! Really insightful and helpful!
stolzlos
2020-12-03 13:56
@simon In regard to your statement above *"Japan taxes non-permanent residents on their Japanese income only."*. As far as I know that is true only for non-residents (<1yr) but not for residents that are non-permanent (<5yrs). Remitted income is taxed for a RNP as far as I can see. Can you confirm?
stolzlos
2020-12-03 13:58
further, lets assume one wanted to go for RNP and live in Japan, is there an approach to avoid taxes except build up savings in order to avoid remittance?
simon
2020-12-03 15:13
@stolzlos Non-permanent residents are only taxed on their Japanese income + remitted income.
https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-japanhighlights-2020.pdf?nc=1
The key to avoid excessive taxation in cases like this is to limit stays to a few months annually (you?ll only be taxed on the income you generate while in the country) and to avoid remitting income (only spend from your savings / money earned in previous fiscal years).
stolzlos
2020-12-03 15:53
thanks for the link and the information. One question to your statement *"you?ll only be taxed on the income you generate while in the country".*
If so then it is obvious that you can take some time abroad to generate some income and return. But how is this possible since you do not lose your NPR status even if you leave the country? From the deloitte link this is not clear to me.
bountybairn
2020-12-03 19:18
@eddieringleb everything in Cyprus is normal to be honest, there is a curfew and restaurants have been closed to sit in customers, but everything else is open including. which advisers are you dealing with ?
I get the point about waiting for Brexit as there could be a useful gap in a no deal scenario if you have UK customers but are working in the EU. This being said it didn't deter me, I just went ahead as I wanted to use the DTA ASAP to reduce my UK liabilities. It was Chase Buchnanan tax who i started dealing with but then found my own local agents to move forward with.
bountybairn
2020-12-03 19:18
N.B The restaraunts indoor malls etc are back open now, and never even closed in some parts of the island.
alessio.zazzarini
2020-12-04 05:06
@lu.taglialatela Do you know any agency that can help me to sort out the Cyprus residency? Or At least to ask some info
bountybairn
2020-12-04 06:59
@alessio.zazzarini what info do you need?
rtiagm
2020-12-04 08:45
@simon How would you maintain the visa if you just spend a few months in Japan to never become a permanent tax resident ?
eddieringleb
2020-12-04 15:32
@lu.taglialatela @bountybairn thanks guys. I'm using a local accountant and hence not as quick I guess. Just heard 2 days ago that the company name got approved and set up should be all in the box in time b4 Christmas.
simon
2020-12-04 21:33
There is no physical presence requirement in Japan for tax residency, the visa can also be renewed indefinitely as long as you meet the requirements (physical presence not being one of them). From what I was told, the first year is very easy and then you must switch to a business manager visa which requires showing proof of share capital payment of at least 5 million JPY (a little under 50k USD / 40k EUR) and a rental agreement (WeWork is fine).
simon
2020-12-04 21:35
After five years you can apply for permanent residency, which grants you rights similar to Japanese citizens (except for voting and the right to apply for a passport).
rtiagm
2020-12-05 00:45
There might not be physical presence requirements but your company needs to be achieve some revenue benchmarks after 3 years to 4 years, 10M yen or so or else they might not renew the visa.
rtiagm
2020-12-05 00:48
Japan also considers you a permanent tax resident if you resided the last 5 years out of 10 in Japan. Unsure if having the business manager visa and spending less than 6 months every year would trigger the residency rule.
simon
2020-12-05 01:09
@rtiagm I don?t plan to stay long enough to qualify for PR (I?m thinking 2-3 years).
rtiagm
2020-12-05 01:51
@simon got it.
stolzlos
2020-12-05 17:56
@simon I know that this may be a newbie question but I still do not get how you can work around the taxation on remittance issue. Lets say I trade via an LLC and generate income and I do that while being an NPR and also residing there. As long as I don't remit these profits into the country, no tax, that much is clear. If I leave Japan for lets say 3 months, generate income, come back to Japan and remit that profit, would that also not be taxed because I was not in Japan at that time? Is it that simple? Thanks a lot.
simon
2020-12-05 18:48
@stolzlos You should not remit any income to Japan, even foreign income. You should live off your savings / income from previous fiscal years when in the country. As long as you do that, you can live there tax-free.
stolzlos
2020-12-06 17:06
@simon understood. Thanks a lot!
alessio.zazzarini
2020-12-07 14:51
Hi Paul! thanks for tagging me. I would need to get my personal taxation sorted out
alessio.zazzarini
2020-12-07 14:51
I am thinking about Portugal
alessio.zazzarini
2020-12-07 14:52
I am european, but currently I am locked in Vietnam
alessio.zazzarini
2020-12-07 14:52
I am trying to find a solution
alessio.zazzarini
2020-12-07 14:52
Do you have any suggestions?
bountybairn
2020-12-08 13:16
I was meaning in relation to Cyprus residency
stolzlos
2020-12-12 19:48
@simon one more question to the above discussion. You say "there?s no physical presence requirement for tax residency (you only need to have a home available to you in Japan year round)". Lets say I have that home available all the time, what happens if I stay in another country, for more than 6 months? Does tax residency not change? Thanks!
simon
2020-12-12 20:19
Most countries will deem you a tax resident if you stay more than 6 months. In such a case, you?d have to refer to the tax treaty between Japan and the country you spent > 6 months to determine your tax residency. If there is no tax treaty, you could face double taxation (of your Japanese income, as Japan won?t tax your foreign income anyway).
stolzlos
2020-12-12 20:21
thanks. Much appreciated.
stolzlos
2020-12-17 08:24
I understand that for tax reasons it is important to split banking, residence, company, etc across multiple countries. Is it a big problem if I use an LLC with a US brokerage? Of course I would not live in the US and also have no customers in the US. Banking I would likely do in Singapore.
simon
2020-12-17 15:08
@stolzlos I don?t see any problems with the LLC + US brokerage account combo. As per the IRS:
?NOTE: If your only U.S. business activity is trading in stocks, securities, or commodities (including hedging transactions) through a U.S. resident broker or other agent, you are NOT engaged in a trade or business in the United States.?
https://www.irs.gov/individuals/international-taxpayers/effectively-connected-income-eci
guillaume.hucheloup
2020-12-19 00:52
Hi everybody and @simon. I just ordered a UK LLP/LLC package and I would like confirmation to my situation.
I'm spending more than 183 days a year in Thailand, and have my economic interests there so I am a tax resident there.
Foreign income in Thailand isn't taxed if it isn't remitted in Thailand in the same calendar year,
So with my UK LLP/LLC Any income that is made in 2021 that I don't bring in my personal Thai account that year (=that I don't spend) would be tax free from 2022. Correct ? I think that's the case but I just would love to hear a confirmation for this. I see that the Thaï corporate tax rate is 20%, but as I have a corporation in the UK, and I pay myself personal income, I am tax free if that income isn't paid the same year. Did I get it all right ? Blessings to you all
simon
2020-12-19 01:03
@guillaume.hucheloup If you work from Thailand your income will be deemed Thai-sourced and liable to tax there. With that said, Thailand isn?t exactly thorough when it comes to enforcing its rules and there?s no exchange of information in a situation like yours (with an LLP) so you could keep quiet about it, it?s all up to your own risk tolerance. You could also pay yourself only when outside of Thailand, a bit of a grey area but certainly less risky than full non-compliance.
guillaume.hucheloup
2020-12-19 01:06
Thanks @simon. I appreciate your input. I believe that as it is online work, there can be a grey area to when & where I am working. As I will also continue to travel aside from spending 6+ months there, the idea of paying me outside of Thailand seems right. Thanks a lot, looking forward to the incorporation.
guillaume.hucheloup
2020-12-19 01:06
One last thing @simon, When you mean "pay yourself only outside Thailand", does that mean on a non-Thai bank account ?
guillaume.hucheloup
2020-12-19 01:08
Or simply when I am not in the country, but I do remit it on a Thai bank account ?
simon
2020-12-19 01:15
It should be to a non-Thai bank account (ideally you should only spend savings / money earned during previous fiscal years when in Thailand).
If you live in Bangkok, a good option would be to setup an account with Citibank (Citi Singapore, Citi Australia, Citi HK and Citi US are all good options) as you?d then be able to withdraw from Citibank TH ATMs free of charge. Bank of China ATMs are also free if you use a MasterCard (at least they were in February when I last used them).
guillaume.hucheloup
2020-12-19 01:17
Thanks a lot Simon, I will look into all that. Have a good one !
eran.seobest
2020-12-19 06:20
if you don't have a special visa or work permit it might be hard to open a CiTi bank account in Thailand.
simon
2020-12-19 06:25
@eran.seobest I meant a Citi account in another country, as ATM withdrawals are always free for Citi cardholders (for example, you pay no fees if you use a Citi HK card at a Citi TH ATM).
eran.seobest
2020-12-19 06:27
i see, that's a great idea :slightly_smiling_face:
eran.seobest
2020-12-19 06:30
i was lucky to get a Thai Citi bank account with some connections 7 years ago but my friend tried to open one last year and they didn't allow.
eran.seobest
2020-12-19 06:37
but as you recommended in Citi Bank US it was easy :)
benjamin
2020-12-19 13:05
@guillaume.hucheloup it's also a smart idea to remit some money. Say 500k-800k baht and pay tax on it. Having paid a small amount of taxes will help keep your citizenship country off your back if they were to ever challenge you
guillaume.hucheloup
2020-12-19 16:25
@benjamin that's exactly what I have planned. Thanks so much for your input !
guillaume.hucheloup
2020-12-19 17:57
@eran.seobest You mentionned it was easy to open a Citi Bank US account ? Isn't that only for people living in the US ? I'd be interested to know how it's possible for me to open one. I've looked on the Citi website but they ask me for a US zip code. Any help appreciated, I'm a real newbie in banking.
simon
2020-12-19 18:01
It?s easy to open US bank accounts but in most cases a visit to the bank is required (unless you have a SSN / ITIN). Same for US credit cards, fairly easy if you go in person.
guillaume.hucheloup
2020-12-19 18:05
Thanks Simon that's what I'm currently reading. I guess I'll be heading to the States later this year. Are you in Crypto at all @simon ? If yes, do you know if a non-US resident person can go from Crypto to Fiat on a US based platform ? As I am mostly paid in Crypto, I'd need to transfer savings from BTC to USD. I can do that easily in Thailand, I don't know if such an option exists for non US residents with a US credit card. If you have any info that'd be amazing.
guillaume.hucheloup
2020-12-19 18:07
My idea here is to be able to find a banking solution that is non Thai Based, wherever it is, where I can transfer BTC to Fiat in whatever currency so that I keep my Thai account strictly for savings and taxable remitted income.
guillaume.hucheloup
2020-12-19 18:07
I couldn't do that in my home country (France) because then I'd guess they could challenge that I'm a French tax resident
simon
2020-12-19 18:11
There?s a number of US banks that are crypto-friendly, and that support instant transfers from Coinbase. You could also use one of the crypto debit cards (I personally have the http://Crypto.com card, it works fine).
guillaume.hucheloup
2020-12-19 18:16
For that I'd need a US proof of address I guess. I'll look into it. Thanks a lot !
danz
2020-12-20 14:07
You could also do this with an account in Georgia, they seem fine about it
ivo
2020-12-20 17:55
@danz Those times are long gone :confused: It?s worse than in any Western country now.
danz
2020-12-21 09:24
Oh wow, that sucks then, didn't have a problem some time ago, but haven't tried this year
ivo
2020-12-21 09:29
I mean, you may very well have slipped under the radar, but fact is that we had to deal with dozens of account closures this year already. I would advise you not to keep to a lot of funds there, as many folks have been unable to comply with the deadlines of the bank due to their non-existent communication practices.
danz
2020-12-21 13:12
Good to know, thanks for the heads up
vinodgn0088
2020-12-28 05:22
I am using Interactive Brokers *UK* Limited as my stock broker and I mainly invest in _*SGX (Singapore)*_ listed SG company stocks. I am personally tax resident in Spain. When it comes to taxation of capital gains; Which _*DTAA*_ should I consider, Singapore-Spain or UK-Spain?
simon
2020-12-28 05:51
@vinodgn0088 SG-Spain
simon
2020-12-28 05:52
Although Singapore does not have a capital gains tax so this should not be an issue here
simon
2020-12-28 05:53
(you?ll only pay Spanish capital gains tax)
simon
2020-12-28 05:55
And Singapore doesn?t have withholding tax for dividends so you won?t pay any tax there
stolzlos
2020-12-28 19:37
what are possible tax residencies with low capital gains tax that can be picked up within weeks? Currently holding EU passport and tax residency in Germany.
simon
2020-12-28 19:42
@stolzlos At the moment the UAE may well be the easiest option, assuming you don?t mind spending 6 months there in 2021. They have a remote work visa that can be obtained online by sending proof that you earned over 60000+ USD in 2020.
simon
2020-12-28 19:43
Obviously there?s no taxation in the UAE, both at the personal and business level
stolzlos
2020-12-28 19:46
thanks @simon
ivo
2020-12-28 19:46
@stolzlos if you are German citizen as well, you are free to travel into Georgia (just need a negative PCR test). Territorial taxation, so no capital gains on your stock sales. DTA with Germany and you may get a tax residency certificate even staying under 183 days (though the general rule is 183 days, as well).
stolzlos
2020-12-28 19:48
@ivo much appreciated
ivo
2020-12-28 20:03
@stolzlos no worries, lemme know if you need more info (fellow German here who became a tax refugee in Georgia couple years ago).
As a sidenote: German tax laws actually do not require you to obtain a new tax residency in case you renounce the German residency. All you need to do is cut ties with Germany.
stolzlos
2020-12-28 20:28
that is very interesting indeed. Don't they hound you if you don't pay taxes anywhere? I mean, if what you say is right then cutting ties and perpetually travelling staying nowhere more than 183 days would be just as tax effective as taking a favorable tax residence somewhere. Where am I wrong?
ivo
2020-12-28 20:44
You aren?t wrong. You are free to do that.
The Finanzamt may ask you for a proof that you are no longer residing in Germany, but you are not legally required to provide them with a new tax residency certificate.
That being said, not having any other tax residency may be an indication of a center of vital living in Germany. Also, if you leave, you should leave for good. Returning after one or two years, may be considered temporary leave which would trigger a backdated tax residency.
ivo
2020-12-28 20:47
If you want German specific advice, I can recommend you my good friend?s blog Christoph http://staatenlos.ch or https://www.easydigitax.de/. The latter is a German tax advisor for nomads and may provide you with legally binding advice.
stolzlos
2020-12-28 20:54
thanks a lot!
jason
2020-12-29 00:11
@ivo how do you like living in Georgia?
internationalbits
2020-12-29 14:34
ivo is perfectly right, and it's the same for many other EU states other than Germany.
you don't actually *have* to gain a new tax residency anywhere else, you just have to cut "lifestyle" and "financial" ties with your EU citizenship country.
it of course is preferable to gain another friendly tax residency somewhere else for many reasons, especially if you make decent money. but not mandatory in theory, as far as your citizenship country is concerned.
mem1987
2020-12-30 12:37
Do you know of a resource describing low dividend tax in developed countries, as long as shares are in private companies and with a significant portion (say 33, 50, 100% ownership as most of us)? I believe most dividend tax communication is designed towards the public with minuscule ownership in a listed company. Every country I know of have a different set of rules for private company holding but it's not transparent to me.
arthur.vandelaak
2020-12-31 18:36
I think there are no CFC rules in Thailand. So the LLP should be fine.
simon
2020-12-31 18:46
CFC rules only apply to companies that are tax resident of foreign countries though, and usually only to holding companies.
Place of management rules are what apply to active companies and Thailand definitely has those (pretty every countries does).
felix
2021-01-03 14:16
Hi! I currently try to understand the personal taxation scheme in Singapore. About me, resident of Singapore, UK LLP and holding in Panama, sometimes payout to my SG bank account. I have read that foreign income is only taxed when remitted to Singapore. Is there any (legal) way of living tax free in Singapore?
vinodgn0088
2021-01-03 17:35
@felix, If you are managing and working for Panama holding and UK LLP from Singapore, then the income is not foreign income.
simon
2021-01-03 18:22
@felix Assuming your income isn?t generated from Singapore, you can remit it tax-free if you wait for the next fiscal year (it will no longer be deemed income, just savings).
felix
2021-01-04 11:01
Generated from Singapore means that I not physically in Singapore, right?
felix
2021-01-04 11:02
Thank you @vinodgn0088 and @simon
felix
2021-01-04 11:03
So, assume I would earn money while not physically present in Singapore, then afterward be in Singapore and withdraw the cash from the paid out dividends from the previous year. That would work?
felix
2021-01-04 13:43
It seems like overseas income received in SG is *not* taxable. From the IRAS website: _Generally, overseas income received in Singapore by an individual is not taxable and need not be declared in his/her Income Tax Return. This includes overseas income paid into a Singapore bank account._ https://www.iras.gov.sg/IRASHome/Individuals/Locals/Working-Out-Your-Taxes/What-is-Taxable-What-is-Not/Overseas-Income-Received-in-Singapore/#:~:text=Generally%2C%20overseas%20income%20received%20in,into%20a%20Singapore%20bank%20account.
felix
2021-01-04 13:45
To make it taxable the income needs to be:
? received through a partnership in SG
? overseas employment is incidental to Singapore employment
? Employed Overseas on Behalf of the Singapore Government
? You have a trade/business in Singapore and you are carrying on a trade/business overseas which is incidental to your Singapore trade.
felix
2021-01-04 13:47
So assuming the company is foreign, there is no partnership or employment in SG, this looks like the oversea income is not taxable.
mb
2021-01-04 13:51
@felix No effective management issues? E.g. wouldn't the company be regarded Singaporean? Even while being out the country that is.
felix
2021-01-04 13:53
That is a good question if a foreign company would be regarded local if the owner lives in SG. This would in the broadest term match the last bullet point.
felix
2021-01-04 14:01
Generally: A company is a tax resident in Singapore when the control and management of the company is exercised in Singapore.
Also: A company is a Singapore tax resident if the control and management of its business was exercised in Singapore. Where the control and management of a company is exercised is a question of fact. Typically, the *location of the company?s Board of Directors meetings*, during which strategic decisions are made, is a key factor in determining where the control and management is exercised. *Conversely, a company is a non-resident when the control and management of the company is not exercised in Singapore.*
Also No.2: Foreign-owned investment holding companies, with purely passive sources of income or receiving only foreign-sourced income are generally regarded as non-residents because these companies usually act on the instructions of its foreign companies/shareholders.
https://www.iras.gov.sg/irashome/Other-Taxes/Withholding-tax/Non-resident-companies/Tax-Residence-Status-of-a-Company/
simon
2021-01-04 15:52
@felix If no work is performed while physically in Singapore (day to day and managerial), no tax liability will be created there for the company. CFC rules do not apply to territorial taxation countries (so that won?t be an issue either).
As for personal taxation, you won?t have any liability if you perform no paid work while in the country / remit no income from the current fiscal year / do not receive any director compensation from a SG company.
stolzlos
2021-01-04 17:52
@simon so running (for example) a LLC while in SG is basically causing a tax liability but at the same time it is not because there is no paid work and no income is remitted. Correct?
simon
2021-01-04 17:53
@stolzlos Assuming you perform no work while in Singapore, correct. Merely owning a foreign company doesn?t create a tax liability in most territorial taxation countries.
stolzlos
2021-01-04 17:54
so what if I do perform work and keep quiet about it then there should be no problem, right?
stolzlos
2021-01-04 17:55
or is that an issue? I wonder how people manage such an issue.
mb
2021-01-04 17:56
If you do that, you want to make sure you can prove otherwise, once audited, I assume?
simon
2021-01-04 17:57
You could do that but it?s not risk free, especially if you spend significant time in SG.
stolzlos
2021-01-04 17:59
now I finally understood. Thanks @simon @mb
francoisleblanc007
2021-01-05 01:53
Quick question for Canadians and becoming non-resident for tax purposes. Do I get the general process right?
1. Reduce ties to Canada to a bare minimum
2. Get residency in another country (ie: staying 6+ months in Thailand/Georgia to be deemed resident there) and get the proper paperwork
3. File a final return in Canada that same year
After that, you're basically not needed to file taxes in Canada anymore in most cases? (assuming we maintain no ties, no income there, etc.)
Thanks!
@simon @taylorwalkerllc
simon
2021-01-05 02:28
@francoisleblanc007 That?s correct, once the CRA accepts your final return they are unlikely to bother you again (unless they think you?ve moved back to Canada).
francoisleblanc007
2021-01-05 02:32
@simon ty for validation, will be working on this in 2021
buynps.org
2021-01-05 03:31
@francoisleblanc007 the return to let them know you left is in the following year, due April
felix
2021-01-05 07:57
Great! Thank you Simon! The idea is to live in SG and to perform work on the foreign (UK LLP) entity. This would trigger the CFC rules I assume. As for the personal taxation, sure the work in my company could be without payment while in Singapore and then pay out the dividends when abroad and only live on the savings from the previous fiscal year. Not sure how much this constructions is still holding true when maybe the CFC rules are triggered.
felix
2021-01-05 07:57
Thanks @simon and @mb for the input!
stolzlos
2021-01-05 08:01
In regard to the condition *"Reduce ties to Canada to a bare minimum"*, I assume that this is country specific but is there are some commonalities? For example, real estate (incl. rented apartment), local income, bank accounts, etc?
buynps.org
2021-01-05 16:00
@stolzlos it should be different for each one. in canada primary ties are:
? no primary residence
? no spouse
? no dependents (kids)
jason
2021-01-05 16:17
If anyone knows, for "US-Persons" considering renouncing, do non-reportable assets like foreign real estate get included when calculating exit taxes?
francoisleblanc007
2021-01-06 02:13
Ty @buynps.org yep will be looking at doing final return in April 2022, thanks for the tip!
marziovit
2021-01-07 22:41
Managing a ON LP or BC LLP as a non-dom in UK/Ireland wouldn?t trigger any CFC / place of management rules?
simon
2021-01-08 00:27
@marziovit No as those aren?t separate legal entities for tax purposes in the UK. You?d simply have to file a partnership return / self assessment to report your capital gains etc generated while in the country. Dividends received by non-UK companies aren?t liable to UK tax if you are a non-dom.
marziovit
2021-01-08 08:50
@simon Lets say you, as an Ireland non-dom, are the only shareholder of a UK LTD, will dividends received from the UK LTD be tax free if kept outside Ireland?
simon
2021-01-08 16:26
Assuming no work is performed while in Ireland, yes. You?ll be paying UK corporation tax in this scenario, however, which doesn?t make much sense given than rates in Ireland are lower.
simon
2021-01-08 16:27
Unless the UK LTD (or its branches / subsidiaries) pays tax elsewhere obviously
leo.kipfelsberger
2021-01-11 18:39
Not sure if it's still relevant for you @alessio.zazzarini but I used a site called NomadLaw to set up my personal residency in Cyprus. Hope it helps '
arthur
2021-01-22 23:46
Hey guys,
I recently got my UAE residency as in Emirates ID and opened a company in the free zone there. Also signed out from the Netherlands, planning to travel the coming years and work from where ever.
I only need to enter the UAE once evey 6 or 12 months to keep my residency.
Now I was reading a bit in the conversations above, but am I a tax resident now as well in the UAE? Meaning I can enjoy the 0% income tax? This is what I thought so
michal.opoka
2021-01-23 00:14
hey, check double taxation treaty between Netherlands and UAE
michal.opoka
2021-01-23 00:15
it's possible Netherlands will still consider you their tax resident
arthur
2021-01-23 08:00
Hey man @michal.opoka thanks. I see there is a double tax treaty between NL and the UAE. This means my income from my UK LLP can?t be taxed twice, and will be taxed in UAE (0%) since I am resident right?
Does that mean I am tax resident in UAE?
Thanks man
vinodgn0088
2021-01-23 08:10
@arthur, In order to get a tax residency certificate from UAE, you need to live there at least 183 days/year. "once every 6 or 12 months" is only to keep your UAE visa active.
arthur
2021-01-23 08:12
Thanks man. Maybe a stupid question then, but where will I be taxed if I dont have this tax residency certificate from UAE? :sweat_smile: @vinodgn0088
vinodgn0088
2021-01-23 08:35
If you can't get a tax residency certificate from any country, most likely your tax residency will default to your citizenship country.
vinodgn0088
2021-01-23 08:35
What you need to do is cut all your ties in Netherlands and obtain tax residency certificate from another country.
vinodgn0088
2021-01-23 08:35
Read
vinodgn0088
2021-01-23 08:36
You will get some idea about residency rules and how residency tests are applied when it comes to DTAA
simon
2021-01-23 08:38
@arthur In the case of the UAE, they will deem you a tax resident if you spend 6+ months every year
simon
2021-01-23 08:40
In practice, however, you could likely get away with not having a residency certificate. It?s very rare that countries (or banks, for that matter) ask for them
simon
2021-01-23 08:40
Especially if you have no ties to NL
vinodgn0088
2021-01-23 08:43
@simon, Its better to have tax residency certificate in hand to avoid any future surprises. All the western countries already know that people are moving to reduce their taxes and they will try their best to grab more taxes. If a person gets selected for tax audit in future, the tax department will go through his/her previous records and ask to provide tax residency certificate from other countries.
twinorita
2021-01-23 08:45
I think paying a little bit of tax in a country where you travel could solve this problem, like territorial tax countries like the Philippines, Thailand, Hong Kong. For Thailand remit 300k Baht and pay the 5% taxes and you have a proof that you paid taxes somewhere. Could this solve the issue?
vinodgn0088
2021-01-23 08:46
@twinorita, If you pay taxes in Thailand most likely they will give the tax residency certificate; Along with this you need to cut ties with your home country and you are good to go (I think)
felix
2021-01-23 08:53
Moved in 2017 to Dubai, de-registered from Germany and nobody ever asked for any tax certificate. To be frank, I was in Dubai for 1.5+ years and never got a tax certificate either (nor asked for one). Not sure if the Dutch are more tax hungry than the Germans, but I think cutting ties, having a proof of residence (bank in Dubai, DEWA bill, etc.) should get the job done. EmiratesNBD is happy to write you a certificate of your address for AED 20
arthur
2021-01-23 08:56
So if I am spending 3 months Bali, 6 months Australia, you would say it's better to pay a bit of tax there @twinorita @vinodgn0088 to avoid any problems in future, as long as I have a tax cerfiticate somewhere?
@felix I see, but you have actually lived in Dubai as you said. This is not my plan to be honest...
felix
2021-01-23 08:57
Nobody in Germany knew that I actually lived in Dubai, I could have been wherever. Just saying that nobody raised any flags in Germany when I said I am going to Dubai and cut my ties, nor has anyone asked for any proof.
felix
2021-01-23 08:58
And getting a proof of residence is ridiculous easy in Dubai.
arthur
2021-01-23 09:07
Thanks man. And how far did you cut ties? I still want to keep my Dutch Savins bank account to ensure I can transfer Euro's from there to my Dutch broker account. That's it actually. @felix
felix
2021-01-23 09:09
I kept a Germany bank account as well. De-registered at the city hall as ?no residency/address in Germany?, canceled my apartment and telephone contracts. That?s pretty much it. Never had a German company, therefore this was not of my concern as well.
felix
2021-01-23 09:09
Tbh, I probably should have canceled the bank account as well. It feels like banks in Germany are anyways very backwards, and there are better deals in non-EU countries. I remember that they still kept sending me TAN lists on paper until 2019 :man-facepalming:
arthur
2021-01-23 09:42
Have you done this? Paying taxes in a country where you lived for 3 months for example?
mescos
2021-01-23 09:44
@vinodgn0088 do you have any examples of this actually happening? If so, can share some links? Interested in seeing anything to suggest that this is required as I?m generally in the same camp as @simon on this issue and don?t see a need to have a certificate for retroactive purposes.
arthur
2021-01-23 10:15
@mescos So you think without the tax certificate I should be fine? since I cut all ties with NL except for Dutch bank for savings..
mescos
2021-01-23 10:20
@arthur, not necessarily. I think it depends on the situation and making sure you comply with whatever requirements are needed in order to demonstrate that you are a tax resident in the desired country. And if the UAE requires 6 months and you?re not willing to live there, maybe you should consider other alternatives. Also, I think most people would look into moving their brokerage and bank accounts to countries that wouldn?t cause conflicts such as their home country, since that?s likely going to be considered a tie by NL. But again, all things that should be researched to see what?s required.
vinodgn0088
2021-01-23 12:08
@mescos, Did you ever faced a tax audit? I have faced once and what we think is not what they think. When you are selected for tax audit its always your responsibility to prove that the tax department is wrong. Otherwise just accept and pay the fine; move on.
mescos
2021-01-23 12:18
@vinodgn0088 I?m sorry to hear that, tax audits are brutal. If you don?t mind me asking, which country audited you and what do you think the trigger was?
twinorita
2021-01-23 18:42
yes, if you want to be on the save side and have some proof in your hands for the worst case scenario. At least thats what I believe is better then don't have anything. I am in the same boat like you, I don't plan to stay too much time in a particular country which could trigger tax residency, at least thats my plan for the short to midterm. Feel free to get in touch via PM if you want to exchange ideas etc.
burrup.lambert
2021-01-23 19:23
I would be more worried about Australia trying to tax you!
twinorita
2021-01-23 19:28
Nope not yet, I am just starting out and planning how to do things.
twinorita
2021-01-23 19:31
@arthur Do you really feel comfortable keeping this bank account? Which address do you plan to give the bank?
je
2021-01-26 00:58
Anyone here that knows if it would be possible to get non-dom Cyprus tax residency under the 60-days rule with a company & banking set up in a different EU country (as an EU citizen), and register that company as a Cyprus tax resident to take out profits with 12,5% corporate tax and no dividend tax (due to non-dom)? Specifically thinking about using an Estonian company. Does anyone have experience with getting non-dom residency in Cyprus under the 60 days rule, with a company set up somewhere else?
alex720
2021-01-26 00:59
Why Estonia ?
alex720
2021-01-26 00:59
Many people do this with uk entities in Cyprus
je
2021-01-26 01:13
Because of my clients.
je
2021-01-26 01:14
(They are not based in Estonia, but they prefer doing business with an EU company, and specifically they've OK:ed to be invoiced through an Estonian OU)
alex720
2021-01-26 01:15
I doubt they would refuse to be invoiced by a Uk company
je
2021-01-26 01:15
Well, there are specific reasons for tihs.
alex720
2021-01-26 01:15
Or why not use Cyprus company?
je
2021-01-26 01:15
*this
alex720
2021-01-26 01:15
I?d they want a uk company
alex720
2021-01-26 01:15
Eu company*
je
2021-01-26 01:15
A Cyprus company would most likely be OK as well. I don't particularly trust Cyprus banks though.
je
2021-01-26 01:16
And there seems to be quite a lot of bureaucracy etc in general with setting up a company in Cyprus.
je
2021-01-26 01:16
But I might be wrong about that, perhaps it's easier than I think.
je
2021-01-26 01:18
I'm already a citizen of an EU country.
je
2021-01-26 01:18
Oops, disregard the last comment, I was in the scrollback and saw some old comment that I thought was new. :smile:
alex720
2021-01-26 01:18
You can also bank outside of Cyprus
je
2021-01-26 01:19
Isn't it difficult to get a bank account for a Cypriot company outside of Cyprus?
alex720
2021-01-26 01:39
Where do you want to bank?
je
2021-01-26 01:42
Hmm, within EU I guess, just somewhere reliable and with low fees etc.
alex720
2021-01-26 01:42
I use TransferWise with a Cyprus company a
je
2021-01-26 01:42
Ok, cool. How much did you pay to set up your Cyprus company btw, and how much for annual maintenance?
alex720
2021-01-26 01:43
2800 euro
alex720
2021-01-26 01:43
Approximately. Hasn?t been a year yet
alex720
2021-01-26 01:43
So not sure what the annual costs are
je
2021-01-26 01:43
Ah, ok.
alex720
2021-01-26 01:43
And first year will be higher than others
je
2021-01-26 01:43
Yeah.
je
2021-01-26 01:45
Do you think TransferWise is OK for something like 300K-500K EUR revenue per year?
alex720
2021-01-26 01:45
I think it?s fine
alex720
2021-01-26 01:46
I use it with more
alex720
2021-01-26 01:46
Just have a backup account in case they stop liking your business
je
2021-01-26 01:46
Ok, cool.
alex720
2021-01-26 01:46
At a real bank
je
2021-01-26 01:46
Yeah, always good with a backup.
alex720
2021-01-26 01:46
You can also get a worldfirst account
alex720
2021-01-26 01:46
TransferWise competitor
je
2021-01-26 01:47
Oh, I hadn't heard about them before.
je
2021-01-26 01:47
Seems nice.
alex720
2021-01-26 01:47
:)
alex720
2021-01-26 01:48
Haven?t used them yet
alex720
2021-01-26 01:48
In account opening process
je
2021-01-26 01:48
Ok. :slightly_smiling_face:
je
2021-01-26 01:48
And that they used it with a Cyprus company.
je
2021-01-26 01:50
Apparently they're based in Sweden.
je
2021-01-26 01:52
Oh, just found that some of the people involved have been sentenced for some eco crime 20 years ago or so. :stuck_out_tongue:
je
2021-01-26 01:52
Might want to stay away from that then.
twinorita
2021-01-26 09:33
@Joe
You could also have a look at bankera business if you are willing to pay a monthly fee and if crypto is involved.
je
2021-01-26 12:48
@twinorita Thanks. Crypto is not involved, in this case, but being able to do some crypto trading doesn't hurt.
tiagomdreganha
2021-01-26 16:25
Guys try to keep conversations in threads please :pray:
je
2021-01-26 19:39
Ah, sorry!
arthur
2021-01-27 11:49
@twinorita hey man, have sent you a PM :slightly_smiling_face:
arthur
2021-01-27 11:49
@burrup.lambert haha lol, have experienced it?
bountybairn
2021-01-27 15:30
Cyprus formation typically costs around 1500 euro plus add ons if you want service address, nominees etc, accounting around 2-3k per year depending on number of transactions.
Remote account opening isnt really a thing. if you have docs or an existing account with a domestic bank you can get an account easily enough. With the right info they manualy will open the account that day, and card is sent within 3/4 days to a local address. The banks here are largely backed by by the very wealthy Orthodox Church which owns a lot of the land here too.
Formation will take around 2 weeks, selecting a company name can cause delays as no similar names in other jurisdictions are allowed (unless you have written permission).
je
2021-01-27 21:42
Regarding the 183 day rule.. How likely is it that a country such as, for instance, Thailand would demand that I pay taxes there if I would spend more than 183 days there in a year? Assuming I have non-dom tax residency in Cyprus and using the 60 day rule?
je
2021-01-27 21:43
And/or how likely is it that Cyprus would note that I spent 183+ days in another country, and say I was not eligible for tax residency in Cyprus & not take my money?
I guess another thing to take into account might be whether my original home country could claim that I don't qualify for tax-residency in Cyprus according to the 60 day rule due to spending 183+ days in another country / in Thailand (in order to argue that I should be paying taxes in my original home country instead), but in that case, couldn't I rightfully claim that I should count as a tax-resident in Thailand for that year, and in that case I shouldn't be paying tax for income not remitted into Thailand the same calendar year anyway?
Does anyone have any real-world examples/experience/references of these types of issues and how things actually work in practice regarding this?
burrup.lambert
2021-01-27 23:28
Luckily no. But as an Australian born citizen who has now left Australia permanently I became very familiar with how petty the ATO can be, and the lengths they will go to classify you as a tax resident, including stories from distant family members: such as the ATO coming after them and presenting every single passenger card they had ever filled out as evidence in support of them being an Australian tax-resident.
bountybairn
2021-01-28 13:02
Not something that I can share experience of, I am happy to pay my corporate 12.5% in Cyprus, and take tax free dividends and spend most of my time here apart from occasional business travel (not now obviously)
arthur
2021-01-28 13:14
Geez... How do you deal with this personally?
burrup.lambert
2021-01-28 13:24
Get all your ducks in a row. Make sure all your paperwork is in order. Fill out all forms correctly. Limit your ties to Australia. It will be a lot easier if you are young, no family, and no property in Australia.
arthur
2021-01-28 14:32
I see.. thanks man!
twinorita
2021-01-28 17:45
@je First, thats a great question and I am in a similar dilemma and I believe the only solution for not having any issues with your original home country is to pay taxes somewhere, if you don't want to take any risks. It could for example make sense to have a tax domicile in cyprus, where you can receive dividends tax free as personal income and pay the 12.5% corporate tax. The most important thing for having peace of mind is that you have strong ties there, like a rental contract, phone number, internet, etc.. and occasionally visit cyprus for lets say 1-2 times a year and spend there 1-2 weeks. Forget about the 183 days rule, as long as you have strong ties like I mentioned above and pay taxes somewhere like the corporate tax or optional if you don't need to pay any corporate taxes, remit some income to a territorial tax country like thailand and pay 5% for 300k thai baht and you have something in your hands!
Fact is nobody can force you not to travel and if this means you stay more than 6months in thailand for example, so be it. You don't have to pay any taxes there, as long as you don't remit your profits within the same year, which is an extremely stupid law. Secondly, it's illegal to work in Thailand, except you start a business there and generate income locally. If its illegal to work there, they logically cannot ask for taxes also and as a result it shouldn't matter if you stay there 6 months+.
twinorita
2021-01-28 17:52
Where are you located in Cyprus? I was there in 2018 (paphos area). Really a beautiful place and I had a good time but I really hate the locals there! Cypriots are the most unfriendly people I came across.
je
2021-01-28 17:53
@twinorita I will be paying taxes in Cyprus, and that's totally fine. It would have been nice to be able to potentially spend a large part of the year in, for instance, Thailand or some other country in southeast asia with low living expenses, great beaches etc. But yeah, decided that I won't risk technically becoming a tax resident of any other country than Cyprus by spending >183 (>180 in the case of Thailand specifically, for some reason). I can just move between a few different locations, besides Cyprus where I would of course spend at least 60 days per year.
je
2021-01-28 17:55
Planning to move to Paphos (not there yet, citizen & tax resident of another EU country right now, but in the process of selling my apartment, and setting up the Cypriotic company, so that I can hopefully move within the next few months, and then liquidate my current company and start using the Cypriotic one.
twinorita
2021-01-28 18:01
@Joe Even if you would trigger tax residency in Thailand if you stay there for 180days +, you still don't owe them taxes because it's illegal to work there according to their own stupid laws, hence it would be illegal even if you pay taxes there. The only way they can tax you is, if you remit money the same year and if you do a local business with local profits, which you wouldn't, if you are able to do your work online. Things can change of course the coming years, but thats the situation there. I even heard of cases that it was nearly impossible for foreigners to apply for a tax number and all the thai officers would probably just look stupid at you and think that you are are crazy farang, because you want to pay taxes in thailand. :smile:
bountybairn
2021-01-29 11:27
@twinorita @je It's Paphos I am in
je
2021-01-29 11:41
@bountybairn Is it good? :slightly_smiling_face: I was initially a bit torn between Paphos, Limassol and Larnaca. Larnaca due to being closest to the biggest international airport, Limassol because it's a larger / more lively city, and I like some nightlife etc as well, and Paphos because it's less expensive + the airport there has some good (and cheap) direct flights to a number of locations that I think could be useful for me. Ultimately, Paphos seemed like the best choice, especially since I might not spend more than 60 days there per year (I might end up spending a lot more time than that there, of course, but ideally I would be spending 3-4 months in Thailand, a couple of months in Sweden, a couple of months in Cyprus, and the remaining time try out some other locations + misc travel for conferences / business meetings etc)
bountybairn
2021-01-29 12:13
@je yeah i really like it, Paphos is very spread out so covers a large area but not very built up. Theres enough here to keep me and family mostly entertained and Limassol is only 40 minutes away, i used to travel a lot and my place is about 10 minute drive from Paphos airport. For me theres nothing really going on in Larnaca other than the airport but havent spent much time there.
The amount of real estate development and investment in Limassol makes it seem like a more appropriate candidate for the capital. There are large developments of tower blocks all over the city. It's probably the business hub ahead of Nicosia.
Nicossia is nice though, fascinating place, quite metropolitan feel compared to Larnaca and Paphos. Obviously being divided brings a bit of a unique feeling to it all (you can see a massive Turkish flag that they somehow modelled into a hillside from the republic side for example)
What I like about here is that I drive and all the places are reachable within a couple of hours drive easily. Just now there is snow in the mountains you can go skiing, yet i am on the cost and its mild enough to go for a walk, and even swim when the water is calm.
Pretty much everyone speaks a good level of english, and there are many expat communities from all over. A lot of British, Russian and Chinese but also many many more from other places too.
bountybairn
2021-01-29 12:16
This one is taken from the north side, but you can see the flag from miles inside the republic south
je
2021-01-29 18:49
@bountybairn Interesting. :slightly_smiling_face: Thanks for the input!
stolzlos
2021-02-04 12:36
does anybody know how change of tax reporting works when you change your tax residency? Is there a kind of obligation to update tax information with all your brokers and banks?
felix
2021-02-04 12:40
I just changed my tax residency in the online banking. Went instantly through without any requests for verification (HSBC)
simon
2021-02-04 13:53
@stolzlos Usually yes, if the banks / brokers / financial institutions are located in CRS countries.
twinorita
2021-02-04 22:09
@Joe I stayed in Paphos for 1 month and had a very good time there. It was more like a holiday though and I think 2 months would be probably too much, however if you are busy with work, I cannot see any problems. Food is high quality and very cheap as well and there are very good beaches near.
The locals are very unfriendly though!
stolzlos
2021-02-05 11:37
@felix @simon thanks
ben659
2021-02-06 05:50
Hi @simon, I?ve been reading the conversation history here and I want to be sure I?ve understood your advice correctly. I?m a British freelancer paid by US clients, currently in Panama awaiting my Friendly Nation visa.
? With a FNV, do I only need to prove a permanent address to get a tax residency certificate?
? Once I have this certificate, can I leave Panama and carry out all my freelance work on the soil of other countries (without becoming tax resident anywhere else), and declare all this income in Panama as exempted worldwide income? (Returning to Panama briefly every two years to keep the residence)
? Would I even need to set up a company such as a UK LLC to do this - can?t I just do this as a regular freelancer and save on the overhead (my clients don?t care where I bill from)?
Thanks in advance
simon
2021-02-06 17:47
@ben659 You don?t need to apply for a tax residency certificate, once you have your FNV you are good to go. There?s also no need to setup a business, you can bill in your personal name (assuming liability isn?t an issue)
Tax residency certificates are used to claim tax treaty benefits, and to prove residency in case that is disputed by another country.
buynps.org
2021-02-06 17:51
> Once I have this certificate, can I leave Panama and carry out all my freelance work on the soil of other countries (without becoming tax resident anywhere else), and declare all this income in Panama as exempted worldwide income? (Returning to Panama briefly every two years to keep the residence)
@ben659 residency and tax residency are two separate things
ben659
2021-02-06 17:51
Hi @simon Thanks, ideally I need a certificate to keep Portugal happy by showing I?m no longer resident
ben659
2021-02-06 17:52
@buynps.org I understand, but the Freedom Surfer site claims I can maintain tax residency in Panama without being there 183+ days
ben659
2021-02-06 17:52
Of course, I wouldn?t become tax resident anywhere else
alex720
2021-02-06 17:56
If you only visit once per 2 years and don?t have a
Home and ties , you won?t be tax resident in panama @ben659
simon
2021-02-06 18:12
@alex720 You can establish tax residency in Panama by spending 183+ days and / or becoming a permanent resident. https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-panamahighlights-2020.pdf
ben659
2021-02-06 18:16
Thanks @alex720 and @simon, it sounds like if I have a permanent address and maintain my permanent residence status in Panama it doesn?t really matter how long I spend. Does anyone have any experience with actually being asked to prove this?
ben659
2021-02-06 18:17
Additionally, @simon, I understand Panama has 10% capital gains tax. Does this apply to sale of precious metals and stocks? If so, can I set up an IBC and transfer ownership to the company, thereby protecting against Panama?s capital gains tax if I were to sell and funnel gains via dividend/salary?
simon
2021-02-06 18:21
@ben659 That will depend on a number of factors. For example, do you file annual returns in Panama? Do you visit on a regular basis? (to make it look like your trips are starting / ending in Panama) Do you have a local company? Do you have friends there or some other ties?
As for capital gains tax, it only applies to local gains.
ben659
2021-02-06 18:26
Got it @simon. Yes, I have some friends here, will probably have my dentist here, and could feasibly visit more than once every two years if necessary, but I want to be fully location independent and minimize any time requirements in one place. Thinking about buying a cheap property to leave some belongings and have a permanent address. I do indeed plan on filing my returns here, but it sounds best to just dissolve the Panama company needed for FNV and file as a freelancer, given that I?m not concerned about reputation in invoicing from Panama, nor liability, nor does it sound like I have to worry about tax on sale of my foreign assets. Any flaws in my plan?
ben659
2021-02-06 18:27
I?m also fluent in Spanish, which I assume will help the cause in claiming tax residency
simon
2021-02-06 18:44
Sounds like a good plan, especially if you have little to no ties to other countries. Usually the weakpoint in a ?digital nomad strategy? is the country of citizenship but the UK isn?t an issue if you pass the SRT and generate no local income.
otkeedca
2021-02-08 10:23
Hey folks. Does anyone know if it's possible to check the status/validity of a US ITIN? I got one years ago and linked it to some credit cards, but lately it's been rejected when applying for cards and on credit report sites like Creditkarma. Does it need to be renewed if you're using it?
simon
2021-02-08 12:07
@otkeedca ITINs do not expire as far as credit history is concerned. There?s no connection between the IRS and the credit bureaus. Do you have an AmEx card? If so, you can check your history in the app
otkeedca
2021-02-08 12:40
Thanks Simon. I don't currently have a US AmEx. My guess as to why credit lookups fail is that my card issuers never actually linked the ITIN to the cards so there's no record at the credit bureaus. Can this be confirmed somehow with the bureaus?
simon
2021-02-08 12:55
You can ask them for a copy of your credit report but I?m not sure if that will show your ITIN. The AmEx app is a great workaround because it?ll show you your FICO score even if you have no SSN / ITIN.
otkeedca
2021-02-08 13:03
Ah good to know. Thank you
michispc
2021-02-13 10:37
Hey guys I hope everyone is well. I have a question regarding UK LLP/personal Tax. My girlfriend and I established the LLP with a digital nomad lifestyle in mind. So far we did not have any UK source income. Now a client based on the British Virgin Islands wants to work with us. Since an LLP does not pay corporate Tax, how would it affect our personal tax return if we work with them? We currently live in Germany and plan to go "stateless" within the next few months. Any help is highly appreciated :pray:
greenard23
2021-02-14 12:49
Does anyone have any experience with a UK LLP linked to a Thai company?
greenard23
2021-02-14 12:50
I take it the funds just get remitted to Thai company bank account and the local taxation laws apply.
greenard23
2021-02-14 12:52
The eccom biz generates cash from the UK 20%, EU 20% and the the rest of the world 60%. The reason we are exploring this avenue is the fulfilment centre requires a UK registered address.
benjamin
2021-02-14 15:35
@greenard23 Who are the partners of the LLP? A Thai company?
greenard23
2021-02-14 16:53
would be thais/ thai company
greenard23
2021-02-14 16:53
it?s my gf who aparently needs either an LLP or VAT number set up for fulfilment in the UK
bobriakov.igor
2021-02-17 15:11
@twinorita what's the deal with unfriendly locals?
Is it somehow similar to Greece?
twinorita
2021-02-17 15:54
They seem to be quite cold people, don't smile, don't greet and you generally don't get a good treatment in public places as a foreigner. They are also racist. Quite impossible to make local friends I guess. Absolutely no comparison to Greece, its exactly the opposite! I wouldn't want to live there, however staying 1-2 month should be ok to endure, as the beaches and quality of food is really something to highlight!
bobriakov.igor
2021-02-17 16:12
wow, that's interesting, thanks for sharing your perspective. Surprised to hear it is opposite to Greece, since, as I understand, they share some similarities in culture.
bountybairn
2021-02-17 21:18
I find locals very welcoming tbh, and its quite multi cultural so surprised to hear you say about racism.
I saw some graffiti on a wall but thats all
brian.ppcmanagement
2021-02-18 06:34
*Question regarding the best countries in EU for a residency and taxation setup with a digital nomad lifestyle in mind.*
What countries in EU would be the best to apply for residency with a tax scheme for travellers, that allow you to minimize the taxation burden while also allowing you to travel as much as possible?
So far I have pinpointed 2 countries in EU that fit those criteria:
? Cyprus - non dom residency (60 Days)
? Portugal - NHR
Any countries I am missing on this list? And of those countries, which would you recommend to chose?
About my company setup
? Estonian OU holding --> UK LLP
brian.ppcmanagement
2021-02-18 06:36
@simon, would love to hear your thoughts regarding this subject :pray:
simon
2021-02-18 10:40
Is your goal to spend most of your time travelling?
brian.ppcmanagement
2021-02-18 11:01
Yes that's the goal. Staying maximum 182 days per country i visit in order to avoid being subject to local tax
simon
2021-02-18 12:53
Cyprus is my favourite EU option because unlike Portugal, Ireland etc, you can work there, are paying some tax (meaning you have tax returns showing income, useful in case you apply for loans, are required to prove income etc) and the requirements for tax residency are clear and easy to meet.
arthur
2021-02-24 13:58
Yes I feel comfortable as long as I have minimal / zero activity on that account...
arthur
2021-02-24 13:58
I have sorted out UAE proof of address
klargoza
2021-02-26 06:04
Hi everybody, new member here. Does anyone have tax services/CPAs they use and recommend for Americans? I'm looking to file right now, which should be simple but also looking for long-term planning and advice.
simon
2021-02-26 06:14
Hi @klargoza, if you are living outside of the US I?d recommend getting in touch with Stewart (). He?s an Illinois registered tax attorney with lots of experience working with expats.
klargoza
2021-02-26 12:49
Awesome, thanks @simon
lnlrz
2021-02-27 13:10
Hey guys, I just joined this group, nice to meet you all. Does anyone have experience with taxation as a Philippine resident? Or at least know CPA's who know about this. I'm hesitant to get help from the people here because they may not know about how a PH resident citizen with a UK LLP is taxed
lnlrz
2021-02-27 13:11
Also confused about the actual expert to get help from: An international tax expert? A PH tax expert? A UK tax expert?
mich_cello
2021-02-27 14:32
If you have business just outside Philippines you are not taxed, if I will remember. @simon can advise :)
lnlrz
2021-02-27 17:10
Even as a resident? That'd be pretty fantastic. And upon research, it seems that way, too ? I've looked for CFC's and turns out there aren't any laws for it in the PH. But then again maybe I'm looking at the wrong place...
mich_cello
2021-02-27 17:19
It looks like that
simon
2021-02-27 17:58
I believe only expats benefit from territorial taxation, citizens are liable to tax on their worldwide income
mikeseo
2021-02-27 19:07
PH is pretty dysfunctional, I wouldn't worry about living there without paying taxes as a resident non-citizen. I got my resident visa and lived there a few years with no questions about taxes.
shaharhillel4
2021-03-01 13:52
hi everyone, im trying to figure out NHR (Portugal?s Non-Habitual Resident Tax Regime), does anyone have experience with it? as i am a national since last year, I?m not sure on tax filings and other steps I?m required to take.
ben659
2021-03-01 13:59
Hi @shaharhillel4, I have lots of experience with this, can you be more specific with your questions?
ben659
2021-03-01 14:00
When you say you?re a national, do you mean you?ve been granted citizenship and gained a Portuguese passport?
shaharhillel4
2021-03-01 14:00
thats exactly what national means.
shaharhillel4
2021-03-01 14:02
am i required to file since i received this document, in any case? am i required to file regarding trading activities as well? whats the date of filing tax reports for the portugese tax authorities?
ben659
2021-03-01 14:04
To qualify for NHR status you can?t have been a Portuguese tax resident in the preceding five years, so I assume you gained nationality without spending time there (e.g. by descent)?
ben659
2021-03-01 14:06
But yes, the income you hope will be considered exempt does need to be reported
ben659
2021-03-01 14:06
I don?t believe crypto and precious metals need to be declared
ben659
2021-03-01 14:07
The Portuguese tax return is done the year after you earned it. E.g. for 2019 I didn?t file until mid 2020
ben659
2021-03-01 14:08
Are you invoicing as a freelancer?
shaharhillel4
2021-03-01 14:08
yes
ben659
2021-03-01 14:08
OK, that will be probably be taxable as ?Portuguese sourced?
shaharhillel4
2021-03-01 14:09
but wired from USA ? and USA company?
ben659
2021-03-01 14:09
Yes, because you?re on Portuguese soil doing your work from there
ben659
2021-03-01 14:09
NHR is useful mainly for things like dividends
shaharhillel4
2021-03-01 14:09
would it make any difference?
ben659
2021-03-01 14:10
That will help
ben659
2021-03-01 14:10
Make sure you work with a good lawyer and accountant
shaharhillel4
2021-03-01 14:10
mm.. im in mexico now, need to be back in a month or two, are u in lisbon?
shaharhillel4
2021-03-01 14:11
if u can recommend a good lawyer or accountant that speak english it will be very helpful!
ben659
2021-03-01 14:12
I?m in Panama, I left Portugal in November. Can you clarify how you gained citizenship? This can make things complicated for you. The Portuguese can be aggressive on people who stop being tax resident - if you?re a citizen you will be liable for Portuguese tax if you move to any country that is on their blacklist. I?m not a citizen and they?ve been giving me a hard time for leaving to come to Panama
ben659
2021-03-01 14:13
Wow, nice
ben659
2021-03-01 14:14
I haven?t heard of many people succeeding there
shaharhillel4
2021-03-01 14:14
yes incredible. im very lucky.
ben659
2021-03-01 14:14
How long do you plan on living in Portugal?
shaharhillel4
2021-03-01 14:14
well i am legit originated there.. my grandparents are from north africa, which are in fact jewish communities that originated in spain/portugal
ben659
2021-03-01 14:15
Be very careful with the above - Portugal is a high tax country with exit taxes that many people aren?t aware of
shaharhillel4
2021-03-01 14:15
as i am a national, i wont have your problems of residency i dont have to live there physically to keep my residency
ben659
2021-03-01 14:15
So you don?t plan on living there?
shaharhillel4
2021-03-01 14:15
?living? as in 2-3 months a year prob
shaharhillel4
2021-03-01 14:15
i like to move around
ben659
2021-03-01 14:16
Hmm
shaharhillel4
2021-03-01 14:16
mainly Thailand mexico europe usa
ben659
2021-03-01 14:16
You won?t technically be tax resident in Portugal
shaharhillel4
2021-03-01 14:16
well legaly i am, as i declared i am, and im a citizen.
ben659
2021-03-01 14:16
Citizenship doesn?t matter
shaharhillel4
2021-03-01 14:17
in your case its different, u arent a citizen.
ben659
2021-03-01 14:17
Technically you?re not a tax resident even if you?re a citizen unless you live there over half the year.
shaharhillel4
2021-03-01 14:17
well thats what my lawyer said
ben659
2021-03-01 14:17
However, in real terms, I don?t think you?d be called out on it
ben659
2021-03-01 14:17
You would want to have a permanent address there
ben659
2021-03-01 14:18
The issue in this case would likely be your home country
ben659
2021-03-01 14:19
Israel, I don?t know what their tax residency requirements are like
ben659
2021-03-01 14:19
But it sounds like you?ll be fine claiming it?s Portugal if you have a permanent address there
ben659
2021-03-01 14:19
These guys are excellent and can advise better than me
shaharhillel4
2021-03-01 14:19
awesome thanks! ill go visit them when in portugal this spring!
ben659
2021-03-01 14:20
Just be careful with NHR and what can actually be considered ?non-Portuguese sourced?
ben659
2021-03-01 14:20
And social security payments
ben659
2021-03-01 14:20
You?re exempt for your first year, but after that they are very high as a freelancer
shaharhillel4
2021-03-01 14:21
:pray: thanks for the conversation ! really helpful!
tiagomdreganha
2021-03-01 15:47
Portugal recently addopted the concept of partial tax residency, meaning you can claim tax residency for just a few continuous months out of the year.
What I've heard people do with NHR and single owned LLCs is to charge the company for services rendered while in Portugal, while the rest flows as dividends at 0% rate.
It's a tricky area as single owned LLCs can be deemed my the PT Tax man as PT companies since they are being operated from Portugal. So this only works if you spend a small amount of time in Portugal and none of the company revenues/clients flows from Portugal.
I'm a Portuguese citizen and I'm still using a Portuguese corp because even if I go somewhere else for residency I'd still be spending 2-4 months in Portugal and the company wouldn't have solid substance anywhere else, it would be rly easy to get railed.
tiagomdreganha
2021-03-01 15:50
To permanently live in Portugal and get funds from an international LLC you'd need solid substance on the country of incorporation and at least 2 other non Portuguese residents as directors.
Managing an online business incorporated somewhere else while being a single owner/director and living in Portugal, isn't something you can fly with in Portugal.
shaharhillel4
2021-03-01 16:26
thanks a lot!
ben659
2021-03-01 18:21
It?s tricky.
ben659
2021-03-01 18:22
My lawyer works with people who claim a ?permanent residence? as their substance e.g. an office or flat or something in the other country, so they claim their income as exempt. But it?s clearly a grey area and she says they?ve been fine so far but none have been audited so it?s hard to say if it will hold up
ben659
2021-03-01 18:23
They can decide to audit for up to 5 years in the past, so you may think you got away with it until years later and they could decide to slam you with a tax bill
ben659
2021-03-01 18:24
This is why I recommend working with a good lawyer and accountant, and not taking the NHR lightly as if it were a territorial tax country
ben659
2021-03-01 18:24
I suspect with covid spending they may get a lot tougher
shaharhillel4
2021-03-01 19:35
so best is just get residency in panama and forget portugal and NHR?
ben659
2021-03-01 20:58
I don?t want to dissuade you from trying to structure effectively in Portugal, but wanted to share what I learned living there for a few years. Personally, my main concern as a citizen would be the fact that they will keep track and continue taxing you for two years if you move to a country on their https://www.newco.pro/pt/investir-em-portugal/informacao-contabilistica-e-fiscal-em-portugal/regras-anti-abuso-e-tributacao-autonoma/paraisos-fiscais
ben659
2021-03-01 20:59
It?s not like when I left the UK, I just needed to inform them that I moved abroad and no longer fulfilled their residency requirements and now they don?t care about me
ben659
2021-03-01 21:00
Even as a non-Portuguese citizen, they?re asking me to update my residency and the fact that I moved to Panama is likely to trigger alarm bells
tiagomdreganha
2021-03-01 21:01
"Move" to an EU country / get an address there to give the PT tax man, then move wherever. That's the best option to stay under radar if it's a blacklisted country. But yeah Benjamin is right.
tiagomdreganha
2021-03-01 21:02
FYI, I was notified of an audit for 2014-2016 period at the end of the 4 year legal limit (late 2018).
ben659
2021-03-01 21:02
That?s probably a good move, you could ?move? back to Israel. But as you can see, it?s pretty murky
ben659
2021-03-01 21:03
Wow, what was it like being audited?
tiagomdreganha
2021-03-01 21:10
I had a lot of unreported income (by my own fault) and got fukd with VAT and income tax + interest at 4% year + penalties (15% min for individuals, 30% for companies) ended up being 18%).
The auditor was a bit amateurish IMO, but they have powers to do whatever these days like lifting banking secrecy without court order. My best advice is to get an accountant and lawyer on it asap. I ended up spending around 7k between lawyer and accountant.
I solved the situation by proactively paying what I owed before the audit was done, so the audit result was "everything was solved while we were auditing, nothing to report". Which I hope gets me in less of a blacklist than getting an audit go wrong. But the bill reached 6 figures :upside_down_face:
Anyway, my situation wasn't a clever tax avoidance scheme or anything, which proabably gets handled by a more experienced team of auditors trying to rail big $$$
ben659
2021-03-01 21:12
Thanks for sharing. What do you think triggered the alarm bells?
tiagomdreganha
2021-03-01 21:13
registered revenue < EU purchases registered on VAT VIES system
ben659
2021-03-01 21:14
I?ve done everything by the book, declared everything, but would hate the experience of being audited. In Spain, I?ve heard even if you?ve done nothing wrong, they will claim something from you so their effort wasn?t wasted
tiagomdreganha
2021-03-01 21:16
Yep, with my corporation I'm doing stuff like putting small personal bills that I shouldn't expense, on purpose, so if I'm audited they can loose their time around that instead of poking where they shouldn't.
tiagomdreganha
2021-03-01 21:17
Nothing that would trigger an audit, but that I can feed them if audited.
ben659
2021-03-01 21:22
Do you know other people who have been audited?
tiagomdreganha
2021-03-01 21:22
Yep, a corporation high 7 figures, the small stuff to feed them was their advice.
tiagomdreganha
2021-03-01 21:25
They had a lot of VAT to claim back so they are always a target for audits.
tiagomdreganha
2021-03-01 21:25
but idk any NHR/expat that was audited
ben659
2021-03-01 21:26
It?s hard to imagine that it?s worth their while going after a 5 to low 6 figure freelancer/NHR/expat
ben659
2021-03-01 21:28
But I?m not sure, I feel like the middle class will be the easiest target as governments try to make up their deficits in the coming years
tiagomdreganha
2021-03-01 21:29
I was a 5 to low 6 figure freelancer :slightly_smiling_face: they're the easier targets cuz it's easier to settle than go to court, can't squeeze much but the squeeze is faster
ben659
2021-03-01 21:30
You had to settle a 6 figure sum as a 5/6 figure freelancer?
tiagomdreganha
2021-03-01 22:01
3 years of VAT + 4% year + fine, it adds up quickly
mb
2021-03-05 15:40
Does anyone have experience with this Digital Nomad visa in Croatia? https://www.expatincroatia.com/digital-nomad-visa-croatia/
mb
2021-03-05 15:40
From what I read, employment income (not passive income) is tax exempt.
mb
2021-03-05 15:41
In the form of temporary residence I believe.
claudiaroitmancorp
2021-03-16 21:30
Is Monaco considered a personal tax haven for EU residents? Can I have my residency there for 183+ days to pay zero tax? Since there's no border with the rest of EU, people could drive without any evidence showing less than 183+ days there. Is that correct?
omocha_10
2021-03-16 23:40
You will need to have a deposit in the bank, not sure, but between 500k and 1M?.
Plus owning or renting a property, in Monaco sq mtr is very high.
So I believe is a tax heaven if you make a lot of money, if not you may loose more than you save....
omocha_10
2021-03-16 23:43
If you wish to reside in Monaco, you must apply for a residence permit. To obtain a residence permit you must:
- Have accommodation in Monaco, being the owner of a house or apartment or being the director or unit holder of a company which owns a house or apartment or renting a house or apartment (lease contract minimum of 12 months).
- Have sufficient financial resources, this requirement is fulfilled making a deposit in a Monegasque bank. Most banks do require initial deposits from ?500,000 to ?1,000,000 to open an account.
You may include your dependents in the application, provided that the property has sufficient bedrooms to accommodate the number of persons applying.
omocha_10
2021-03-16 23:43
There are no particular length of residency requirements, but you may be required to prove that you spend some time per year in the country, by means such as an electricity bill.
After three years, you will receive the ?Carte de Resident Ordinaire?, which has a validity of three years and must be renewed every three years.
omocha_10
2021-03-16 23:44
Hope this helps, but I am not a profesional accountant/lawyer.
jase
2021-03-17 12:04
Yeah I know Pro cyclists who left Monaco with not a cent to their name. No tax bankrupted them!
russ7
2021-03-19 00:01
Where can a Canadian move and pay legit 0% - 15% tax a year using an Ontario LP to invoice American clients?
mescos
2021-03-19 09:53
@russ7, it depends on how your income is being sourced, how much you want to pay, and how long you?re willing to live in the country each year.
For example, if your income is considered foreign earned income, any country with territorial taxation would do ? such as Panama.
Alternatively, if your income is not considered foreign earned income, then the UAE or Cayman would work.
There are plenty of other options out there. And, as long as you go through the process of becoming a non-resident for tax purposes in Canada, then it should be relatively easy for you to achieve your goal.
russ7
2021-03-19 10:31
@mescos from what I understand... income earned while working inside a territorial taxation country - even if sourced from clients in another country - is considered locally sourced?
mescos
2021-03-19 10:44
@russ7 Yes, in most instances that is correct. So, it?s important to know what types of income you have and how it will be treated in the country of residence before choosing where to obtain residency.
That said, an expat in Panama who works online and is paid by a foreign company often never enters that Panamanian tax system. However, an expat that works for a foreign company which has local operations in Panama would.
russ7
2021-03-19 11:31
Thank you for the clarification!
claudiaroitmancorp
2021-03-19 21:22
Do you guys have any recommendation for a US tax attorney that's affordable? for US residents
tmclayson
2021-03-22 05:23
@simon Resurrecting this thread but...
Would you not also be paying some tax in Portugal under the NHR scheme?
And on that note...
Could you explain the holding / corporate structure you've mentioned before in more detail. So let's say you have an Estonian OÜ right now, and plan to spend a few days each month in Portugal, and not more than 183 days anywhere else. As a freelancer operating this OÜ, how do you maximise the tax saving, and what is the effective total tax rate you've seen people manage to achieve.
luyungterd
2021-03-22 17:46
Hi @simon, can this setup work?
Current tax resident in Malaysia. Setup a single member Estonia OU company to handle Amazon KDP (paying for ads and taking royalty through it) & also holding royalty from Youtube etc.
Withdrawing by paying myself a portion in Malaysia as royalty (paying the withholding fee to Estonia government etc and declaring income tax in Malaysia). Any leftover money will be fund into IBKR account opened through Estonia OU to invest likely in US stocks and let it grow. While I'm hitting the place of management rule in Malaysia, will the Malaysia IRS check on the Estonia OU? Will it matter if I'm not declaring any dividend in Estonia, hence no tax on retained profit? Since there's no tax treaty between Estonia and Malaysia, I don't want to pay tax twice.
Then, on every other year or maybe more depending on when I need the money, I'll stay in Malaysia <60 days while keeping tax residency and travel around, so that I can withdraw majority of the money in Estonia OU as salary?
Actually, I don't mind paying the 25% Estonia profit tax since Malaysia doesn't tax dividend. I'll pay the 25% once. It's just that I don't want Malaysia to come and say, hey, pay us too. If I'm going to pay solely in Malaysia due to place of management, that's fine too because the corporate tax in Malaysia is 24% instead of 25%.
My initial purpose for the Estonia OU is maybe as holding, but mainly to reduce the 30% US tax withholding on passive income down to 10%, though I doubt that driving KDP income is anything but passive.
vinodgn0088
2021-03-23 02:19
@luyungterd, Place of management is an issue. If you live less than 183 days in Malaysia and prove that all the works were carried out while outside Malaysia, then it will workout. This is because Estonia will issue corporate tax residency certificate just because your company is incorporated there. Your duty is to make sure that place of management remain outside of Malaysia.
luyungterd
2021-03-23 02:41
If I can't prove otherwise? Estonia will issue corporate tax residency to Malaysia and I'll have to pay tax at 2 places?
If the criteria for place of management is just the board meeting location, I'll just travel elsewhere for a few days.
Then, it'll be the same thing if setting up a c corp in US?
vinodgn0088
2021-03-23 04:30
Its not just travelling for board meeting. Since you are the only owner/manager/director ; You need to make sure that the revenue making works are also carried outside Malaysia and non-Malaysian clients as well. I believe you are a Malaysian citizen. If you have a decent turnover and cope with approx 50K MYR annual OPEX then give a try on Labuan company setup. You can legally pay 3% corporate tax and get tax free dividend as well. For Labuan companies, there is no foreign currency/foreign remittance restrictions. IBKR will happily accept you as a client as well
luyungterd
2021-03-23 05:59
I see, thank you very much.
Yes, I'm a Malaysian citizen, but I recalled that the Labuan company is beneficial to non-citizen, not so much Malaysian. I went and googled around, seems like royalty will be taxed under the usual corporate tax, not much savings there. Not even sure if Labuan can get any foreign tax credit.
Since the source of income is royalty, I'm not sure if the entire Labuan entity will then be taxed at the corp tax 24% instead of 3%. Might have to ask a CPA.
As for the OPEX, I'll just hire myself there for 50K if I need to.
vinodgn0088
2021-03-23 08:30
@luyungterd, yes you are right about Royalty exclusion from LBATA. I didn't knew this before.
simon
2021-03-23 14:32
@luyungterd As Nomad Dude said, your setup would be far safer if you could prove that the company isn?t run from Malaysia. With that said, in practice the risk is likely quite low as you?ll have an Estonian tax residency certificate and proof that you paid taxes there (at a rate equivalent to that in Malaysia).
luyungterd
2021-03-24 18:21
Labuan is even more less attractive the more I searched. Due to new ruling, I don't think even the usual internet business can get 3% tax. https://www.alpadis-group.com/2020/06/10/economic-substance-requirements-included-in-labuan-tax-returns/
stolzlos
2021-03-26 09:31
General question about foreign sourced income. Any business you own needs you to manage it. That means that wherever you are, you basically manage it in or from that country. Does that not mean that more than 183 days of residency any foreign sourced income becomes locally sourced income (or liable to taxation) due to your own management? I assume that is different from country to country but still. Any clarification is much appreciated.
stolzlos
2021-03-26 09:34
For example SG:
Foreign income refers to income derived from outside Singapore. Generally, such income is taxable in Singapore *when remitted to and received* in Singapore.
https://www.iras.gov.sg/irashome/Businesses/Companies/Working-out-Corporate-Income-Taxes/Companies-Receiving-Foreign-Income
stolzlos
2021-03-26 09:36
so it seems that the income is liable to taxation only if you wire it to SG. Same for Japan as long as you keep a non permanent residence status.
simon
2021-03-26 10:45
@stolzlos If you work from Singapore, your income will be liable to tax there (as it will be Singapore-sourced). Same for Japan.
stolzlos
2021-03-26 11:13
thanks @simon. So what is a good strategy to make use of residency in a territorial tax haven, still operate you foreign business and avoid unnecessary taxation?
marziovit
2021-03-26 11:26
Simply manage your business while you are not in the country. If i'm not mistaken Simon is a HK tax resident and travels constantly.
felix
2021-03-26 16:40
Spoke to a tax advisor and he told me that when I pay myself once a year from a foreign entity and call it Dividends in the transfer, then it?s tax free. Obviously, not running the business from that company and only doing management/director decisons while being abroad.
simon
2021-03-27 03:43
@stolzlos You have to be careful about not running your business from your country of tax residency (if you want to take advantage of territorial taxation). If you are actively involved in your business, that will mean frequent travel. If you are not, you?ll simply have to do like Felix and make sure you are out of the country when you attend board meetings and the like.
felix
2021-03-27 07:01
A way could be also to simply pay yourself a salary from abroad and tax it in your home country for the company you actively manage, and pay the rest out to the holding company that owns the entity. In that way the holding can pay yourself dividends in SG which are not taxed in SG.
sergiy.shlykov
2021-03-27 07:33
@felix do not cfc rules kick in here? If you are actively managing a foreign company, it should treated as a local company for tax purposes.
felix
2021-03-27 07:36
I do actively a job in a company and get a salary for it, but actively managing a company (director & shareholder decisions) are made outside of the country
simon
2021-03-27 07:36
@sergiy.shlykov CFC rules are not a concern in territorial taxation countries (as foreign income isn?t usually liable to tax)
simon
2021-03-27 07:37
Place of management rules are the main concern
luyungterd
2021-03-27 07:53
Is investing in foreign stocks using company's money considered place of management activities? How about buying bonds because don't want to keep money in bank account? Not sure what can be defined as place of management. Seems like any activities regarding business can be considered a commercial decision, hence place of effective management.
stolzlos
2021-03-27 08:22
Honestly, I have to admit that I misunderstood aspect of management and residence in a territorial taxation country. I was somehow convinced having an offshore company and residing in a TTC is enough but obviously it is not. The 183 days rule still applies. If you run your company beyond that, taxation.
So I thought, what's the damn point? Isn't travelling around to do your management the same as trying to avoid tax residency at all? But then I "finally" realized the difference. With a TTC residence you can travel *"in order to"* do your management come back and be fine (taxwise). With a *non TTC* tax residence you can do whatever you want, have whatever structure you can, even if you never set foot in that country you are liable to taxation.
stolzlos
2021-03-27 08:23
I hope I finally managed to get it right. If not, somebody smash my head please :wink:
simon
2021-03-27 09:24
@stolzlos The 183 days rule is for personal tax residency in most (but not all) countries, for companies all you need in most countries to create a local tax liability is to generate local income.
You are right in your understanding of territorial taxation, as long as you do not work when in-country (or do not exceed the tax-free allowance, for example the 60 days rule in HK), you will pay no tax. Most territorial taxation countries also exempt all capital gains and obviously foreign-sourced investment income (dividends paid by companies you own stocks in, for example).
stolzlos
2021-03-27 10:56
@simon thank you very much. The capital gains issue though is bugging me a little.
It seems that some TTC countries with capital gains exemption may tax if capital gains is the main source of income. Any truth to that? If yes, any way to avoid that?
Further, if I generate capital gains through an LLC, are capital gains still considered capital gains? As far as I know all income taxed via personal income tax (in case of tax liability). Is that incorrect?
simon
2021-03-27 11:55
That is true, if you trade for a living most countries will tax your profits as regular income (instead of capital gains). With territorial taxation countries, the same applies as with business income (you should trade only when abroad, if trading for a living). That also applies if you trade via a company.
russ7
2021-03-27 12:31
@simon I?m still not quite understanding this territorial taxation piece.
Let?s say you have a flow through entity from Canada. Your customers are American. And you live long enough in a Territorial taxation country to become a personal resident for tax purposes.
Are you on the hook for taxes on all income the flow through entity generates? Or is there a better way to structure?
mb
2021-03-27 12:33
I think the difference here might be a tax transparent entity like a LLP or single member LLC vs a non transparent entity?
simon
2021-03-27 13:03
@russ7 You?d be on the hook for all income generated while in the country (regardless of the entity type you use, or even if you work in your personal name). That?s why it makes most sense to choose a territorial taxation country that doesn?t require 183 days annually for tax residency (Panama, for example).
russ7
2021-03-27 13:05
@simon - do you mean living in Panama or only establishing tax residency there?
russ7
2021-03-27 13:05
Or setting up a business there?
simon
2021-03-27 13:42
Only establishing tax residency there
russ7
2021-03-27 14:20
So that would mean not living anywhere else long enough to establish tax residency?
simon
2021-03-27 14:58
Correct
russ7
2021-03-27 15:38
Ok Is establishing tax residency in Panama enough to disconnect from Canada?
stolzlos
2021-03-27 15:54
@russ7 there was a previous discussion regarding the necessary reduction of ties for Canadians.
stolzlos
2021-03-27 16:06
@simon so in regard to actively managed foreign sourced income it does not matter if I earn money on my own name or through a company as long as I do not do so in the country (TTC) of my tax residency. Assuming of course that I do not stay anywhere else more than 183 days. Correct?
simon
2021-03-27 16:29
@stolzlos Correct, as long as the income is earned outside of the country it?ll be exempt (in some cases you?ll also want to keep the funds abroad to avoid triggering remittance rules).
simon
2021-03-27 16:30
@russ7 In most cases, yes. That is assuming you do not have primary ties to Canada and that you do not stay for more than six months.
russ7
2021-03-27 17:40
@simon what about income earned in an Ontario LP not remitted into the country with territorial taxation?
marziovit
2021-03-27 17:44
@russ7 it doesn't matter if you remit income in the country but if you earned that income while working in the country
russ7
2021-03-28 12:53
@simon - dividends paid to non-citizen residents in Belize from IBCs are not taxable. So, could an Ontario LP pay the Belize IBC as a contractor? (And then the Belize IBC pay me)?
simon
2021-03-29 06:48
Would the work be performed in Belize?
russ7
2021-03-29 11:07
Yes
vinodgn0088
2021-03-29 12:41
@russ7, 1. Belize IBTA amendment released in Dec 2018 and came into effect in 1 Jan 2019
In December 2018, Belize amended its International Business Companies Act to eliminate ring-fencing and preferential tax treatment for offshore companies.
The amendment remarked a transformation of Belize tax system into territorial basic in which foreign sourced income is exempted from all kinds of tax in Belize.
*1.1. CIT tax treatment under this amendment:*
? General income tax rate in Belize is set at 25%.
? For petroleum operation, CIT is 40%
? For IBCs and companies operating in Designated Processing Areas (DPA), CIT shall be:
? 1.75% for chargeable income exceeding 3mil BZD
? 3% for chargeable income less than 3mil BZD
*Importantly, where a company is engaged in a trade, business, or profession where the revenue or income is derived outside of Belize, the company shall not be liable for payment of income tax in Belize.*
*1.2. Business tax treatment under this amendment:*
The business tax rates vary for different types of income and are stipulated in the ninth schedule in the principal act (IBTA).
Moreover, business tax shall NOT apply to:
? Persons or companies engaged in petroleum operations;
? *IBCs engaged in a trade, business, or profession if the revenue or income is derived outside of Belize;*
? Companies developing or operating in a designated processing area (DPA).
Despite the country?s aggressive steps toward improving its tax legislation, Belize?s new foreign source income exemption regime was still considered retaining harmful features with respect to ring-fencing and limited scope of economic substance applied to entities benefiting from tax exemption, just to name two.
This led to further amendment in its IBTA and the introduction of new economic substance legislation in late 2019.
2. Belize latest IBTA amendment released in Dec 2019 and came into force in 1 Jan 2020
*2.1. CIT tax treatment under this amendment:*
Starting from 1 Jan 2020, no income tax shall be payable upon the chargeable income of a company, other than a company engaged *in petroleum operations.*
*2.2. Business tax treatment under this amendment:*
Effective from 1 Jan 2020, every individual, self-employed person, professional, firm or partnership will be subject to business tax on all receipts *regardless of receiving in or out of Belize.*
There are three cases where a company will be discharged from business tax:
? Companies engaged in petroleum operations;
? An approved company under the Designated processing area (DPA);
? Tax resident in other counties not named in EU annex I for tax purposes *and* not have a PE (permanent establishment) in Belize. And the company have to provide sufficient evidence of its tax residency abroad to claim this tax exemption. In addition, foreign sources income has to come from a Permanent Establishment (PE) of the source state (country where the income is derived) to be eligible for the benefit.
In order for an IBC to qualify for business tax exemption, it must provide supporting documents to demonstrate its tax residence in another country. However, further guide on documents, timeline and procedure for proving foreign tax residency are still under development.
To conclude, all Belize IBCs will now be subject to business tax on turnover unless an IBC can provide proofs of its foreign tax residence and it must derive foreign sourced income from a PE in the source state.
russ7
2021-03-29 12:49
Thanks @vinodgn0088 - I read that, but I find it pretty confusing. For instance, 2.2 seems to contradict some of the stuff above it.
vinodgn0088
2021-03-29 13:44
@russ7, Let me make it simple for you. If you live and work/manage a foreign incorporated company from Belize it is creating a PE and the revenue is treated as sourced in Belize. This revenue is liable to tax in Belize. If you want to reduce the tax burden, what you need to do it setup a company in Belize Designated processing area (DPA) and pay the low corporate tax and possibly exemption from dividend tax too.
russ7
2021-03-29 13:45
@vinodgn0088 thank you. Does the same hold true if the foreign company is not incorporated (it?s a partnership)
russ7
2021-03-29 13:53
Also, it looks like it?s tough to take advantage of the lower DPA rates since to qualify, you need to be:
?Any company that is registered and formed in Belize, and is involved in any of the following activities: Manufacturing, Agro-processing, Aquaculture, Data Processing (IT Enabled Services), Developer of an Industrial or Business Park.?
vinodgn0088
2021-03-29 14:10
@russ7, If its a tax transparent partnership, your share(directly or indirectly) will be taxed in Belize in the form of self-employment. The only way to avoid this is to do the works while you are outside of Belize and prove that the income was taxed in another country. Also one thing you need to note down that, Belize is doing all these to satisfy OECD and EU. I am not sure if Belize actually wants to do a real aggressive tax crack down on expats as it will do more harm to their economy and scare away the expats.
russ7
2021-03-29 14:36
Good point @vinodgn0088 - thank you. We may end up going to Cayman to avoid any of those hassles.
pierrekotarski
2021-04-06 01:11
Wait, If you are in Panama, yet your income comes from the US, as in a US company deposits money into your bank account?? that would be locally sourced? I thought you were only taxed on income that was coming FROM panama? (ie. a Panamian company pays you for IT services.) Can someone clarify? Thanks!
burrup.lambert
2021-05-03 16:46
RE this: If you have a secured credit card with Bank of America you can also view your FICO score for free.
burrup.lambert
2021-05-03 17:47
Speaking of, does anyone know how your FICO score is calculated and/or generated as a foreigner (no SSN/ITIN etc)?
Background.
I have 2 bank accounts in the US and 1 credit card. I have never used the CC, I haven't even used the debit cards on the accounts. The 1 CC is a secured CC. I have no other financial products with the US. I don't live in the US, I do not have an SSN/ITIN.
Somehow despite all that my FICO score is almost 800 whilst having never used credit (in the US)...
Does it pull international credit history from other countries where you may have credit history?
buynps.org
2021-05-03 21:15
curious about the FICO score as well
klaus
2021-05-06 15:22
I want move to Spain/Barcelona with my girlfriend for 1-2 years (renting) and see if that is where we want to stay for longer (because I have friends there and I like Spain). I realize if you want to move there permanently, there are some challenges around wealth tax etc, but I am hoping to find a kind of white/grey area solution that can mean my girlfriend and I can stay there for 1-2 years without being taxable - or at least only paying tax of whatever salary we choose to pay ourselves in Spain. Just to try it out.
I need to talk to somebody, who understands the Spanish tax/residence situation, who can help me find the right way of doing this. Maybe somebody here has already gone through something similar - or know just who to talk to?
klaus
2021-05-06 15:23
I am an EU citizen, my gf is not. We don't need work, we can prove self-sufficiency, we can buy private health care etc.
mb
2021-05-06 15:41
Is your current residency worse/better than the Spanish one, in respect to wealth tax?
klaus
2021-05-06 15:42
Much better
klaus
2021-05-06 15:42
...in that there is none :smile:
mb
2021-05-06 15:43
The grey zone is, you stay registered where you are, but just happen to rent something there.
Grey zone no. 2 is becoming a perpetual traveller and just renting something in Spain. More risky.
klaus
2021-05-06 15:44
But if we go through the airport/border and have been there for more than 90 out of 180 days, will we not run into problems and risk not being allowed back in?
mb
2021-05-06 15:44
You are an EU citizen?
klaus
2021-05-06 15:44
I am, my girlfriend is not
mb
2021-05-06 15:44
Nobody can ever deny you. As for your GF that might be more tricky.
mb
2021-05-06 15:45
But if you really want to push it, just travel to France or something. Drive in to Barcelona.
mb
2021-05-06 15:47
Anyway, from my experience, lot's of people live in Spain, with a foreign residency. Had some local friends from Ukraine, who used to regularly fly in/out on a monthly basis.
klaus
2021-05-06 15:50
I was hoping there was a way similar to Malta, where you apply for a residence permit on the basis of being self-sufficient and self-employed, and then you just pay yourself a minimal salary and pay a small tax on that. Then you just pay yourself a salary from your (non-Spanish) company to Spain - and you can pay yourself the rest outside Spain (or keep it in the company).
klaus
2021-05-06 15:52
And thanks for your help so far, Michel! :slightly_smiling_face:
edgr
2021-05-06 15:58
hmm.. technically you can only stay three month and then you are a tax paying citizen but I heard there is something that they use for football professionals so they dont need to pay for one year. Perhaps you can make use of this exception.
vinodgn0088
2021-05-06 17:56
@klaus, May be you can get a residence permit in Andorra (Passive one) and then frequent travel from Andorra to Spain to meet friends, short stays etc. If you want to spend few days in single stretch, better do cash deals with Airbnb owners and don't leave any trails.
burrup.lambert
2021-05-06 18:52
I believe if you can prove tax residency in another country, you do not know any taxes in Spain. Meaning you can live there (get residency for example with a Non Lucrative Visa) and live there tax free, provided you pay taxes somewhere else (and can prove that obviously).
klaus
2021-05-07 05:41
@burrup.lambert That is interesting! I will dig further into that program. :slightly_smiling_face:
burrup.lambert
2021-05-07 11:27
:sunglasses:, I plan to perhaps do this if I move there in a few years.
felix
2021-05-07 15:48
I lived in Barcelona for 1+ year and got a NIE and nobody ever wrote to me in terms of taxes, etc. I am a European citizen. Have my own health care and didnmt work for a Spnish company. Nobody really cared about my tax residency for one second. I believe as long as you don?t work in Spain, get employed, etc. or somehow else show up in their system, they don?t care.
felix
2021-05-07 15:48
I believe I still have until today a residency there (never deregistered or anything like that).
omocha_10
2021-05-08 08:08
@klaus If you don?t have an Euro nationality, I think unless you you make a lot of money, you can get residency in a more tax friendly country like Bulgaria, Cyprus or the Baltics, then you can just spend time in Barcelona as a tourist, without working in Spain.
This would be a grey area,
I am not a pro accountant/lawyer.
russ7
2021-05-08 12:37
Does anyone know if Uruguay still has 5 years without taxes?
burrup.lambert
2021-05-08 16:04
I believe so.
omocha_10
2021-05-09 15:23
@russ7 Almost sure, they also dropped the price of the real state investment needed significantly.
Have a friend who moved over there, may be able to pass you a contact with a lawyer/accountant.
omocha_10
2021-05-09 15:23
If you want.
patjk
2021-05-18 14:09
Hey all, any American nomads/expats here running online businesses making over $250k profit a year? Looking to network to discuss structure/strategy/taxes. PM me, cheers!
lauren
2021-05-24 20:03
Most of my clients. Let me know if you need anything
a
2021-06-05 07:37
Hi all
Anyone has experience with the Portugal nhr program? Question on capital gain taxation, if brokerage account is in another country (say Cyprus)?
lauren
2021-06-05 08:09
Yes lol
jason
2021-06-07 20:52
So is there a typical zero-tax setup from a person who makes all of their income through trading activity? Just curious what that would look like.
michal.opoka
2021-06-07 21:24
Only sure way is relocating to country which doesn't tax that income, in some countries some setups also work
russ7
2021-06-07 21:39
Or moving around?
michal.opoka
2021-06-07 21:58
you need to have tax residency somewhere, you can't legally be resident of nowhere
mikeseo
2021-06-07 22:05
probably something like get visa residency in territorial taxation country panama malaysia thailand philippines paraguay etc and than don't report foriegn income and spend time as a tourist in 1st world countries
jason
2021-06-08 02:20
Right, I'm working on the Panama residency now (1st stage done), but I still am on the fence if I actually want to live there..
jason
2021-06-08 02:20
but what @mikeseo mentioned sounds ideal
michal.opoka
2021-06-08 02:27
that income should be reported in most cases though, so it's not very legal and with growing global surveillance can fail at some point in the future, safe way would be moving to country like UAE, but everything has pros and cons
mikeseo
2021-06-08 03:08
@jason I had the same idea, move to Panama, get residency, live there for most of the year so I would qualify to visit the US for 4 months a year. But I just didn't like living in Panama. We tried a few areas in Panama City and Coronado but I ended up in PH and didn't renew my PA residency. Ditto with PY. MX BR CO seem more livable long term. Never tried CL AR UY.
burrup.lambert
2021-06-08 03:26
Might aid in decisions, at least for South America.
omocha_10
2021-06-08 05:23
Argentina looks like once in a lifetime opportunity, you go there for 2 years, get a LATAM passport, live with very good standards in expat guettos at historic low prices....
vinodgn0088
2021-06-08 11:45
@jason, trading stocks or physical goods?
jason
2021-06-08 12:07
@vinodgn0088 stocks / maybe crypto
umesh.desai
2021-06-08 12:08
I thought to maintain residency in Panama you only had to be there 1 day in every two years. Have I got that wrong?
jason
2021-06-08 12:09
My wife and I could probably handle Panama fine if it weren't for our kids, couldn't find most of the activities we want them to do (at least at a quality level we'd accept for them)
jason
2021-06-08 12:09
But in a few more years we'll be empty nesters..
jason
2021-06-08 12:10
@umesh.desai no, you're right..
vinodgn0088
2021-06-08 12:30
@jason, Do a research on Cyprus if you are mainly into stocks ( not crypto or Forex). I heard that there is income tax exemption on profits from Stock trading activities. So the only main tax will be GESY 2.75% at the time of dividend distribution. With non-dom 60 days rule, you can spend decent number of days outside Cyprus as well.
burrup.lambert
2021-06-08 12:53
To be a tax resident you need to spend 6 months there per year, no?
umesh.desai
2021-06-08 13:29
Not sure if they make a disinction between tax residency and residency in Panama. Maybe someone here knows more about it
jason
2021-06-08 13:47
@vinodgn0088 thanks, to be clear, I'm also an Italian citizen, so I'm thinking of having a residency in Panama, but spending a large amount of time in the EU, my original question is pretty broad.. just wondering who else is doing this and how they are setup.
umesh.desai
2021-06-08 13:58
I take it back, you do have to spend 6 months of the year to have tax residency, and to obtain a tax certificate, but you can get a tax id which is what the W8-BEN requires
geoffrey.theodule
2021-06-08 17:09
Few lawyers said to me than in practice you can be out of Panama for more than 2 years and still have your PR valid. They would only need to reactivate the e-cedula which is a simple procedure apparently.
geoffrey.theodule
2021-06-08 17:15
3 years out would be fine, not sure about 5+ years though.
umesh.desai
2021-06-08 20:13
yes, but it's the tax residency that is important - for any countries that require it
umesh.desai
2021-06-08 20:14
I think I am good with just a tax id from panama, and an address in panama as that's all that the W8-BEN asks you to provide
geoffrey.theodule
2021-06-08 21:42
I was just answering your prior question. And yes you're absolutely right, tax residency matters the most.
geoffrey.theodule
2021-06-08 21:48
What you didn't like so much in Panama if I may ask vs PH (Philippines?), assuming you were living there before covid? I am considering the Panama Residency, I lived for a short while in Cebu, was kind of a shithole to be honest.
@mikeseo
mikeseo
2021-06-09 01:17
It was 4-5years ago, PA just seemed like fat old retirees from US/CA or locals/Venezuelans. There were some jews hiding there but they weren't really friendly. It wasn't particularly horrible but there was nothing too great about it either. Just kinda boring and blah. Nothing that made us want to stay. It seemed over hyped by offshore living gurus/realtors. It was cheaper and maybe better than CR though. Asia/BGC/TH/SG/etc has a more exciting feeling, PA was lazy/slow but not in the nice Mexican chilled way. And the food sucked too, breaded fried fish..only liked the plantains.
I didn't like Cebu either, apart from the lechon. Only places I like in PH are BGC and the island resorts...
vinodgn0088
2021-06-09 05:59
@jason, if you are thinking about spending majority of days in EU, then why are you going to Panama? Have you confirmed with your broker if they Panama residency or not?
geoffrey.theodule
2021-06-09 08:49
@vinodgn0088 My guess: getting a tax residency/certificate In Panama in case Italy is asking.
jason
2021-06-09 11:11
@geoffrey.theodule - yes, pretty much, that and a Panama residency was really not hard to get.
geoffrey.theodule
2021-06-11 23:28
@jason Have you looked into how to get a tax certificate/ be deemed tax resident in Panama while spending less than 183 days? I'm searching for that information.
geoffrey.theodule
2021-06-12 15:22
That the thing I was thinking, majority of expats being retirees (nothing against them but I'm in my 30s), and with the Friendly Nations Visa getting removed I even see a decrease of young expats in the next 5-10 years. And from the videos I see from Pamama I don't see much about culture, or gastronomy... Panama City seems overly constructed with high rise towers/expensive condominiums/hotels and the next streets being total slums. I have nothing against it, they do what they can (it has grown too quick too fast), but the experience seems expensive for the lifestyle you get. Sure they have nice beaches around and mountains.
You mentioned as well Paraguay. Considering Asuncion or Encarnacion, sure these cities are not in the same level as Buenos Aires, but for example Asuncion seems to breathe more than Panama City, more parks, less traffic, life seems quieter, and it's more affordable too. For short stays (2 months once in a while to keep permanent residency), it seems a decent option. You didn't like PY so much right?
@mikeseo
a
2021-06-12 15:29
does anyone lives (or lived) in UK as a non-dom resident on remittance basis of taxation?
need some help :slightly_smiling_face:
jason
2021-06-12 20:11
@himself no, haven't got that far.. not sure if I'll need one..
internationalbits
2021-06-13 01:12
yeah @a pm if you need
mikeseo
2021-06-13 06:02
I think Asuncion is more liveable than Panama City, if you like real mellow chill relaxed. You could make friends there and have a nice house in a pleasant neighborhood. Neighborhood schools and nature. More real people, unlike Panama City that was more retirees/scammers/lawyers/bankers. But coming from a big Asian city, PY was too sleepy for my wife.
mikeseo
2021-06-13 06:03
I think Asuncion would be the perfect place to hide as a international fugitive
anthony
2021-06-16 14:37
Who's the best person to speak to about my tax residency? I'm not paying tax anywhere at the moment as i'm a bit confused on my tax residency.
simon
2021-06-16 15:06
@anthony Feel free to post here or PM me if you prefer to talk in private
anthony
2021-06-17 03:49
OK, i'll post here.
My question is regarding my tax situation. So my situation is a bit weird. I?ll lay it down below:
? I?m from New Zealand
? I left New Zealand 5 years ago
? I work online and my income is from a US company
? I live in Thailand now
? My income is sent to my Transferwise every month. I would then send some living expense to my Thai bank account
I tried doing my research but seems I don?t fall into a tax resident in either countries: New Zealand, Thailand and US.
I had a consult with a thai tax person and they said no need to pay tax.
carolarnelas
2021-06-17 10:21
Hi All, I'm very new to this group and super happy to be here! I have a question here regarding my situation. I'm a yoga teacher and coach. I do everything online and location independent. I have students from all over the globe but mostly from Spain and Latin America. (I teach Spanish).
So here is my original plan: Planning to live between Spain and Portugal (I'm Spanish/British). Left Spain when I was 20 to the UK and never really worked in Spain so never paid tax in here. I was paying tax in the UK.
I'm in the middle of forming a WY LLC and pair it with NHR. Now I read very mixed opinions about this if it can work or not. As far as I know (and Simon mentioned this as well) US LLC incomes in Portugal are treated as foreign sourced income/dividends and it can be tax free. OX mentioned this as well.
I'm concerned that if I register and believe that I'm doing everything right maybe in a few years I get an audit with massive fines... I'm really not sure if this is the best strategy for me and I just want to make sure I'm doing it right.
My backup strategy was to become a resident of Paraguay and having my US LLC. Travel between European countries making sure I'm not exceeding the 183 days. Any help or opinion is highly appreciated in here! Thank you :)
marziovit
2021-06-17 11:52
WY LLC profit is not treated like dividends but like income hence you can?t play the NHR game with a LLC. You need a capital company like a UK LTD to make it work. The Paraguay route is better because you can use the LLC and be tax free in Paraguay.
carolarnelas
2021-06-17 13:49
Ok thank you! I guess the UK LTD will not be tax free in this case, right?
Anyone has experience with Paraguay? I have a fixer who charges around ?2500 for the residency.
Has anyone done it without any help like DIY?
I used to live in Mexico and a visa there without help took 10x longer or was impossible.
umesh.desai
2021-06-17 15:04
not sure of how the tax works, but, there's a new policy in mexico that allows you to apply for a 4 year temporary visa. costs about 13000 pesos. You go there on a visitor visa, let your visitor visa expire, and then go to immigration office and apply for the 4 year temporary visa
marziovit
2021-06-17 18:13
Correct, with a UK LTD you have to pay 19% corporate tax, do all your accounting and so on. I don?t have info on Paraguay unfortunately.
tiagomdreganha
2021-06-17 19:19
felix
2021-06-18 01:14
There is capital gains tax in Singapore, so I belive this should result in a zero-tax setup.
bierlingm
2021-06-18 10:47
Hi Carol, welcome! Do you teach the Spanish language? or you teach in Spanish? Asking because sometime this year I want to learn the Spanish language
simon
2021-06-18 17:24
You likely are a Thai tax resident, if you spend more than 183 days there annually. Any income generated in Thailand will be liable to tax (your income from the US company, if you work remotely from Thailand, will be Thai sourced and liable to tax). With that said, if you are comfortable with the risk (low in Thailand) you could fly under the radar and continue doing what you have
anthony
2021-06-19 03:51
@simon thanks for the response.
Ahh ok, got it. So that Thai tax person wasn't correct. She said if I don't generate income in Thailand, i don't have to pay tax. I'm just residing here.
If i want to be safe, would i have to file my income and pay tax here (Thailand)
joe
2021-06-19 07:40
@simon @marziovit coming back to the question from Carol.
When it comes to LLC, the UK mostly treat them as opaque entities, not transparent, so profits from LLCs are dividends.
so is it possible for her to setup the uk ltd as a holding company to receive the profits from the llc which would be regarded as dividends, and subsequently distributes those dividends from the uk company to portugal. of course this is assuming place of effective management is not in portugal.
marziovit
2021-06-19 08:01
@joe would this trigger CFC rules in Portugal since she would be the shareholder of the UK LTD that owns the US LLC?
marziovit
2021-06-19 08:03
That is supposing she is the only one operating the company.
joe
2021-06-19 08:13
well if she's the only who's operating the company, we don't need to look at CFC rules at all, its effectively managed and controlled in portugal :joy:
marziovit
2021-06-19 08:45
@joe of course :slightly_smiling_face: @carolarnelas another option for you would be something that came to mind while answering a question about Ukraine the other day. You register yourself as a private entrpreneur in Ukraine. This will make you tax resident in Ukraine without having to spend any time at all in the country. A private entrepreneur pays 5% of the revenue generated. You then simply invoice your LLC and pay 5% on that income. The US LLC will not be considered a CFC if your revenue is under 2 milion euros. You only have to be careful to not trigger tax residency in other countryes. This way you pay little taxes (imho is better to pay little taxes to have something to show in case somebody asks you where are you tax resident) and you can live wherever you want. The only cause this would not work is if you want to settle in a place for long time. For example if you want to live in Portugal long term this would not work and you would have to create a structure like the one Joe told you earlier.
marziovit
2021-06-19 08:48
@joe if using a UK LTD, having a UK director while you are the shareholder resident in Portugal under NHR could be sufficient to prove that the LTD is not managed from Portugal?
jase
2021-06-19 08:57
Can anyone tell me how Singapore treats US LLC income? Is it "income" or "dividends"?
carolarnelas
2021-06-19 09:24
Thanks for this @marziovit. I did read a little bit about Ukraine on Simon?s web. Can that be done remotely? And does it need to be local currency? I?m planning to live between Spain and Portugal with occasional visits to Gibraltar or Andorra so I keep under 183 days in all countries.
carolarnelas
2021-06-19 09:26
Hi Mark, I teach yoga and coaching in Spanish. Don?t have much experience teaching languages sorry :grimacing:
joe
2021-06-19 10:01
@marziovit i would believe so, but i think the more concerning issue is the LLC, not the LTD. if Portugal finds out about the LLC, you need to prove that you are not actively managing that company, otherwise i think you could fly under the radar for quite some time
joe
2021-06-19 10:03
@jase not so sure about Singapore, but foreign dividend are taxed anyways in Singapore.
jase
2021-06-19 10:09
Yeah. What may be more interesting is remittance.
jase
2021-06-19 10:09
From PwC: https://taxsummaries.pwc.com/singapore/corporate/taxes-on-corporate-income
> Companies (resident and non-resident) that carry on a business in Singapore are taxed on their Singapore-sourced income when it arises and on foreign-sourced income when it is remitted or deemed remitted to Singapore.
jase
2021-06-19 10:11
How I interpret that: an SG holding company can own a US LLC. If the LLC does not remit funds to the SG company, the funds stay in the LLC without tax. But I'm usually wrong. @simon will confirm that next time he logs in. :joy:
felix
2021-06-19 10:14
I would think it?s income since the LLC is a pass through entity.
marziovit
2021-06-19 10:25
@carolarnelas don't know if this could be done remotely. Most probably not. From what i understand you could invoice the LLC for lets say $30K, those wil be converted in Ukrainian currency on which you pay 5% taxes. The rest could stay in the LLC in the original currency.
joe
2021-06-19 10:28
if there's no cfc rules you are correct, but you will eventually need to remit it back anyways since the singaporean company is the "shareholder" of the LLC
marziovit
2021-06-19 10:37
So you end up paying something like $1500 taxes + social security (which is around $40 according to Simon) + mailing address in Ukraine (it's something like $70 a month with Regus). If you ask me this is pretty damn great. You pay minimal taxes, everything is legal since you are not managing the offshore company from Ukraine and it's not a CFC until it reaches $2M. BTW i do yoga myself, are you on Youtube? Just curious to see a class of yours :-)
simon
2021-06-19 10:59
Dividends / branch profits / subsidiary profits aren't usually liable to tax in Singapore, even when remitted. That is assuming the entity paying them is a tax resident of a treaty country, that it is taxed in that country and that the headline rate for that country is at least 15% (the entity doesn't have to pay the headline rate).
https://www.iras.gov.sg/irashome/Businesses/Companies/Working-out-Corporate-Income-Taxes/Companies-Receiving-Foreign-Income/Tax-Exemption-of-Foreign-Sourced-Income/
https://www.iras.gov.sg/irashome/Businesses/Companies/Working-out-Corporate-Income-Taxes/Companies-Receiving-Foreign-Income/
carolarnelas
2021-06-19 11:13
This sounds interesting. I?m just curios if this setup could work with a UK LLP instead of my LLC as my clients are mostly in Europe? Stripe UK charges 1.4% while Stripe US for foreign cards does 4.9% including conversions. That?s 3.5% difference
marziovit
2021-06-19 11:32
I can't see why you shouldn't be able to use a LLP instead of LLC. The extra step would be to register a dormant UK LTD as the second partner of the LLP. I bet @simon could help you with the registration of both UK LTD / LLP and the ongoing management.
jase
2021-06-19 11:43
UK treats them otherwise, so I figure it's worth checking.
jase
2021-06-19 11:44
@simon so would a US LLC that is wholly owned by a SG holding company but does not remit the cash to an SG bank account pay tax on the US LLC's profits?
jase
2021-06-19 11:45
1. I think it fails the first test _"The foreign income had been subject to tax in the foreign jurisdiction from which they were received (known as the "https://www.iras.gov.sg/irashome/Businesses/Companies/Working-out-Corporate-Income-Taxes/Companies-Receiving-Foreign-Income/Tax-Exemption-of-Foreign-Sourced-Income/#Subject_to_Tax_Condition" condition). The rate at which the foreign income was taxed can be different from the headline tax rate;"_
carolarnelas
2021-06-19 11:49
Ok thank you Marzio! Would be interesting to find this out! Do you still need a dormant UK LTD if my husband could be the second partner of the LLP?
By the way my youtube:
http://www.youtube.com/c/carolarnelasyoga
marziovit
2021-06-19 11:53
@carolarnelas if you are travelling with your hubby then there's no need for a dormant LTD as he could be the second partner. This could work very well for you. I only ask you to update the discussion if you decide do go further witht this option! I'll check you out on youtube :-)
simon
2021-06-19 11:57
Unremitted foreign sourced profits are never liable to tax in SG. If you want to remit them tax-free with an LLC, you?ll have to prove that the LLC paid tax in a treaty country (for example, an LLC run from the UK and liable to UK corporation tax),
carolarnelas
2021-06-19 12:13
Thank you will defo update here!
joe
2021-06-19 12:53
@simon how about the UK treatment of US LLC, do you have any insights into that? what I read is HMRC usually regard them as opaque, except for the anson case where the supreme court actually allowed the UK member of the LLC to claim for foreign tax credit under the DTA, essentially treating the US LLC as transparent.
If HMRC is really treating LLC as opaque entities, one could setup a holding company to own the US LLC and those "dividends" coming from the LLC will be tax exempt since UK has a tax exemption for foreign income dividends
joe
2021-06-19 12:53
have u seen this work out in real life? and does it hold in theory?
simon
2021-06-19 13:35
HMRC treats them as opaque but allows an election to be made to change the treatment to disregarded (as required by the court judgment you mentioned).
The problem with the branch tax exemption is that it requires proving that the payer is a tax resident in a treaty country. Similar to Singapore.
joe
2021-06-19 14:32
is the branch tax exemption same as the foreign dividend tax exemption? i thought branches are usually referred to PEs that do not have a residency and effectively just an extension of the UK company. if HMRC is treating them as opaque entities, wouldn't it be more similar to a subsidiary instead?
simon
2021-06-19 15:18
The branch tax exemption allows you to exempt foreign sourced profits, as long as they are sourced in treaty countries (and taxed there). Branch in this context refers to subsidiaries and also PEs. It effectively turns the UK into a territorial taxation country.
joe
2021-06-19 15:23
oh ok i just read up on the branch tax exemption, so its another thing. i'm actually referring to this one https://www.mondaq.com/advicecentre/content/3042/UK-Foreign-Profits-Exemption-for-Dividends
simon
2021-06-19 21:57
You are generating income in Thailand though, as you work there (doesn?t matter where your clients are / employer is).
If you want to be fully compliant, you?ll have to report your income and pay tax. You should be careful about your immigration status, however, as reporting income while on a visa which does not allow work could be an issue (for example, the Elite visa)
marziovit
2021-06-20 06:34
So to make it work you have to select the LLC to be treated as a C-corp and pay taxes in US
simon
2021-06-20 08:34
Either that or you have to have ECI. It would also work if the LLC pays tax in another treaty country (it doesn't have to be the country of registration)
bierlingm
2021-06-21 10:13
Cool! Haha no worries, good luck with your business! :slightly_smiling_face:
bobriakov.igor
2021-06-27 15:22
I'm not sure this setup would work with WY LLC.
Since WY LLC, I suppose, is disregarded entity, it means that it should be taxed at personal level at your tax residence (Ukraine in this case).
On the other hand, Ukraine recently passed CFC laws, meaning there is mandatory reporting on foreign controlled companies for residents from 2022.
It looks quite confusing atm as to what would be proper way of handling such situation.
marziovit
2021-06-27 15:27
@bobriakov.igor yes, you have to report it but under 2 million euro is not a CFC according to Ukraine law.
michal.opoka
2021-06-27 20:09
@marziovit I don't think this will work, even if it's enough to be registered as private entrepreneur in Ukraine for Ukraine to consider you tax resident then other countries can still claim you as tax resident which can lead to residency conflict that would be resolved under double taxation treaties and if you don't actually live in Ukraine then other country where you live or have citizenship will be favored.
marziovit
2021-06-28 04:56
@michal.opoka even if you don?t stay long enough in any country to trigger tax residency there?
michal.opoka
2021-06-28 10:53
@marziovit It depends on a country, for example Poland has 'center of life interests' rule which means that if someone leaves the country, but still have wife, kids and house in Poland then Poland will still claim him as a tax resident. So to be more precise this method might work with some countries, but won't work with others.
rtiagm
2021-06-29 10:27
Maybe someone has an idea. Person X is going to receive money and promised me a percentage of the amount. What's the best structure to avoid double taxation on that? Person X is American and I'm not a citizen or a resident.
rtiagm
2021-06-29 10:29
Ideally, person X wouldn't pay taxes on the percentage he will give me.
mb
2021-06-29 11:14
Setup a partnership (LLP) and take out your percentage as a partner distribution?
bobriakov.igor
2021-06-29 12:50
@omocha_10 as far as I understood, it is CFC regardless of the amount. The under 2 million euro is a threshold for paying tax, one should still send reports for CFC regardless of actual amounts.
marziovit
2021-06-29 14:54
@bobriakov.igor you should read the pwc link i posted earlier
jason
2021-06-29 18:27
@rtiagm easiest way would be to declare it as a gift to you, and use it against their 11M lifetime gift exclusion
timorshait
2021-06-29 21:22
https://thethaiger.com/news/regional/indonesia-en/bali-plans-5-year-visa-scheme-for-digital-nomads-as-island-stalls-reopening
Just read through this, and hoped to get your thoughts on this. In the news article it says:
"Under a proposed scheme, the foreigners will be granted 5-year visas with no taxes on foreign-sourced income, according to Indonesia?s Minister for Tourism and the Cultural Economy, Sandiaga Uno."
I'm having hard time to understand what they mean here. They want to attract digital nomads with internet based companies to work from Bali and offer no tax on foreign-sourced income. But If someones works from Bali under this scheme, their work become sourced from where they are located, locally in Bali, which defeats the purpose of this whole thing no?
asarun72
2021-06-29 21:54
?
If they earn income within Indonesia they will be taxed but if it?s solely from overseas there will be zero tax.?
simon
2021-06-29 23:52
The wording is confusing but I assume they mean that digital nomads will not be taxed if their income is paid by an overseas employer / company (even if they work from Indonesia). That would be in line with most other digital nomad visas.
rtiagm
2021-06-30 06:36
that's what we are thinking of doing.
candelamont
2021-06-30 09:25
Hey everyone. Not sure it this topic is relevant to this chat (my apologies if it isn't). Just found out about the new VAT normative that applies to e-commerce businesses importing goods to EU. I own a brand and produce in South East Asia, as of right now Im not building in import tax on my price strategy since until now customers were responsible for these taxes. Basically the normative forces you to register on this platform called OSS and declare each of your shippings with a linked Tax ID of each customer, otherwise absorb all these taxes at shipping. Anyone facing this issue right now? Would it make more sense to include these taxes on the final price or include an extra step at checkout asking for tax ID? Any advice welcome :hugging_face::hugging_face: https://ec.europa.eu/taxation_customs/business/vat/ioss_en
timorshait
2021-06-30 09:41
Thanks man, I thought that would be the case too but was confused by how they presented it. It?s super early days anyways regarding this, but perhaps in the coming year it?ll go ahead. In other countries that offer similar conditions for nomads, would this mean that I?ll have to have a corporation to enjoy the benefits, or any legal entity could work, such as a UK LLP potentially as well? What do you reckon?
felix
2021-06-30 15:36
Hi guys! Out of curiosity, what do you think ist the lowest tax rate (corporate as well as personal) you can reach legally while living in the US with an active business that requires you to work on it on a regular basis. There must be ways to exclude certain things, put dividends in a trust, etc. I can?t believe that a country like the US has no loopholes to lower the standard tax rates significantly.
kuka
2021-06-30 16:00
Well, not an expert here but I know about Roth IRA, writing off expenses, getting paid minimal salary and doing assets-based loans? Saw a head line about Thiel?s Roth IRA ?loophole? here https://www.businessinsider.com/personal-finance/peter-thiel-roth-ira-strategy-everyday-people-2021-6.
simon
2021-06-30 16:24
Which state?
simon
2021-06-30 18:46
It varies from country to country but in many cases you can use any legal entity, as long as it?s setup abroad and that it performs no work for local clients.
felix
2021-07-01 01:04
Washington state, Oregon, NY, Cali
felix
2021-07-01 01:04
Thank you a lot Kuka. I will check it out.
felix
2021-07-01 01:08
I assume foreign entities will be treaded as local corporations due to CFC rules. So there must be a way to lower their taxes as well.
Was thinking about donations to a forwign foundation, but this is probably too easy :sweat_smile:
ben659
2021-07-01 14:48
Hey, does anyone here have experience with Italy and the particulars of their 70-90% tax discount for new residents?
arommelaere
2021-07-01 16:07
Hi, as tax resident in territorial taxation country (Thailand), anyone know if remitted profits the next year from trading US & EU Stocks (CFDs) on foreign broker having their bank account outside of the residency country is taxable ?
Is it considered as Thai Sourced Income (ex: trading from inside Thailand territory) ?
michal.opoka
2021-07-02 16:03
Website looks good, but lacks details and doesn't mention all the drawbacks
arthur.vandelaak
2021-07-03 18:14
Looks like a very good setup for Digital Nomads. Especially if you stay 3-4 months max in a country.
arthur.vandelaak
2021-07-03 22:20
I have looked into it and decided against it. It only applies to Italian income. So I have to incorporate in Italy. Overseas income does not get these discounts. You still pay 22% social security, local taxes, business taxes. Plus it is a bureaucratic nightmare of a country.
ben659
2021-07-04 04:07
Interesting thanks for the info
ben659
2021-07-04 04:07
Where did you get this intel - from a local accountant or lawyer?
arthur.vandelaak
2021-07-04 07:00
@marziovit The 5% Tax, the maximum that you can bill is 7mil UAH. About 200k euro per year. What happens let's say to your LLC income if that is 1mil euro. Will you be taxed 18% income tax in Ukraine on the 800k euro. Or as it is CFC exempt (under 2 million) that 800k is not taxable. Do the PE rules apply or not, even if you do not stay in Ukraine?
marziovit
2021-07-04 07:20
If you don't stay in Ukraine there's will be no PE in Ukraine so you have to only worry about your offshore company not becoming a CFC. You will have to report your offshore company income but it will not be taxed under the following conditions: https://taxsummaries.pwc.com/ukraine/corporate/group-taxation
marziovit
2021-07-04 07:20
? The total aggregated income from all CFCs owned by one controlling person does not exceed the equivalent of EUR 2 million at the end of the reporting period.
arthur.vandelaak
2021-07-04 20:45
@marziovit are you using this setup yourself? I will do some more digging and get an answer from a Ukrainian tax consultant. This sound like a very good option for digital nomads. You just bill some income to keep Ukraine happy. You just have to make sure you are not triggering tax residency in another country.
arthur.vandelaak
2021-07-04 20:59
UK LLP or US LLC income is income that is contributed directly to the owner. Will this not be seen as personal income and therefore taxed in Ukraine based upon World wide income principle.
marziovit
2021-07-05 03:40
@arthur.vandelaak i'm not using this setup myself but it's a very good idea di get an answer from a Ukrainian tax consultant. Please update the thread when you have news.
a10
2021-07-10 10:28
Is there anyone knowlegable about Turkey?
I'm about to apply for turkish kimlik/ikamet which allows to stay here for over 1 year. However, I won't exceed 183 days per year because I intend to leave before it expires, and even before 6 months will have passed. I need it mainly for being able to open a couple of bank accounts and apply for schengen visa from Turkey. And just for experience.
To apply for kimlik/ikamet, one rents an appartments, for 1 year, and verifies it with a notary. And then applies for kimlik/ikament with it.
This rental agreement, by the way, can be canceled any moment if I choose to do so.
In Turkey one becomes a tax resident when one:
* stays over 183 days in the country (calendar year); or
* has a domicile in the country
*Question*: can *rental agreement verified by notary* be considered as "a domicile in the country"? Would this then inflict tax residency on me?
Or even the fact that I possess a kimlik/ikament?
---
Also, I already have a bank account and a tax ID, both in Turkey. I guess that these alone don't trigger tax residency.
---
If case I somehow trigger tax residency for this year, how would I pay taxes? Will they simply sum up all the money I've had in my turkish banks and deem it income? Or how? Is there any threshold which determines that money "income - not yet income"?
marziovit
2021-07-12 14:43
Any Malta experts here? I've read that as a maltese non-dom you can manage foreign companies from Malta and you only pay 5K taxes total (if you don't remit anything to Malta). Yes the offshore company would trigger PE in Malta but apparently companies which are resident but not domiciled in Malta are subject to tax on income arising outside Malta which is remitted back to Malta. The offshore company will be also a CFC but it is exempted from taxation if profits are < 750K and passive income is < 75K. The question is if this would work with a UK LLP also.
taylorwalkerllc
2021-07-13 03:48
Yes thats correct. But the refund takes 2-4 months which is a bit annoying for cashflow etc.
marziovit
2021-07-13 05:22
@taylorwalkerllc which refund are you talking about?
taylorwalkerllc
2021-07-13 09:00
6/7 refund of corporate tax on dividends: "Upon receipt of a *dividend* from their *Malta Company*, shareholders will become entitled to a *refund* of *6/7* of the total *tax* paid (i.e. including the overseas *tax*). The total *tax refund* will however be limited to the *Malta tax*, so that the total effective *tax* rate paid in *Malta* will be a maximum of 5%."
https://www.emd.com.mt/brochures/en/malta_companies_taxation_vb1.html#:~:text=of%20January%202007.-,Tax%20Refunds,be%20a%20maximum%20of%205%25.
marziovit
2021-07-13 09:39
@taylorwalkerllc please re-read my post, i'm not talking about a maltese company but managing a tax transparent entity from Malta
vinodgn0088
2021-07-13 10:20
@marziovit, If you manage UK LLP and do the jobs while physically present in Malta; then the income is classified as income arising in Malta. Tax is applicable on incoming arising in Malta even if its not remitted to Malta.
marziovit
2021-07-13 10:29
@vinodgn0088 thanks dude! So this only works with capital companies.
vinodgn0088
2021-07-13 10:38
@marziovit, Yes mostly.
taylorwalkerllc
2021-07-13 13:00
Since your company is managed from Malta by yourself its not a foreign company.
marziovit
2021-07-13 13:17
@taylorwalkerllc read about the difference between resident companies vs resident and domiciled companies in Malta. An offshore company that is managed from Malta is resident but not domiciled (domiciled companies are companies which are incorporated in Malta) and resident companies are only subject to tax on income arising outside Malta which is remitted back to Malta. https://corriericilia.com/publications/resident-non-domiciled-companies
taylorwalkerllc
2021-07-14 07:40
You should consult some local tax consultant. Not sure you are right :wink: Have fun bro
bierlingm
2021-07-14 07:48
You don?t have to physically be in Malta for the non-dom right? So as long as you stay out*? Correct me if i?m wrong
marziovit
2021-07-14 08:02
@bierlingm yes you "should" be there for 183 days
bierlingm
2021-07-14 15:18
Are you sure? I think there is no minimum stay under the Global residence program
marziovit
2021-07-14 15:31
@bierlingm i'm not talking about the global residence scheme but having non-dom status
vaibhav.r.kamble
2021-07-21 07:27
I know that foreigner can regiater offshore business in Singapore remotely and apply for employment pass. However can this non resident business owner get individual tax identification number to open brokerage account with brokers that accept international applicants?
vaibhav.r.kamble
2021-07-21 07:29
I am particularly interested in getting account with Fastrade that offers 0% commission and supports application from Singapore.
vinodgn0088
2021-07-21 14:08
@vaibhav.r.kamble, Are you asking about personal tax identification number for the owner or tax identification number for the company?
vaibhav.r.kamble
2021-07-21 14:53
@vinodgn0088 I am asking about personal TIN for the owner.
felix
2021-07-22 01:16
I believe if you become a SG tax resident, your company is not ?offshore? anymore in Singapore. Also, have never heard about an offshore entity in SG.
vinodgn0088
2021-07-22 04:08
@felix, May be he is talking about a Singapore Incorporated non-resident company. Which means the company won't pay tax in Singapore if the company is managed from outside of Singapore and does not remit funds to Singapore.
vinodgn0088
2021-07-22 04:10
@vaibhav.r.kamble, If you get employment pass you will also have a personal tax id. But if you have employment pass, your Singapore company will become tax resident in Singapore as well.
vaibhav.r.kamble
2021-07-22 04:19
Thanks @vinodgn0088 and @felix. my first intention is to be able to run this company from outside of Singapore and get personal tax id. Thank you for pointing out that as I and my incorporation become tax residents, I will owe taxes to SG governmnt. Now as long as these taxes are considerably less than what I owe in my home country, I wouldnt mind paying those taxes to start with. I reckon one can setup far better structures to even achieve zero tax, I narrowed down my search to SG based on my limited knowledge and constraint that Firstrade broker doesn't support well known tax heavens like UAE, Belize, etc.
simon
2021-07-22 04:37
@vaibhav.r.kamble Keep in mind that if you run a SG company (or any company really) from another country full time, it?ll likely be taxed in that country as if registered there (negating all tax benefits).
vaibhav.r.kamble
2021-07-22 04:40
Thanks @simon, that means setting up SG incorp doesn't serve my purpose, I guess I need to revisit my plans then.
michal.opoka
2021-07-22 11:26
@vaibhav.r.kamble Maybe FirstTrade would support Wyoming LLC owned by UAE company?
vaibhav.r.kamble
2021-07-22 11:30
Yes they would but that comes with limitation in options trading level, which is restricted to only covered calls and only buy transaction of calls and puts. One can hardly achieve expected profits with this restriction.
michal.opoka
2021-07-22 11:30
Also if you would actually live in UAE then you don't need any company
michal.opoka
2021-07-22 11:31
that limitation would be because LLC is US company?
vaibhav.r.kamble
2021-07-22 11:32
Yes but in that case I cant go with Firstrade, only option I would have then is IBKR.
michal.opoka
2021-07-22 11:32
why not? I have personal account with FirstTrade
vaibhav.r.kamble
2021-07-22 11:32
And you are living in UAE, interesting.
michal.opoka
2021-07-22 11:33
not in UAE, I live in Poland
michal.opoka
2021-07-22 11:33
but they require your passport
michal.opoka
2021-07-22 11:33
as far as I remember
vaibhav.r.kamble
2021-07-22 11:35
Yes and they also capture tax identification so that would be of my home country and living in UAE doesnt give me any advantage or does it?
michal.opoka
2021-07-22 11:36
In general if you live in UAE you are tax resident of UAE, not your country, it's best to check double taxation treaty
vaibhav.r.kamble
2021-07-22 11:37
Yes but sadly Firstrade doesnt support UAE region.
michal.opoka
2021-07-22 11:39
even if you give them tax number from your home country it doesn't mean you gonna have to pay tax there, but it will probably be reported to your home country under FATCA
vaibhav.r.kamble
2021-07-22 11:40
Alright so under double taxation treaty living in UAE will help me in saving tax correct?
michal.opoka
2021-07-22 11:40
check the treaty between your country and UAE, it's best if you get personal tax residency certificate from UAE
vaibhav.r.kamble
2021-07-22 11:41
Yes, excellent point. Thanks a lot @michal.opoka
michal.opoka
2021-07-22 11:44
if there is no treaty between your home country and UAE then you got to check tax laws of your home country on what makes someone tax resident
vaibhav.r.kamble
2021-07-22 11:45
Sure, I will explore this avenue!
michal.opoka
2021-07-22 11:47
it can range from just spending most of the year in UAE to removing all traces of your life in your home country.
a
2021-07-25 09:53
hello everyone,
are there any cyprus non doms here? :slightly_smiling_face:
can anyone explain how 90 days rule work in relation to taxation of foreign income in the hands of cyprus non-doms?
bountybairn
2021-07-27 15:39
Yes....
bountybairn
2021-07-27 15:40
I will dig out the details and send to you, pm your email and i'll share the stuff from lawyers i work with here, then you can share questions etc
samkvcs1994
2021-08-06 13:50
Did you ever get any further info on this?
marziovit
2021-08-06 16:52
I wrote to http://servizz.gov.mt asking this very question and i?m waiting for the answer
russ7
2021-08-08 13:42
Can a Canadian live in Portugal under NHR and pay zero tax on income earned through American clients?
ray5turtle
2021-08-24 07:18
Hi guys, can anybody recommend the easiest way to obtain US ITIN for non resident alien?
simon
2021-08-24 16:50
@ray5turtle If you reside in a treaty country, the self publishing hack is by far the easiest way. You sign up for a publisher account with Draft2Digital, Amazon etc and ask them for a ITIN letter, you then mail the letter to the IRS along with form W7 and a certified copy of your passport (make sure the copy is certified by the issuing authority listed on your passport?s information page). Except for postage and perhaps the certified copy, applying this way is free and usually you?ll get your number within 3-6 months.
simon
2021-08-24 16:51
Ah and when you ask for the ITIN letter, make sure to specify it is for the purpose of claiming treaty benefits (lower withholding rate for royalties)
burrup.lambert
2021-08-24 18:01
Is this one on the website @simon? Do you actually have to reside in a treaty country or can you just use an address in one if you have one? Does the treaty country have to match the passports country? How is the ITIN received? They mail it back via post to your address (in treaty country)?
simon
2021-08-24 19:19
It?s not on the website, at least not yet. I may add it in the members area (don?t want this hack to become widely known).
Technically you should reside in a treaty country but there?s no way for the IRS to automatically verify if you actually do (and they won?t bother with a manual verification until you actually claim benefits). The ITIN will be mailed to the address you enter on form W7.
ashishbhatia.ab
2021-08-25 05:47
https://www.forbes.com/sites/leonlabrecque/2021/07/15/the-new-death-tax-in-the-biden-tax-proposal-major-tax-change/ - what are recommended tax plans for US residents? Anyone here who has looked into perpetual trusts or something similar?
ivo
2021-08-25 10:30
@ray5turtle If you have a US Bank account any interest received should be sufficient basis to claim an ITIN. Usually your bank can issue a letter that you have received interest on the account. If you cannot get a hold of a certified copy from the issuing authority, any so-called acceptance agents can help you. Here?s a global list of them: https://www.irs.gov/individuals/international-taxpayers/acceptance-agent-program
And lastly, in theory any CPA in the US can help you for a fee (generally around 500 USD). Just mail a couple and usually they?ll jump on a Skype call with you an certify your docs.
felix
2021-08-26 08:25
Any tips on what?s the best corporate structure for Canadian (personal) tax residents? A friend of mine (Singaporean) will relocate to Canada and has a (online) coaching business. We are currently checking to what extend the WY LLC / UK LLP can be beneficial to him, but I have no clue about the Canadian tax system and loop holes to live as tax efficient as possible in Canada. Any pointers would be highly appreciated.
romanpfeiffer75
2021-08-26 10:37
Hello everyone, I currently live in Mexico where it seems like they don't tax crypto income. Anyone living in a country with a similar legislation? Would like to exchange experiences...
russ7
2021-08-26 11:32
Canada taxes on a residential basis. So, if your friend becomes a resident, he will have to pay tax.
Since the US has a treaty with Canada, this won?t help much.
So, imo, the best structure is a corporation in Canada that pays dividends to him personally.
I believe the business will pay about 15.5% tax on income after deductions.
And then will pay tax on a sliding scale on the dividends.
Whether his set up in Canada will be high tax or low tax really depends on how much he makes.
felix
2021-08-26 11:48
Thank you! You would suggest dividends over regular salary (income tax)?
I believe the ON LP and BC LLP are losing their desired effect of being tax free when he becomes a tax resident in Canada?
russ7
2021-08-26 11:52
I think dividends are much simpler and save a small amount of money.
The caveat is that you?re not paying into the Canada Pension Plan - which saves you money, but no pension down the road.
And, yes, imo, the ON LP and BC LLP aren?t useful if you?re actually living in Canada.
There?s no real way to escape taxes when actually living in Canada.
But I think your friend will find that taxes are actually lower than somewhere like the US.
felix
2021-08-26 14:44
He is right now living in SG where he is blessed with tax free dividends :wink: , but I completely get your point. I told him the same. There will probably no way to get around taxes in Canada. Probably only some strategies to reduce the effective rate.
mescos
2021-08-27 16:20
@felix and @russ7, the only option I?ve seen for Canadians looking to move back to Canada is to setup passive investments in a non-resident offshore trust. But, as far as I know, the assets have to be injected into the trust at least 5 years before moving back to Canada. So, not really an option for someone who wants to move back quickly. But, it?s the only real solution I?ve seen so far available to Canadians.
chrgruber
2021-08-29 02:39
I am a resident of Thailand. Thailand has this weird provision in its tax code that allows you not to pay tax on foreign sourced income if you don't bring it into the country in the same year it was earned. [0]
I have a US registered LLC that is considered "pass through".
My question is can I take advantage of that provision in the Thai tax code if I keep any profits, dividends, salary in a bank account outside of Thailand for a year?
[0] https://home.kpmg/xx/en/home/insights/2011/12/thailand-income-tax.html
simon
2021-08-29 02:53
@chrgruber is the income foreign sourced? (no work performed in Thailand, only overseas)
chrgruber
2021-08-29 02:55
I'm consulting remotely but from Thailand. So I'm guessing that excludes from the provision? :confused:
simon
2021-08-29 03:00
If you work from Thailand, the income will be Thai sourced and not eligible for the exemption. You could keep quiet about it, it?s Thailand after all, but that?s up to your risk tolerance.
chrgruber
2021-08-29 03:03
Thanks Simon. Is there be maybe any other setup that could be more beneficial to me tax wise?
chrgruber
2021-08-29 03:07
Was thinking about setting up a Estonian e residency company instead which would (AFAIK) allow me to defer paying taxes on retained profits.
simon
2021-08-29 03:26
If you work from Thailand, your income will be liable to tax no matter where your company is registered. Thailand just isn?t a good option tax-wise
chrgruber
2021-08-29 04:00
Yeah thought so. Thanks
antunesjordan
2021-09-01 15:52
Hi there !
I?m a french resident and my company is currently in france.
I?m not living there anymore for years but keep paying my company and personal taxes there.
I?m travelling all year long but decided to spend some time in Brasil with a student visa.
I?m looking for some tips to improve my taxes.
I?m considering opening a LLP in the UK as none of my revenu is UK based. Is this a good idea ?
What about my personal income taxe related to France ?
seb.malek
2021-09-01 15:55
> I?m travelling all year long
Get tax residency somewhere else first, Cyprus non-dom or Paraguay or UAE, idk
seb.malek
2021-09-01 15:55
there is no reason to be tax resident in France if you are travelling all the time
seb.malek
2021-09-01 15:56
> I?m considering opening a LLP in the UK as none of my revenu is UK based. Is this a good idea ?
Yes but a Canadian LLP is even better as it's more private (but a bit harder to get bank accounts I suppose)
antunesjordan
2021-09-01 16:02
No idea how that work and how to do it
antunesjordan
2021-09-01 16:02
All my business is in france so thats enough to tax me
marziovit
2021-09-01 16:23
Correct but he will probably pay higher stripe fees if he charges in EUR using a Canadian LLP.
seb.malek
2021-09-01 17:47
true, I didn't think about that
felix
2021-09-02 01:39
Sebastian, do you mean the BC LLP or ON LP?
psnazle
2021-09-03 09:54
Hi there, I thought I just share this one as we're planning to move to Georgia next year. https://expathub.ge/cryptocurrency-in-georgia/
psnazle
2021-09-03 09:56
I'm subscribed to their newsletter that I find quite valuable. They also run a FB group for expats in Georgia.
prykhodko.av
2021-09-03 12:25
Hi Klaus, how is it going? It would be good to know if everything worked well for you
jason
2021-09-03 14:55
@psnazle thanks, that's a fantastic article! I plan on renouncing my US citizenship within the next year or two and this might be an option for us.
taylorwalkerllc
2021-09-05 07:49
Hey because Malta is FATFA Greylist I got the following questions from my service provider for the holding in Cyprus:
Kindly provide/identify the following:
(i) Country of Tax Residence:
We note that up until June 2020, you were employed with (... LTD) and was paying taxes in Malta.
Are you employed with any other Company in Malta or paying taxes in Malta as from June 2020 onwards?
Please advise accordingly on this.
(ii) Tax ID Number from June 2020 - 2021;
(iii) Please provide a Short Description of your current Occupation;
(iv) Please identify your total net worth in Euros (this should be the value of all valuable assets held (including real estate and investments, etc) and any streams of income (such as rental income, employment income, dividend income).
(v) Please provide a Breakdown of the total net worth per asset and per stream of income.
Could you kindly clarify re Dividends listed in your Economic Profile (attached). I believe to date no dividends have been issued to yourself as dividends from (... LTD) in any case would be issued directly to the Holding Company in Cyprus, (...) Ltd ? Please clarify.
Please also clarify re the Dividend Warrant provided in the Compliance Folder ? which to date has not been executed.
(vi) Please also identify the country/jurisdiction with every stream of income.
(vii) Please identify any Companies in which you have held a position as Director or Shareholder in the past ten years.
Question: I was in China in 2020 on Student Visa not legally allowed to work and I don't have any Tax ID there or filed any tax returns. Also now I am in Thailand on a Tourist Visa and I don't have any tax ID etc.
What should I answer them? How to solve this issue?
bountybairn
2021-09-05 09:03
this is largely just to provide your service provider enough to do their AML and DD on you, i wouldn't worry as I work with providers and other agents here and to my mind people are putting all sorts on these forms, and if it stacks up superficially the lawyers should just chuck it through.
When I came from the UK I put very little about this stuff in any detail and it was fine to be used for formation, company bank, personal bank and residency,
Do you have income already that will be diverted to the CY holding? What kind of assets will it hold and where are they have been the things that have required a little more detail on the cases ive seen
taylorwalkerllc
2021-09-05 09:09
Income will be the first dividends from 2020 from Malta. That's the only income of the Cypriot company for now.
koshis
2021-09-15 08:03
Hey guys
What countries do not have CFC rules?
Vietnam, Panama, UAE are a few of interest. Any other good options ?
marziovit
2021-09-15 08:15
Switzerland doesn't have CFC rules
marziovit
2021-09-15 08:17
Hong Kong, Singapore too
marziovit
2021-09-15 08:25
obviously there are others but those are first that came to mind
koshis
2021-09-15 10:32
Cheers Marzio
bountybairn
2021-09-15 11:00
Cyprus?
marziovit
2021-09-15 11:51
AFAIK Cyprus does have CFC at personal level but not at the company level
c-bass
2021-09-17 14:54
Hello all, I was wondering if anyone could offer some advice regarding my tax situation.
I'm Canadian and have owned a Canadian Corporation for many years. I live in Bulgaria and am a long-term resident in Bulgaria thanks to getting married to my Italian wife. I haven't really made much money these past years so I just kept paying personal tax in Canada and filing my annual corporate tax return as well.
This year though things have changed and I am now starting to make decent money, nothing crazy, I'm looking at ~70k USD / year. I also want to start paying personal tax in Bulgaria.
The big question is, do I keep billing my freelance clients through my Canadian business, and pay myself dividends, or do I set up a company (EOOD) here in Bulgaria. Or possibly do I set up a pass-through company in the UK, or maybe one in Estonia. Apparently, I am not allowed to be a self-employed freelancer in Bulgaria so that option is closed off to me.
I've spoken to a few people and it seems that if I went the EOOD route in Bulgaria, I would end up paying ~10% in corporation tax and ~9% in Social Security. Added to that I'd pay ~2000 EUR / year in monthly accounting fees + end-of-year filing fee.
From what I hear though, setting up an EOOD, eventually winding it down, and having to deal with the accounting etc.. is quite a headache.. for example they're very strict about receipts and business expenses.
One alternative is to just keep the Canadian company and pay myself dividends. Doing that I apparently would have to pay no social security and no taxes in Bulgaria, but I'd probably pay higher corporate tax on Canada. The accounting fees on the corporate side would be much much lower, for the past 8 years I've only been paying ~400$ / year for accounting (simple stuff), and not having to deal with an accountant on a monthly basis is another bonus (only have to deal with it once a year).
It's unclear to me what % of corporate tax I would pay in Canada, as a non-resident sole director. I can't seem to get a straight answer on that which is what I'm hoping to get clarification on here.. if anyone has any insights.
A friend mentioned that because of CFC rules, what I should do is register my Canadian company in Bulgaria.. when I mentioned that to another friend here in Bulgaria they looked at my funny.. as if this is just not something that is possible, or if it were, it would be a major headache and probably quite the more expensive route anyway.
I'm looking for a convenient solution that is as optimized as possible. I really hate dealing with accounting in general and so I hope someone can give me some suggestions about what's the easiest way to go about this. I'd love to just keep the Canadian company and only pay personal tax in Bulgaria.. if that somehow ended up being the optimal way.
If you've read this far.. many thanks!
russ7
2021-09-17 15:02
I?m Canadian too. I?m not 100% sure, but I think you?d end up paying roughly 15% tax on the revenue at the corporation level. And I *think* you?d end up having it so the corporation withholds another 15%+ on the dividend income.
Another way to consider setting it up is through an Ontario LP or BC LLP.
Both act as pass-through entities. And, as long as none of your clients are Canadian ? and none of the work is done in Canada ? then your only tax obligation is at the Bulgarian level.
@simon can help you set up
simon
2021-09-17 22:45
@c-bass Registering an ON LP / BC LLP will likely be your best option. It's very cost effective, there is no tax to pay in Canada as long as no work is performed there (there's no need to even file with the CRA), you'll get to continue banking with the same banks, will be able to apply for business credit, payment processing etc using your credit history and will not have to worry about relocating your company should you decide to leave Bulgaria.
Most people I know that have tax transparent entities in BG file as if they were corporations (and thus pay only the 5% withholding tax, their profits distributions being deemed foreign sourced dividends). It's obviously a grey area type situation but as you have already found out, doing everything by the books would be nearly impossible (CFC rules do not apply as the company is active, place of management rules do apply and that means a PE would have to be registered in Bulgaria with Bulgarian sourced income reported and taxed through it).
Ah and just as a side note, if your Canadian corporation is registered with the feds, you will need to appoint a local director if you officially become a non-resident (a requirement for all federal corporations and in most provinces as well).